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How America Can Help Africa


May 24, 2002 - Wall Street Journal

Media coverage of the protests against globalization has diverted attention from what may well be a more striking and historic development: the growing consensus between African countries and their Western partners on the importance of trade in overcoming global poverty.

From President Bush to the rock star Bono (now touring Africa with Treasury Secretary Paul O'Neill) to the leaders of the 54 African countries represented in the Organization of African Unity, there is now a broad agreement that no national or international strategy for addressing poverty can be successful unless it promotes expanded trade and investment.

For too long, Africans and their partners in the West have looked to international aid as the answer to the poverty and economic challenges confronting developing countries such as Uganda. While well-intentioned, this over-emphasis on aid has actually handicapped Africa by promoting a dependency mentality and the impression that African countries could not compete in the global economy.

By itself, aid cannot transform societies. Only trade can foster the sustained economic growth necessary for such a transformation. If somebody buys what Uganda produces, then he is rendering my country the best assistance possible, especially if the trade is in manufactured or processed goods, which tend to employ more people, at higher levels of skill, and which have subsidiary benefits throughout the economy.

Africa does need development assistance, just as it needs relief from its crushing international debt burden. But aid and debt relief can only go so far. If you cancel the debt of a poor man, what guarantee do you have that he will not contract new debts? The more pressing challenge is to increase the income of this man so that he can balance his household budget.

Africa needs opportunity, especially the opportunity to trade its goods in rich-country markets. The African Growth and Opportunity Act (AGOA) was an enormous step in the right direction. This landmark U.S. legislation gives duty-free and quota-free access to the U.S. market to essentially all goods produced in Africa, including clothing (which had previously been subject to both tariffs and quotas). In Uganda and many other African countries, this legislation is bringing in new foreign investment and holds the promise of creating thousands of new jobs.

By opening its market to African goods, the U.S. is also doing itself a favor. More investment and more employment in Africa will increase the purchasing power of the African people, thus providing a more attractive market for U.S. goods. Since the enactment of AGOA, U.S. exports to Africa have increased significantly, creating new American jobs.

For our part, we Africans must do more to put our own houses in order. Here again, there is a growing consensus between the donor countries and the developing world. President Bush has pledged substantial amounts of new development assistance for countries that are opening their markets, improving governance, and encouraging economic and political freedoms. As he rightly points out, aid to countries that are not committed to such objectives is often wasted.

African leaders agree. In the New Economic Partnership for African Development, a plan endorsed by the Organization of African Unity, African leaders have committed to many of the same principles described by President Bush and have embraced full responsibility for eradicating poverty and placing their countries on a path of sustainable growth and development, with special attention to trade. This plan, and the West's role in helping Africans to achieve it, is expected to be a major focus of discussions at the G-8 summit in June.

I know first-hand of the transformative power of trade and of the measures countries must take to attract trade and investment. Uganda has implemented wide-ranging economic reforms in recent years, leading to macroeconomic stability and economic growth averaging 6.5% over the past 16 years. These measures, along with incentives to diversify the economy and expand exports, have attracted foreign investment and created new jobs.

Another sign of the new African commitment to development through trade is the active and growing involvement of African governments in the World Trade Organization. African delegations played an important and influential role in the launch of the new round of international trade negotiations at the WTO meeting in Doha last November.

All of this suggests that there is a new dynamic evolving between Africa and the wealthier countries of the world. We Africans are no longer looking for handouts. Rather, we are asking for the opportunity to compete, to sell our goods in Western markets, to be considered for private investment funds, and to participate more fully in the global trading system. In short, we want to trade our way out of poverty and ask that the U.S. and other developed countries support us in this effort.

Mr. Museveni is president of Uganda.

Updated May 24, 2002 - Wall Street Journal

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