Report - The Foundation for Democracy in Africa

For more information on the AGOA Civil Society Network
including how to become a member and how to attend future
AGOA Civil Society Sessions, contact us at:
AGOA Civil Society Network Secretariat
c/o The Foundation for Democracy in Africa
1612 K Street, NW, Suite 1104, Washington, DC 20006
Phone: 202.331.1333 • Fax: 202.331.8547
Email: agoacsonet@democracy-africa.org
The Next Step for Sustaining AGOA’s Momentum:
A Civil Society Perspective
DECEMBER 2003
Table of Contents
Page
5
6
7
ACKNOWLEDGEMENTS
FORWARD/INTRODUCTION
SESSION DELIBERATIONS
Monday, December 8, 2003
Blackburn Center, Howard University
OPENING CEREMONY
Overview
BRIEFING ON AGOA
Overview
QUESTION AND ANSWER
ROUNDTABLE DISCUSSION: Sustaining AGOA’s Momentum
Overview
LUNCHEON REMARKS
Overview
AGOA: Elements Eligibility, Compliance and Trade Issues
Overview
QUESTION AND ANSWER
AGOA Civil Society Communiqué Building
Overview
FINAL COMMUNIQUE
AGOA Civil Society Session Welcome Reception
Overview
7
8
10
16
19
19
22
23
24
26
Tuesday, December 9, 2003
Lehrman Auditorium, The Heritage Foundation
WELCOME REMARKS
Overview
QUESTION AND ANSWER
TOOLS AND METHODS FOR CONDUCTING RESEARCH ON TRADE AND
COMMERCE IN AFRICA
Overview
QUESTION AND ANSWER
HOW TO MONITOR AND TRACK THE IMPACT TRADE HAS ON YOUR
COUNTRY
Overview
QUESTION AND ANSWER
2
27
28
30
30
31
32
LUNCHEON REMARKS
Overview
QUESTION AND ANSWER
“DOING BUSINESS IN AMERICA”
Overview
QUESTION AND ANSWER
HOW TO ESTABLISH A CIVIL SOCIETY NETWORK
Overview
33
34
36
37
38
Wednesday, December 10, 2003
The World Bank Institute
CLOSING SESSION: Digital Video Conference
Overview
APPENDIX A: Session Speeches and Presentations
Leonard Robinson, President & CEO, Africa Society of the National Summit on
Africa
Fred Oladeinde, President, The Foundation for Democracy in Africa
Ambassador Josette Shiner, Deputy US Trade Representative, Office of the US Trade
Representative
Under Secretary Alan Larson, Under Secretary of State for Economic, Business and
Agricultural Affairs, US Department of State
Honorable Jim McDermott, Co-Chair, Congressional Africa Trade and Investment
Caucus, US House of Representatives
Florizelle B. Liser, Assistant US Trade Representative for Africa, Office of the US
Trade Representative
Paul Brenton, Senior Economist, International Trade Department, The World Bank
Malik Chaka, Subcommittee on Africa, US House of Representatives
Anthony Carroll, Vice President, Manchester Trade
Sharon Pauling, PVO/NGO Advisor, Bureau for Africa, USAID
Dr. Oumar Makalou, President, Center for Studies and Research for Democracy,
Economics and Social Development (CERDES)
Anthony Okonmah, Executive Director, The Foundation for Democracy in Africa
Mary Lisa Madell, Trade Policy Analyst, Animal and Plant Health Inspection Service
(APHIS), United States Department of Agriculture
Donald Muncy, International Accreditation Registry (IAR)
Carrie Walczak, Country Manager for East and Southern Africa, US Trade and
Development Agency
Leon Hayward, Chief, Trade Agreements Branch, Office of Field Operations, US
Customs and Border Protection (CBP)
Cornelius Herelle, Trade Development Specialist, The Jay Malina International Trade
Consortium, Miami-Dade County Government
Millicent Obaso, Deputy Director, Adventures in Health Education & Agricultural
Development, Inc. (AHEAD)/Kenya Diaspora Network
Elizabeth Tankeu, Commissioner for Trade and Industry, African Union
3
39
Edwin Feulner, Ph.D., President, The Heritage Foundation
Constance Berry Newman, Assistant Administrator for Africa, USAID
Dr. Angel Batiste, Area Specialist, Africa and Middle Eastern Division, Library of
Congress
Dr. Abdul Shaikh Senior International Economist and Regional Coordinator for Africa
& Middle East, International Trade Administration, US Department of Commerce
Saloman Samen, Trade Coordinator, West and Central Africa, The World Bank
Bahati Modeste, Executive Director, SOCIO
Vernice Guthrie, Director, American Bar Association – Africa Law Initiative
Indur Goklany, Author, "The Globalization of Human Well Being", CATO Institute
Edwin Meese, III Chairman, Center for Judicial and Legal Studies, The Heritage
Foundation; Former US Attorney General
Aleta Williams, Education Advisor, Bureau for Africa, USAID
Dr. Lynette Lashley, Chair, Communication Arts, Indiana University South Bend
Stephanie Childs, International Projects Coordinator, Senior Advisor to the National
Director, Minority Business Development Agency, US Department of Commerce
Sam Smoots, Regional Manager-Investment and Economic Growth, Overseas Private
Investment Corporation (OPIC)
Colleen Dyble, Associate Director – Institute Relations, ATLAS
APPENDIX B: SUPPLEMENTAL POWERPOINT PRESENTATIONS
Paul Brenton, Senior Economist, International Trade Department, The World Bank
Leon Hayward, Chief, Trade Agreements Branch, Office of Field Operations, US
Customs and Border Protection (CBP)
Dr. Angel Batiste, Area Specialist, Africa and Middle Eastern Division, Library of
Congress
Dr. Abdul Shaikh, Senior International Economist and Regional Coordinator for Africa
& Middle East, International Trade Administration, US Department of Commerce
Soloman Samen, Trade Coordinator, West and Central Africa, The World Bank
Indur Goklany, Author, "The Globalization of Human Well Being", CATO Institute
APPENDIX C: LIST OF PARTICIPANTS
4
The Next Step for Sustaining AGOA’s Momentum:
A Civil Society Perspective
Presented in Cooperation with
The African Union
Convened by:
The Foundation for Democracy in Africa
Mauritius Council of Social Service (MACOSS)
In partnership with:
Inter Action
The Heritage Foundation
The AGOA Civil Society Network
The Ralph Bunche Center for International Affairs at Howard University
The Howard University School of Business
US Department of State
United States Agency for International Development (USAID)
The World Bank
The Atlas Foundation for Economic Research
The Africa America Institute
Bread for the World
The International Foundation for Education and Self Help (IFESH)
Opportunities Industrialization Centers International
American Bar Association – Africa Section
Africa Society of the National Summit on Africa
5
Convening a civil society network can be an important step for individuals, countries and
organizations committed to a enabling a future for all peoples based upon freedom and
opportunity where prosperity can thrive. This step has been taken within the AGOA process in
cooperation and partnership among numerous organizations. The Heritage Foundation is
delighted to be in this company and to have played host to the Second Civil Society Session
during its deliberations on December 10, 2003. Heritage is more optimistic about future of
Africa and the citizens of its various countries because of this Civil Society process. The Africa
Growth and Opportunity Act provides a new vision for the relationship between the United
States and the African nations, one that offers hope and great possibilities for economic growth
and opportunity. And the Civil Society Network enhances those possibilities by providing a
framework for the exchange of ideas and values and building personal and professional
relationships based on mutual respect, markets and the rule of law. The Index of Economic
Freedom (www.heritage.org/index) co-produced by the Heritage Foundation and the Wall
Street Journal sets forth the core principles that will offer the Civil Society Network a solid
foundation upon which to seek tangible and measurable improvements in each country that will
advance the promise of greater economic success, entrepreneurial development and the
protections of the rights and property of each citizen.
This report on the Civil Society session illustrates the lively exchange of ideas and values played
out in the various deliberations. A remarkable group of presenters from United States
Government officials to influential leaders offering key elements of information and
encouragement bring a sense of commitment and direction to this Second Civil Society Session.
Congratulations and compliments are due to the Foundation for Democracy in Africa led by Fred
Oladeinde and the Mauritius Council of Social Service for the leadership they have shown in
organizing and guiding this important work.
Becky Norton Dunlop
Vice President
The Heritage Foundation
6
A. Session Deliberations
Day One – December 8, 2003
I. OPENING CEREMONY
Overview
The Opening Ceremony of the Second Civil Society Session commenced the first day of the
three-day conference, and took place at the Blackburn Center at Howard University. A number
of speakers commented on the relevance of holding the event at Howard University since the
institution itself exemplifies the successful efforts of civil society leaders in building a strong and
reputable educational institution that celebrates black excellence and achievement.
Harold Scott, Deputy Director, Ralph J. Bunche International Affairs Center, Howard
University, gave the first remarks of the conference and offered a warm welcome to participants
on behalf of Howard University and expressed the pride that Howard has in hosting such an
important and timely conference. Mr. Fred Oladeinde, President of the Foundation for
Democracy in Africa and Co-coordinator of the AGOA Civil Society Network Secretariat also
welcomed participants to the informative three-day session with a number of speakers
knowledgeable of the hard work that is involved in firmly establishing civil society’s role in
implementing AGOA initiatives. He urged participants to seize this opportunity to ask the
presenters from the US House of Representatives, the US Executive Branch, Civil Society
Organizations
and
other
governmental officials from
Africa and the US relevant
questions that will help in
developing
recommendations
and comments on how members
of civil society can make AGOA
work more efficiently. After
giving an overview of topics to
be discussed, Mr. Oladeinde
introduced
Mr.
Leonard
Robinson, President of the
Africa Society of the National
Summit on Africa who in turn
also gave a warm welcome to participants before providing the introductory remarks for
Ambassador Josette Shiner, Deputy US Trade Representative for the Bush Administration. In
her remarks, Ambassador Shiner shared the Bush Administration’s current efforts geared
towards sustaining AGOA and informed participants that the Bush Administration commends
their efforts to realize of the possibilities under AGOA. As she stated, “Those gathered here
today have been and will continue to be the sowers of hope in Africa. With the clear visions for a
stronger and more prosperous region, you have nurtured that hope with compassion, devotion
and wise action in seeing the possibilities contained in AGOA. Many of you are championing the
importance of trade to Africa’s development. [The Bush Administration] shares with you that the
7
fuller [integration] of sub-Saharan African countries into the world economy is crucial for longterm economic growth and development. [Our] interests in Africa’s economic success include
countering poverty, spreading free market values and good governance, assisting with the
development of rule of law, helping to address the scourge of AIDS and creating a sound
economic base for democracy.”
After Ambassador Shiners remarks, Mr. Fred Oladeinde
introduced the next speaker Under Secretary Alan
Larson, Under Secretary of State for Economic, Business
and Agricultural Affairs at the US Department of State.
Under Secretary Larson welcomed participants from
abroad to the US. As the theme of the Third US – subSaharan Africa Trade and Economic Cooperation Forum
was “Building Trade, Expanding Investment”, he noted
the importance of AGOA to continued US development
initiatives in Africa – including the Millennium Challenge
Account (MCA). As Under Secretary Larson described,
“Through MCA partnerships, we will support eligible
developing nations that demonstrate a strong commitment
to the proven development foundations of just governance, investment in people through health
and education, and promoting economic freedom.” He also emphasized the importance of Civil
Society organizations in helping to build a strong US – Africa trade partnership that benefits both
countries and always brings to the forefront important issues to sustainable development in
Africa.
Following Under Secretary Larson’s remarks was a vote of thanks by Dr. Satish Boolell,
Mauritius Council for Social Service (MACOSS). On behalf of MACOSS - the African-side
representative of the AGOA Civil Society Network Secretariat – Dr. Boolell extended official
thanks to participants and speakers for gathering to further discuss the implications of AGOA in
African Civil Societies and wished participants a productive and fruitful conference.
II. BRIEFING ON AGOA
Overview
After the official opening
ceremony, Vivian Lowery
Derryck,
Senior
Vice
President and Director of
Public/Private Partnerships,
Academy for Educational
Development moderated the
Briefing
on
AGOA.
Congressman
Jim
McDermott,
Co-chair,
Congressional Trade and
Investment Caucus, US House of Representatives gave the first remarks to participants during
8
the briefing and went over the recent introduction of AGOA III to both the House and Senate in
the US Congress as well as the important role that civil society organizations play to the success
of AGOA. As Congressman McDermott noted, “I believe that civil society organizations
ultimately will propel a strengthening of U.S-Africa trade by supporting an extension and
enhancement of AGOA… [and] I look forward to working with you, with members of Congress,
the Bush Administration and the African diplomatic corps, to ensure that AGOA may continue to
be a beacon of hope and a path to Africa’s destiny.” Congressman McDermott also discussed
the vast amount of opportunity in Africa – such as the rich ecotourism possibilities that are
throughout the continent as well as the serious challenges that must be addressed with problems
such as the HIV/AIDS pandemic.
Following Congressman McDermott’s remarks, Florizelle Liser, Assistant US Trade
Representative for Africa in the Office of the US Trade Representative for the Bush
Administration spoke to participants about the tangible successes of AGOA (AGOA has created
over 190,000 African jobs and over $340 million in investments. Over 92 percent of U.S.
imports from AGOA-eligible countries now enter the United States duty-free, under AGOA,
GSP, or zero-duty Most Favored Nation rates) as well as challenges faced under the bill (Of 38
eligible countries only half are exporting a million dollars or more under AGOA and its GSP
provisions). In her remarks, she touched upon the importance of product diversification to the
success of AGOA for a greater number of markets as well as training so that people know how to
meet standards necessary to partake in trade under AGOA. She ensured participants that she and
others from the Office of the Trade Representative would be meeting closely with sponsors of
the AGOA III Bill. As she noted, “Our vision for AGOA III is to amend the Act in ways that
would give greater confidence to investors as well as producers and buyers of African products.
One way to do this is to fulfill President Bush’s pledge to seek the extension of AGOA beyond
2008. We want to find an appropriate means to address the rapidly approaching expiration next
year of AGOA’s third-country fabric provision… The objective is to make the regulations as
simple and straightforward as possible so that all know precisely what is allowable and what is
not. Ideally, AGOA III can also strengthen our ability to deliver technical assistance to countries
and individuals who are eager to make the most of AGOA’s trade benefits.”
Mr. Jan van Vollenhoven, Director for the US Department of Foreign Affairs in the Republic
9
of South Africa’s government gave the next set of remarks and in his address he spoke from an
African perspective regarding AGOA and the ways in which the Bill is beneficial on the
continent. Mr. van Vollenhoven stressed the importance of intra-Africa work in taking
advantage of the opportunities provided by AGOA. As he said, “When we have NEPAD
implementation programs which are very much regionally based around the regional economic
organizations (such as SACU in Southern Africa), it is important that these NEPAD
implementation programs, which address issues such as capacity building and infrastructure
development are synergized with the AGOA processes. So we shouldn't talk about an AGOA
implementation plan, we should talk about how AGOA can complement the NEPAD
implementation plan on the continent and in the regions. It is then that we will be able to put
together all the different leverages to take the continent forward.”
Following Mr. van Vollenhoven’s remarks was Mr. Paul Brenton, Senior Economist,
International Trade Department, The World Bank. Mr. Brenton shared a PowerPoint
presentation with participants that outlined the difference of the impact of AGOA for Least
Developed Countries (LDCs) and non-LDCs. There are still a number of barriers that keep
African businesses from being able to benefit from AGOA fully such as the rules of origin,
which mandates that firms must prove what country a product comes from – a costly process for
many African businesses. “Crucial from our perspective is the rules of origin on apparel and the
special rule on time and coverage, and the US here can set an important precedent, which we can
then be used to hammer at the EU to liberalize their rules of origin because the EU rules of origin
on clothing remain restrictive.”
The final presenter during the Briefing on AGOA was Mr. Malik Chaka, Subcommittee on
Africa, US House of Representatives. In his speech, he spoke about the important relevance of
holding such an important conference at Howard University – one of the first centers created
under civil society pressure for black excellence, and while many good things have come from
AGOA, there is still much work to be done with the bill and on the ground in Africa. “It's
important to understand that AGOA is not a panacea; it's not a silver bullet, a be all or end all,
but it is an important contribution that can be utilized in transforming Africa's economy and can
be used to help eradicate poverty in Africa.”
Question and Answer
1. In the proposal of [the AGOA III bill], are there provisions where
people can be trained on establishing standards for products that come
into the United States? People often lack the understanding of
requirements necessary to export to the US - as Ms. Liser mentioned so, can we have trainers to help the farmers and others in Africa that
are developing products?
a. Congressman McDermott - In the bill we have allocated 20 people to go out to various
countries of Africa to act as experts and instructors for people in Africa on that very level.
They may decide that its better to bring a few people here to the US, but we recognize that
that is one of the blocks, but it's not an impossible one. If Africans can ship to Europe,
they certainly can ship to the United States, and if they're not able to its only because they
10
don't understand our rules and we need to really help that process, so we've really tried to
take that into account in the bill.
2. Congressman McDermott mentioned agricultural subsidies as a major problem for African
countries as well as other developing countries - I'm wondering from your perspective in
Congress what will be the policy alternatives that are politically feasible. What can we propose
to Congress that will get bipartisan support knowing how politically important agricultural states
are not only in congressional, but in the upcoming presidential election?
a. Congressman McDermott - I don't know what the answer is, but Congress and the
Administration need to sit down and figure out how serious they are about African
development because what happened in Cancun was really Africa saying, "Hey wait a
minute. What do we get? What we see is you subsidize and then you want us to come and
give away our subsidy?" It is a huge problem, not easily resolved, but I think it's one that
requires us to be open and raise the issue publicly. The trade representative and I were
talking about this and this has been a problem. You're right to raise it, I don't have the
answer yet, but we're working on it.
3. I strongly believe that trade is at the end of the whole process. How do you trade if you don't
have the requisite skills to innovate as an African? How do you trade if you're not in a position
to attract investment? How do we trade with the US when we have these stringent SPS
measures? AGOA seems successful in identifying the fundamental problems faced by Africa.
As all speakers have noted Nigeria and South Africa have been able to partake in the AGOA
legislation, simply because they're big economies, so there seems to be much more that needs to
be done before Africa as a whole will be able to trade.
a. Florizelle Liser - One of the reasons that many of us on the Hill, in the Administration,
in Civil Society are supporting AGOA III is, we know that there are supply side constraints
- in other words the US can open it's market completely to countries of Africa - not just the
38-eligible now, but all of them - and it would not immediately have a benefit to the extent
that we would like because many of the countries don't actually produce products yet that
they can get into the US market, or if they do produce products, they're not producing the
products competitively, or if they do produce the products competitively, they don't have
the infrastructure - transportation, efficient ports, etc - to get them to the US market
effectively. So a lot of what we do under AGOA is through trade capacity building. We
have three AID centers for trade competitiveness; we call them our "competitiveness
hubs". One is in Accra, Ghana, another in Gaborone, Botswana and the other Nairobi,
Kenya, and we're trying to use those to develop the capacity of the countries to use it.
We do have some countries - including Swaziland - that have begun to do some exports
under AGOA in the apparel sector. Lesotho - which is a Least Developed Country actually is the largest sub-Saharan exporter of apparel to the United States now. It beats
out Mauritius and several others. So we do know that if the countries get the investments
that are needed, if they have the right kinds of infrastructure in place and if they get the
kind of technical assistance and trade capacity building that is necessary to address supply
side constraints, that we actually do end up seeing an export and a difference, but it's also
11
about being strategic. That's why I said before; every AGOA country should have an
AGOA action plan. This is a plan not only made by the government, but by civil society
and the private sector, where they sit down together in some kind of tripartite process.
They look at what they have, they look at what they can be competitive in and then they all
work together to basically be productive in developing those products that they can then
export to the US under AGOA and take advantage of it. You can't just sit there with
AGOA and expect that something will happen. You have to have a proactive plan for how
you want to utilize it.
b. Jan van Vollenhoven - I think it's important to
understand the importance of regional integration
processes on the continent, so that the smaller economies
can feed off of the larger economies to drive the type of
expansion of those economies that are required. This is
exactly what we talk about when we talk about NEPAD.
When we have NEPAD implementation programs, which
are very much regionally based - around the regional
economic organizations (such as SACU in Southern Africa). It is important that these
NEPAD implementation programs, which address these issues such as capacity building
and infrastructure development are synergized with the AGOA processes. So we shouldn't
talk about an AGOA implementation plan, we should talk about how AGOA complements
the NEPAD implementation plan on the continent and in the regions. It is then that we will
be able to put together all the different leverages to take the continent forward.
c. Paul Brenton - I think just as we are saying that the benefits of AGOA are maximized
when the coverage of AGOA is greatest and when there are liberal rules, which govern the
preferential access, that's equally true for regional integration in Africa. That those
regional integration agreements will have the greatest benefit when they cover the greatest
range of products and they're subject to liberal rules. In some cases that's not the case at
the moment and there is potential and opportunity to improve the region agreements by
liberalizing the rules and making them simpler and making them easier to satisfy and to
ensure that all products are covered and that these regional agreements are not really used
as alternative means for protecting particular sectors, but they're really open and encourage
regional integration.
4. We know that there is a phasing out of the country quotas under the WTO agreement on
textile and clothing in 2005. Is there any indication as to what the impact will be in terms of
countries that are benefiting from AGOA under those provisions? I think it was Ambassador
Shiner or Under Secretary Larson that said China brings in 50,000 people everyday into that
sector. What do we expect once that regime comes in place?
a. Florizelle Liser - First, I think that everyone understands that those industries have been
gateways for the industrialization process all over the world. So what we have hoped
would happen under AGOA and AGOA II has begun. Those countries that have long
standing investors in the apparel industry have taken full advantage of AGOA. There have
been hundreds of millions of dollars of new investments that have taken place but we also
12
want to develop the African textiles industry, and in order for the Africans to at the end of
the day be able to compete in a quota-free apparel and textiles market, which happens in
2005, there are a couple of things that have to happen. One of them is that we have to find
and get more investment in the textiles industry. Africa cannot keep depending on
importing Chinese and other Asian fabric in order to make the apparel that they then sell to
Wal-Mart, Sears, Target and JC Penny's and so on. So that is a critical piece and there are
certain countries that are in my opinion well positioned to be able to develop a textiles
industry. And another thing that we need is vertical integration across borders so that you
get people that have the best cotton - maybe in Burkina Faso - that sell that cotton to a
Senegalese company who is then well positioned to develop that cotton into yarn and fabric
who then sells it to Lesotho and Namibia who is well positioned to then take that fabric,
make it into apparel and sell it to the US market. We see some of that happening now. We
need a lot more of it to happen. Lastly, if Africa does that - if we get investment in the
textile sector, continued investment in the apparel industry and if we get vertical
integration across countries I think and I've read studies where they say that the Africans
will be able to compete after the quotas go off in 2005. And remember even when the
quotas go off in 2005, other countries like China will still have to pay an average of about
12% duty, but the AGOA countries will pay zero. So, if they can become as efficient as
possible, they will have a continued advantage post-2005.
b. Paul Brenton - I think 2005 will have a profound effect on the clothing sector. One thing
we're trying to understand is that there's been a long investment in Africa in certain
countries in the clothing sector. Now do those investors have a very short-term horizon or
think they can make a big enough return in 2-3 years on their investment or do they think
they can still make a profit after 2005. My guess is that there is a case that there still are or
will be opportunities to produce clothing in Africa and to compete with China. I think
particularly if in developing markets -- since China is particularly adept in producing very
large volume standardized products -- if African suppliers can cultivate direct links with
buyers in the US, which I think is part of the basis of the success of AGOA, then it may be
those relationships that will be able to continue afterwards. If the decisions of investors are
anything to go by, then that is the case. We've done some very preliminary work at the
World Bank looking at very detailed product structure of clothing products which are
produced in Africa and in comparison with the clothing products that are produced in
China and there isn't a great deal of similarity. It seems that at a very detailed level
products in Africa are very different from those produced in China. What we do find is
that there is a high degree of similarity between the products produced in different African
countries. So that, I think, is important that if in some way free trade agreements that are
being assigned to favor some African countries over others, than that could have quite a
profound impact. But we also found the greatest amount of similarity with countries
outside of the region present in Brazil. And that suggests that the FTAA could be an
important impact. So, I think that overall in clothing there is an important impact that we
need to try and understand more for after 2005. But it's not all doom and gloom. If the
decisions of investors are anything to go by than there is scope for a competitive clothing
sector in sub-Saharan Africa.
5. Is there any website, Mr. Brenton, where we can access these details that you've given us?
13
a. Paul Brenton - This is part of ongoing work at the World Bank and our work is always
made as widely available as possible and this is still in the early stages, but I can certainly
make the slides available.
6. First, I want to say that this briefing is very interesting and I would like to thank the organizers
for putting together a very nice and diverse panel. I have a question for Ms. Liser. There are
more and more voices out of Africa saying that Free Trade may be better than Aid in terms of
development. Do you hear those voices and what do you say when you hear them? And the
second question is for Jan. I hear that the US is organizing a free trade agreement with southern
African countries. Can you share with us the rationale behind that? Why is South Africa
interested in that rather than trading within the context of the WTO? And then, Malik - There is
legislation for AGOA III and there have been meetings about the deficiencies and achievements
of AGOA so far. Could you share with us the kind of consultations that have been involved to
strengthen this legislation?
a. Florizelle Liser - I often hear people sound off about either supporting trade or
supporting aid, but both of them are needed and both are critical. As Vivian Lowery
Derryck [panel moderator] has noted the nexus of the two - trade and aid - which is trade
capacity building is really critical. I would just say when we hear the voices that are
supporting trade as a vehicle for economic development and poverty alleviation, I think
those are people that are really looking at the global economy and are looking beyond their
borders, their national borders and are looking at the continent of Africa as opportunity and
then looking beyond Africa to see that we have a global economy that is huge. As we said
earlier, Africa still has a very small share of global trade, which means that there is a lot of
opportunity for taking more advantage among the African countries of the global economy
and trade is the key way to do that. It is an engine of growth and prosperity and for those
of you that have studied development, what you notice is that many areas of the world
before they ever were able to take over in terms of being Asian economic tigers like Korea
and Taiwan and also in Latin America some of the fast growing economies there - they
opened up their markets and they have also taken advantage of the global market. So, I
think that Africans are very wise and have always been. They've looked at the long history
of depending on aid and they've seen that the future is not to be dependent on aid, but I
think that at the same time as I said - aid is still needed. Things like the Millennium
Challenge Account are critical, and I think that we want to take full advantage for the
Africans of both aid and trade. Not one or the other. Concerning SACU, we believe that
bilateral trade, regional trade and global or multilateral trade are all important elements of
economic growth. So we don't see the fact that we are pursuing a free trade agreement
with the five countries of SACU as actually
juxtaposing or being contrary to our desire to see all
that African countries take advantage of the global
economy and to benefit from the Doha Development
Agenda in the WTO. We see these actually as
building on each other. So from the US side, we
believe that the SACU-US Free Trade Agreement can
actually help those countries to take more advantage
14
of AGOA, spur greater regional integration in that region, serve as a model for future free
trade agreements that the US can have with other African countries.
b. Malik Chaka - I'm scared because we're talking about a two-legged stool here - Aid and
Trade. If you build a two-legged stool you're going to fall on your backside. You need a
three-legged stool and the third leg is investment. Trade, Aid and Investment. With a twolegged stool, you'll find yourself on the ground.
c. Jan van Vollenhoven - I do not represent the countries of SACU at this meeting, but only
South Africa. I agree with Ms. Liser that trade agreements are a very important instrument
of driving developing processes. Amongst others - as Malik has pointed out - is
investment, which we should not forget about, as it is extremely important. However, we
see trade agreements as very important instruments in integrating the South African
economy with the global economy. You must remember we come out of a position of
isolation due to our historical past and we are in a challenge to re-integrate in a way that
will provide real benefits for our people and to address poverty and life chances for our
people. We do not approach the trade negotiations as in competition with or contradicting
WTO processes and developments, but we have in the next session of our international
trade representative and he can give you more details on that later.
d. Malik Chaka - The House Africa Subcommittee early in the next congressional term (the
first week of February) will be holding a hearing on AGOA III, and one of the things
people can do is come out en masse and express support for this piece of legislation which
is affecting the legislation we had. I've spent about 20 percent of my time on the African
continent in consultation. We also maintain an open door and welcome input.
7. How do you trade when there are such strict measures? While AGOA has been partially
effective, how much more should be done to make the legislation more effective on the ground?
a. Florizelle Liser – There are a number of supply-side constraints. While some African
countries do not produce competitively, if at all. There are programs under AGOA to help
increase capacity and competitiveness. If a country gets (1) Investment, (2) Infrastructure
and (3) Competitive then AGOA can work well for them.
b. Jan van Vollenhoven – A major boost to AGOA’s effectiveness can be brought about by
regional alliances within Africa. Alliances can help bring African countries to meet the
codes [of standard] set under AGOA.
c. Paul Brenton – More liberal access to markets would create better trade under the bill.
d. Malik Chaka – Increased Trade, Aid and Investment are key to increasing the
effectiveness of AGOA in Africa.
15
III. ROUNDTABLE DISCUSSION: Sustaining AGOA’s Momentum
Overview
Rosa Whitaker, President and CEO, The Whitaker
Group, Former US Trade Representative for Africa,
moderated this panel that focused on ways to build on
the progresses that AGOA has made thus far. Ms.
Whitaker - who currently co-chairs the AGOA III Action
Committee along with the Honorable Jack Kemp and
Carl Ware of Coco-Cola – began the session by speaking
about the work the Committee has done on the AGOA
III legislative proposal and shared her pride in the House
and Senate’s introduction of the AGOA III legislation,
which incorporated many of the committee’s
recommendations. She gave thanks to Senator Lugar,
Congressman
Royce,
Congressman
Rangel,
Congressman McDermott and their colleagues who have
done a tremendous job in introducing this legislation. In expounding upon the importance of
AGOA III, Ms. Whitaker noted, “We understand there has been a 59% increase in AGOA's
export to the US, but there remains untapped potential and unfinished business and that is the
purpose of this panel discussion today - to talk about how we continue this moment and build on
it. The problem we face is that the original AGOA, which is only three years old, is on the verge
of a midlife crisis. It urgently needs to be extended and expanded. All of us who have worked
on AGOA recognize that if African economies were to achieve sustained poverty-reducing
growth they would have to move beyond reliance on one or two raw commodities to generate
export revenues. If you look at the countries that have had to seek assistance under the IMF's
HIPC program, you'll find that in case after case they fell into debt traps following the
unexpected fall of key commodity prices. Traditional aid was clearly not helping African
countries convert to value added production for export. The debt these economies were
incurring was not translating into effective export capacity. What we needed was a quick fix
based on transferable skills and technology to get Africa off the bottom link of the global value
chain. Global textiles and apparels have proven themselves the answer elsewhere, so we ask
ourselves, why not in Africa? What we have seen is a growth in the textile and apparel sector as
well as other sectors on the African Growth and Opportunity Act, but we're facing some key
challenges now. We're facing the challenge that global quotas on textiles and apparel will end at
the end of 2004. We're facing the
challenge that as it now stands
third country fabric for AGOA
apparel exports will end and over
80% of all apparel coming into
the US under AGOA is made with
third country fabric. We're faced
with the challenge of a confidence
crisis in many African countries
because of the lack of export
capacity. They still haven't been
16
able to take full advantage of AGOA.”
On that important note of finding ways to expand upon AGOA’s momentum, Anthony Carroll,
Vice President, Manchester Trade shared with participants his experience with the bill and key
areas that should be focused on in working to sustain AGOA’s work, namely extending AGOA
in terms of time and application – especially in working on subsidies, preferences and quotas,
capacity development in terms of technical assistance, engaging private sector investment and
interest, infrastructure development, capital – “We need to continue to try to involve and
articulate measures in which Africans can secure the necessary investment and trade finance
capital to be able to produce and export to the United States. Capital is a critical ingredient to
sustaining Africa’s economic relationship with the United States and sustaining the momentum
of AGOA.”, and (among others) Intra-African trade. Mr. Carroll noted that the initiative taken
by Southern African countries serves as good example of the type of work that should continue
to take place in Africa so that Africa can shape it’s own ways to sustain AGOA’s momentum
In the next set of remarks, Sharon Pauling, PVO/NGO Advisor,
Bureau for Africa – USAID, emphasized the importance of Civil
Society efforts and shared the ways in which USAID has worked to
support trade readiness and sustainable development: “Although it is
not the mandate of USAID to formulate legislation, USAID’s
participation in the AGOA Forum reflects its conviction that bilateral
assistance activities are a critical component of increased international
trade within and beyond Africa. As the legislation evolves, so must the
enabling environment for trade and investment. In fact, the AGOA legislation acknowledges
USAID’s role by stating that, “sustained economic growth in Sub-Saharan Africa depends in
large measure upon the development of a receptive environment for trade and investment, and
that to achieve this objective USAID should continue to support programs which help to create
this environment.”
Hon. (Mrs.) Nkechi Nwaogu, National President, Women in
Africa for Development (WIAFOD), spoke about women,
AGOA and the Nigerian Experience in terms of sustaining
AGOA’s momentum. She noted that there are a number of
shared goals between both men and women of Nigeria in
making effective use of AGOA. Trade barriers such as the
high standards of quality demanded for participation in trade
with the US, lack of access to credit, etc are obstacles. In
Nigeria there are some short-term funds available, but if
there is not a level ground from which to compete –
something that short term funds are not sufficiently helping
to create – then AGOA cannot be effectively utilized. Since
AGOA is a process and not a quick fix to Africa’s problems,
a focus should be made on helping to create a healthy
investment climate along with the efforts being made to build
capacity through technical assistance and institutional development for the greater utilization of
AGOA. In the Agricultural sector in Nigeria, most of the products are seasonal. While technical
17
assistance is needed in helping with preservation of materials for trade, training is also key to
successfully taking advantage of AGOA’s benefits. Good governance, transparency in business
dealings and fighting corruption are also important areas where training can help in developing
an environment in Nigeria and throughout Africa that is conducive to sustaining AGOA’s
momentum. Not many people in Nigeria know the eligible items under AGOA, and at least 80%
of trade in the agricultural sector is done informally by women. A focus on training these
women on formal business dealings and of the benefits of AGOA is not only a major aspect of
Hon. Nwaogu’s civil society organization – Women in Action for Development (WIAFOD), but
also a significant way to help in sustaining AGOA’s momentum on the ground in Africa. In
order to harness the vast potential in the African region, AGOA should make conscious efforts to
provide training for women and concrete opportunities to enter the markets. She also
emphasized that Africans must be given the opportunity to produce the items that come from
their country naturally.
Dr. Oumar Makalou, President, Center for Studies and Research
for Democracy, Economics and Social Development (CERDES)
spoke about the key elements of reflecting on how to go about
sustaining AGOA’s momentum. He suggested that participants look
at where Africa currently stands under AGOA, current results under
AGOA as well as what civil society can do to meet the Africa’s
unmet needs under AGOA. Dr. Makalou also stressed the
importance of deconstructing common myths about the bill and to
face up to the challenges under the bill for the greater good for
Africa. “… the main goal of AGOA is a renewed African trading
presence on the international scene. IT is a concrete way of
integrating Africa into the world trade and economy. It is a challenge to the belief that Africa is
doomed to be a continent of victims and beggars. It destroys the fear or hesitation for Africans
to compete on equal foot in the global economy. Once given the right conditions of environment
and equity, Africans prove that they are capable of being ‘schumpeterian’ entrepreneurs,
creative, innovative, competitive and dynamic. The case of Africans in countries with good
governance and throughout the Diaspora are illustrative of this assertion. So Africans can do,
they can make it, they can grow if they are offered an equitable opportunity.”
Iqbal Sharma Meer, Chief Director, Bilaterals, International Trade and
Economic Development, Department of Trade and Industry, Republic of
South Africa began his presentation by reminding participants of the
importance of civil society organizations in the freedom and evolution of
South Africa. As AGOA is a “painkiller” that does not take away all the
symptoms of Africa’s economic development problems, education is
important on both sides of the development of the bill [namely US and
Africa], and civil society is in an unbiased position to help with that
effort. He also noted that while American capacity building encourages
dependency, that American systems must be used or understood in order to engage in trade with
the US effectively. A level playing field and respect for subsidies will be key to sustainable
development in Africa. One of the problems that Mr. Meer sees with AGOA is that it is a
unilateral approach and tells Africa what it needs instead of asking. Civil Society is in a position
18
to change this and should do so in the context of NEPAD and other African-led initiatives.
IV. LUNCHEON REMARKS
Overview
Dr. Charles Mahone, Jr., International Business Professor, School
of Business, Howard University extended greetings to participants
and wished them an enjoyable meal which was sponsored by the
School of Business. He congratulated them on a successful
conference so far and commended them on their continued efforts to
promote sustainable development in Africa.
Dr. Gershwin Blyden, Director, Institute for Democracy in Africa also addressed participants
during the luncheon and
gave the introduction of the
distinguished
luncheon
speaker - Dr. Jendayi
Frazer, Senior Director for
African
Affairs,
US
National Security Council,
Bush Administration.
Civil
Society
Session
participants were honored to
have Dr. Frazer provide
remarks during the first
day’s Luncheon. Dr. Frazer
shared with participants the Bush Administration’s dedication to see AGOA become a success
for Africa and to see Africa attain sustainable development. Reflecting President Bush’s vision
of an independent and peaceful Africa, AGOA is the centerpiece of Africa’s developmental
growth. 35,000 jobs overall have been created and this development illustrates AGOA’s
potential as a way for Africa to move away from an impoverished status. She sees a bright
future between the private sector and public sector and the shared vision of Africa between the
two sectors as determined to succeed.
V. AGOA: Elements, Eligibility, Compliance
and Trade Issues
Overview
Anthony Okonmah, Executive Director, The Foundation
for Democracy in Africa moderated this session and began
by sharing with participants some background on AGOA
and reminding participants of the crucial role of civil society
and the AGOA Civil Society Network in coming up with
recommendations for where AGOA should be headed in the
19
near future and how it should be shaped in order to make the best impact on African trade and
development. Mr. Okonmah then went on to introduce the first speaker of the session, Mary
Lisa Madell, Trade Policy Analyst, Animal and Plant Health Inspection Service (APHIS),
United States Department of Agriculture. Ms. Madell gave an overview of how APHIS works
and operates its regulations (that have proven to be a challenge for some African exporters
unaware of regulations). “I think that the message for this forum, which deals with the role of
civil society organizations in realizing the potential offered under AGOA. African producers,
processors, and traders need effective associations to promote the creation and strengthening of
sanitary and phytosanitary infrastructure. This is not only necessary to for agricultural exports, it
is even more important for improving output and contributing to food security.” She also
assured participants that APHIS is working with other US agencies to ensure that APHIS can
contribute to the success of AGOA and help Africans take advantage of the opportunities that it
provides.
The next presenter, Donald Muncy, International
Accreditation Registry (IAR), also touched upon trade
standards as related with AGOA and told participants of
the benefits of accrediting their trade initiatives.
Accreditation is beneficial in that it can improve the
quality of products, help to ensure food, occupational and
health safety, assist in the creation of consistent standards
on the ground, ensure the equal treatment of workers, etc.
As a Civil Society organization, the International
Accreditation Registry can “help to foster an environment
that benefits African business all the way to the consumer. The focus at the moment is, however,
on the African business community to help demonstrate that their adherence to world standards
will help them… Standards can help business be more successful, to help make your business
more competitive in the world market-place, add in business credibility, and, help improve
overall business practices from the manufacturing level to business management practices.”
Leon Hayward, Chief, Trade Agreements Branch, Office of Field
Operations, US Customs and Border Protection (CBP) spoke to
participants about AGOA Generalized System of Preferences
(GSP) provisions which provide for the duty-free treatment of
certain non-textile articles previously ineligible for preferential
treatment under the Generalized System of Preferences in addition
to the AGOA duty-free and quota-free treatment of certain textile
and apparel articles. He also outlined a number of GSP
requirements under AGOA such as the “Product of” Requirement,
which states that an article must be grown, produced or
manufactured in the beneficiary sub-Saharan African country
(SSA), the article must either be made entirely of materials which originate in 1 or more SSA, or
if made of materials imported into SSA from 1 or more non-Beneficiary country, those materials
must be substantially transformed into a new and different article of commerce.
20
Carrie Walczak, Country Manager for East and Southern Africa, US Trade and Development
Agency (USTDA) share with participants the important work that her organization does in
helping to promote AGOA and US private sector investment in Africa – a major goal that Civil
society supports, of course. Another major goal of USTDA work which is in line with civil
society objectives is their work in minimizing risks for all parties involved in trade and “it assists
host countries in attracting capital to large-scale priority infrastructure projects by, for example,
the private sector, the World Bank, the IFC, etc”. USTDA has also put a lot of funding into
transportation. As she said, “One of the projects I had the honor to organize and partake in
recently was an Orientation, or Reverse Trade Mission, that USTDA sponsored to promote
AGOA. The OV brought a delegation of 12 Ethiopian textile and apparel manufacturers to the
United States, led by State Minister of Trade and Industry Tadesse Haile, to learn about new
methods of manufacturing and supply chain management particular to this industry. There are
many reasons why Ethiopian manufacturers are having a difficult time benefiting from AGOA,
but the one I will focus on is transportation and its relation to the greater supply chain
implications this sector has. What we learned on this OV through a recent study by the
Kellwood Corporation (which I’ve passed out to you) found that it takes countries in SubSaharan Africa 22 weeks in total to make fabric, get the fabric to the factory, manufacture the
final product, and to ship the product to a U.S. port. China, on the other hand, takes only 15
weeks. Somehow, African countries need to make up for 7 weeks of a time difference to be
competitive--they currently have the longest supply chain time length in the world. It is for this
reason that it is important to prioritize transportation and transportation security projects when
focusing on AGOA. Sometimes these projects are seen as capital-intensive when this capital is
needed for much more basic needs. However, some sort of balance needs to be achieved in
Africa where transportation logistics continue to hinder many of the countries’ abilities to
diversify their export markets and enhance competition.”
Cornelius Herelle, Trade Development Specialist, The Jay Malina International Trade
Consortium, Miami-Dade County Government, spoke to participants about the work that MiamiDade County Government is doing in terms of trade development. As he noted, in many ways
Miami has it’s own foreign policy, and because of this the private and public sector there should
be engaged in trade development initiatives like AGOA. Miami is currently the Gateway to the
Americas for the US and – as the closest point to Mainland Africa from the US, Miami will
hopefully soon be the Gateway to Africa as well. Mr. Herelle also emphasized the importance of
21
small to medium sized enterprises getting help in accessing the benefits of international trade for
a broader and more effective impact of AGOA.
Millicent Obaso, Deputy Director, Adventures in Health
Education & Agricultural Development, Inc. (AHEAD)/Kenya
Diaspora Network dealt with the impact of HIV/AIDS on AGOA
in her address and reminded participants of the important human
element involved in trade. She emphasized the idea that investing
in human capital is a cost-effective way of increasing trade
development initiatives throughout Africa. “Studies have shown
that investing in HIV/AIDS prevention at the workplace is saving
the employers manifold what they would spend in caring for the
sick and sharing into the funeral costs. By not preventing
HIV/AIDS now, they spend a fortune later in medical bills, loss of productivity, pension fund
and funeral costs. Ladies and gentlemen, HIV/AIDS is an issue at the work place and a threat to
the business community, investments and economic growth. For AGOA to succeed, HIV/AIDS
issues have to be addressed.”
Question and Answer
1. AGOA was enacted in the year 2000, and before then Kenya was trading in agriproducts,
especially fresh produce, but it has taken three years for APHIS to realize that Kenya needed an
expert to help conduct pest risk analysis so that we could trade agriproducts with the US. Kenya
is one of those countries that trades in horticultural products with the EU and it’s surprising that
we are not exporting those first into the EU market and are send them to the US first. Why can’t
the US government or APHIS train our institutions? We have a Kenyan animal and plant health
inspection service, so why can’t they be trained so that they can do the pest risk analysis on the
ground? It would be easier for us to trade with the US if our own accredited institutions were
able to do the evaluation in the necessary way and as taught by the US experts. And for Mr.
Hayward, Can you address the different US Customs practices that take place between different
African countries especially regarding the amount of products being exported from each country
and the preferable customs practices that take place in those countries?
a. Ms. Madell - Thank you for your question, and you mentioned KAPHIS, which is the
Kenyan Animal and Plant Health Inspection Service, and APHIS has quite a good
relationship with KAPHIS. We interact with them on both trade issues and international
standards issues. I think there was a recent instance where the good relationship that we
have with KAPHIS is paying off. We recently had to suspend imports of geranium
cuttings from Kenya and from some other countries, and the fact that we know the people
at KAPHIS and have a lot of respect for their abilities has meant that we could go over
there and institute a program of improving their greenhouses so that trade would be able to
start up again. The US doesn’t have the same ecosystem as Kenya or other countries, so
there are pests that are problem pests established in Kenya that can’t become established in
Europe because of climatic or environmental differences, but those pests could become
established in the US. We have a far more diverse ecology than Europe. Many of those
products may have been coming in from Kenya for a long time, and the pests may already
have been establish in Europe, but we don’t have them in the US and we don’t want them
22
here, and actually KAPHIS doesn’t want to send them here either. One other point I think
is very important is that we don’t actually have any active import requests from Kenya
right now. Kenya has not identified any products that they want to export to us, and have
us do a risk assessment for. If there are Kenyan exporters or American importers who are
interested in bringing particular products then they need to step up to the plate and let us
know what they want to ship or import. There’s another ball that’s in the court of Civil
Society organizations in the exporting countries. KAPHIS does need assistance and we’ve
worked with them and other donors to come up with programs for pest risk assessment
training and then also for training for inspectors. They’re very receptive to that, but they
need assistance at home. They need support from the budget. Some of their activities are
fee for service. KAPHIS does conduct risk assessments and that’s a fee for service, so if
there is a Kenyan exporter that’s interested in accessing the US market, we’re going to
have pest risk assessor in East Africa to provide some training to supplement what
KAPHIS already has. KAPHIS can do those risk assessments, but then I think it’s
important that the Kenyan exporters be willing to support KAPHIS financially and then in
terms of the kind of data we would need. It goes both ways. We have a good relationship
with KAPHIS, and KAPHIS needs to have a good relationship with the exporters and
producers.
b. Mr. Hayward – The question goes back to whether the harmonized coding system might
be different for imports in the US from two different countries. In general that wouldn’t be
the case. It’s a harmonized code because it is supposed to be universal for imports into the
US as well as at the six-digit level for imports into most of the rest of the world. However,
if there is ever a problem like that, that’s where our ruling program comes in. If you
request the ruling before the merchandise is ever shipped to the US our attorneys will tell
you ahead of time what the proper harmonized coding is, and they will issue a piece of
paper that indicates what ruling they have made and that can be presented to any customs
point in the US and would be accepted to demonstrate the proper harmonized code.
VI. AGOA Civil Society Communiqué-building
Overview
Bertrand Laurent, Chief of Party,
Advanced Training for Leadership and
Skills (ATLAS), Africa - America
Institute (AAI), Gianni Zanini, Lead
Economist, The World Bank, Fred
Oladeinde, President, The Foundation for
Democracy in Africa (FDA) and Ram
Nakoodee, Secretary, Mauritius Council
on Social Service (MACOSS) moderated
this session where participants offered
suggestions to build upon the success of
AGOA thus far. A major focus of the
23
communiqué was to both build on the communiqué that was formed at the last AGOA Civil
Society Session in Mauritius and also to further concentrate on AGOA issues that have
developed since the last civil society session.
AGOA Civil Society Session Communiqué
The second African Growth and Opportunity Act (AGOA) Civil Society Session took place in
Washington in early December, drawing representatives from U.S. and sub-Saharan African nongovernmental organizations (NGOs).
The session, which came as part of the third U.S. – sub–Saharan Africa Trade and Economic
Cooperation Forum, acknowledged the successes that have been achieved under AGOA.
These successes include the creation of thousands of jobs in some AGOA-eligible countries and
are involved in helping to engage those countries into the global economy – especially through
access to the U.S. market. While acknowledging these accomplishments, participants agreed that
more work must be done to promote more effective trade avenues and assure a broader impact.
Recommendations from the Civil Society Session were as follows:
1.
As the primary trade-promotion instrument between the United States and Africa,
AGOA should be extended through the year 2025 and its third-country fabric provision
through 2010. Mechanisms should be put in place to ensure market access and
competitiveness of AGOA-eligible countries beyond the phasing-out of the country quota
under the World Trade Organization agreement on textiles and clothing.
2. Any extension of the present AGOA policy must include input from African
governmental and non-governmental organizations in formulating African trade and
development policies.
3. Any expertise and technological skills that might enable participating countries, as well
as countries with an interest in AGOA, to meet value-added requirements for agricultural
products, should be provided.
4. Every AGOA-eligible country should have an AGOA action plan based on a partnership
among civil society, the government, and the private sector and aimed at full participation
in the benefits of AGOA. This, with an eye toward enabling African countries to meet
international standards and become more competitive in the international global market.
5. AGOA needs to be expanded to encourage African countries to look beyond petroleum in
their quest for development. To this end, the Forum recognizes a need for expansion in
the areas of agriculture, light industry, information technology, tourism, the service and
technology sectors and logistics.
6. The AGOA must address the lack of access to credit suffered by supporting institutions
that create internationally recognized banking and crediting opportunities to small to
medium-sized enterprises (SMEs) in sub-Saharan Africa and the United States.
24
7. Institutions essential to effective trade must be created and strengthened. These
institutions include those promoting public/private partnerships, as well as judicial and
human rights reform in AGOA participating countries.
8. African governments must create environments that encourage foreign investment by
promoting political stability, security, independent judiciaries and effective banking
institutions that contribute to the establishment of economic pluralism in Africa.
9.
Good corporate governance and an investment in human resource development must be
promoted to ensure that trade benefits are diffused throughout African societies.
10. The AGOA Civil Society Network should work with the appropriate U.S. institutions and
agencies, especially USAID, USTA, USTDA, USTR and USDC to support African-led
civic organizations that promote AGOA goals and objectives.
11. The AGOA Civil Society network will work with the AU to ensure that African countries
take full advantage of AGOA provisions with a focus on intra-Africa trade and the
eradication of HIV/AIDS pandemic in Africa.
12. To encourage the U.S. government to provide for more equitable trading opportunities for
Africa, the United States, European Union and Japan must collectively eliminate
subsidies and quotas and all forms of trade protection and allow the laws of comparative
advantage in a free market system create a level playing field that can allow for African
participation.
13. Additional efforts, such as the effort lead by Miami-Dade County to target small to
medium sized businesses – both of which have much to gain from AGOA – must be
encouraged.
14. More direct flights and direct sea routes between Africa and the United States must be
established to facilitate and ease the process of bilateral trade activity.
15. AGOA should include in-country trade shows aimed at bringing together buyers and
sellers to create an environment conducive to trade.
16. Civil society should continue to promote female-owned and, otherwise, underrepresented
businesses, as well as good corporate governance, transparency, accountability, anticorruption activities and the rule of law throughout Africa, through educational and
technical capacity-building programs.
17. Civil society must develop appropriate mechanisms for monitoring eligibility and
compliance and track the impact of trade on the masses of people of Africa and the
United States. Centers of Excellence and Innovation in the Sciences and Technology
developed in African universities and colleges must become resources for conducting
research and applying indigenous knowledge.
25
18. Civil society must support the AGOA’s full implementation through advocacy, capacitybuilding and technical assistance. Capacity building must include training on
international standards and best practices.
19. The Civil Society Network must work with regional HUBS in Ghana, Botswana and
South Africa to promote the dissemination of information and capacity building.
20. Civil society organizations should encourage U.S. investment in Africa, as well as the
repatriation of both human and financial African Diaspora assets.
21. The Civil Society Network should continue to promote AGOA and work to mobilize the
technically skilled African Diaspora community to support AGOA-aimed initiatives.
VII. Welcome Reception
Overview
The official welcome reception of the AGOA Civil Society Session took place at the National
Council of Negro Women Headquarters and the Reception speaker was Her Excellency
Elizabeth Tankeu, Commissioner for Trade and Industry, African Union. H.E. Tankeu
extended greeting to participants from the Chairperson of the AU Commission, H.E. Professor
Alpha Oumar Konare and commended the US government for organizing the Third US – subSaharan Africa Trade and Economic Cooperation Forum, and providing the governmental,
private and civil society sectors and opportunity to work on improving the advances in
developmental and trade growth under AGOA. H.E. Tankeu also directed significant attention to
the important role of civil society in AGOA’s success: “AGOA is an important development
instrument that should be effectively strengthened for the eradication of poverty in Africa. But
this would continue to require the commitment and cooperation of all stakeholders including the
civil society. In this connection, the AU would request AGOA Civil Society Network to
intensify its efforts, to be more innovative, come up with new initiatives to overcome the
bottlenecks on trade, investment, technical cooperation and capacity building.
At the African Union and within the civil society community in Africa, there is profound
understanding that the civil society has a vital role in the implementation of AGOA. But the
civil society will require adequate resources in order to be an important catalyst in the AGOA
process. It must be sufficiently funded if it is to deliver training and technical assistance to
African governments and the private sector.
It has further been observed that the energies of the civil society could be directed at social
development, the fight against HIV/AIDS, the strengthening of trade assistance and facilitations
in Africa, the articulation and fine-tuning of AGOA conditionalities and eligibility criteria to
better reflect the specific differences in the trade and economic development needs of African
countries. The civil society can explore other possible systems of trade between the US and
Africa, including franchising in Hi-tech e-trade, and hotel and tourism industries.
26
Finally, civil society organizations could play a leading role in the monitoring and evaluation of
the AGOA program. The Conference on Security, Stability, Development and Cooperation
(CSSDCA) at the AU Commission, as the monitoring, evaluation and interface mechanism of the
AU is embarking on the organization and coordination of the African civil society in this respect.
The AU would welcome cooperation with the AGOA Civil Society Network in this regard.”
Day Two – December 9, 2003
I. WELCOME REMARKS
Overview
The second day of the AGOA Civil Society Session took place at the Heritage Foundation - a
research and educational institute whose mission is to formulate and promote public policies
based on the principles of free enterprise, limited government, individual freedom ad a strong
national defense. Edwin Feulner, Ph.D., President, The Heritage Foundation, welcomed
participants to Heritage and wished them a successful conference. He also commended
participants on their formation of a useful communiqué, which includes important suggestions
and recommendations for the growth of AGOA.
After Dr. Feulner’s warm welcome to participants,
Constance Berry Newman, Assistant Administrator for
Africa, USAID, spoke to participants about the important
work that USAID is doing with Civil Society
organizations in Africa to help Africans to take advantage
of the opportunities under AGOA. She emphasized the
substantial work on the ground that is taking place in
Africa – especially the creation of three regional hubs for
global competitiveness under the auspices of Bush’s trade
development initiative. As she noted, “The hubs have
been at the forefront of a redesigned approach to assist
African agricultural producers seeking to enter US
markets. The US Department of Agriculture and USAID have understood that there is a very
complicated process of getting food products, for example, into the United States, and to respond
to that agriculture is putting agents into these hubs in order to facilitate the implementation of
food health standards required prior to importation into the United States.”
She also gave participants some sound advice and encouragement regarding the important role of
civil society to AGOA: “[C]ivil society should continue to stay informed and track the issues of
economic empowerment, trade and investment. Civil society has a unique role to play in
encouraging African governments to create an enabling environment for local and foreign
investors… [I]nvestment is an essential component of expanded economic growth and trade…
Civil society organizations are well positioned to ensure that their governments and the private
sector practice sound management, fiscal accountability as well as transparency and integrity in
business transactions. All of these factors will contribute to a favorable investment climate and
lead to expanded capital investment and economic growth.”
27
Question and Answer
1. Shouldn't we at this point in Africa's development encourage not necessarily the skipping of
the manufacturing and agricultural stages, but given so many problems in their programs, should
Africa look towards the technology and services sector since that seems to be what's on the
horizon for most developing countries? With the technology and services sector holding such
promise, shouldn't we be encouraging African countries to look beyond just agriculture and
manufacturing and to start looking at educating the young people to help them take advantage of
the service industry?
a. Constance Berry Newman - I agree with that, but I also believe that it should not be an
either/or. Large numbers of people on the continent live in the rural areas. That's not to
say that when you live in a rural area you can't de involved in information technology
jobs, but it's much more logical that many of the people have a better chance of making a
living for themselves and their families on the land. What we need to be doing is arming
people, giving people the right tools to do that in way that they can be food secure and
can make a living. That means introducing technology. That means improving the
distribution. That means helping in the marketing. So my response to you is, you're
absolutely on point for a portion of the population. We need to be moving in several
directions, and we need to be realistic about where many of the people live and what is
likely to be the future. I don't want you to skip my generation; you were skipping my
generation in your question. I think that training young people is very important, but I
want my generation and the generation that is younger to both have an opportunity for a
better life. Some of that could very well be in some of the other fields.
2. How do we access these hubs? It's so difficult to gain access to the American embassies in
Nigeria (my country).
a. Constance Berry Newman - I hope that you're not saying that it's difficult to get in touch
with USAID in Nigeria because it's not supposed to be hard. My recommendation to you
is -- through USAID in Abuja -- you can get help in connecting to the hubs and to
information from the various agencies. That is part of their job. If you're not located
where there's a hub and you're located where there's a USAID Mission, there is access to
the hubs through the mission.
3. Come 2005, we know that tariff advantages will be made, but I think someone had informed
us yesterday that we're looking at a 12% advantage in terms of tariffs. Are there any plans in
place to assist the very few countries that are benefiting under the textiles? I think you've
mentioned to us almost $800 million dollars as what we've been able to achieve between 2000
and 2003. What is USAID doing in terms of its capacity building programs to address that? My
other question also addresses the three hubs under President Bush's initiative. Are there
programs within these hubs? And if there are not, are there plans to have programs that would
directly deal with civil society organizations? The AGOA Civil Society Network hopes that
through such programs some the information we have learned here in Mauritius will be available
and that we will be able to use this as a network to reach out at the regional level and at the
international level on AGOA.
28
a. Constance Berry Newman - These hubs are regional. The hub in Botswana is not
limited to Botswana, but is for the entire region, and I want to talk about that hub
because it was the first one and the others are a little further behind in terms of their
programming. That hub has had a series of roundtables and regional meetings on
AGOA. The word may not be getting out enough about those roundtables, but there is
an Internet site that is the hub site, which is also a way in which people communicate
with the hub to gather information, to find out what is going on and to also ask
questions about AGOA to determine where there are places for training and technical
assistance. So there is a resource and we have emphasized with those hubs that they
have a responsibility for outreach beyond the country in which they exist. I don't know
that any one of the roundtable was designed specifically for civil society. I think the
roundtables were organized around topics and then information got out to people about
it no matter what group - some might have been in civil society and some might have
been in the private sector. I do plan to take the recommendations that come out of the
dialogue here and share it with the hubs to help them frame their planning for the next
session. The first question you asked is a tougher one. It's tougher in that, yes we
share information there and some training in order to get some countries that are
eligible to benefit more and to help other countries become eligible, but some of the
barriers are not easily removed. The barriers that are regulatory in governments. When
a person that calls up and asks how they can benefit from AGOA, just to say that
barriers need to be removed from the system or that there should be a better banking
system and to remove corruption might not be overly helpful, but it might be the
answer in some instances. That's where civil society comes in because civil society
knows probably more than anyone that you may be calling what the weaknesses in the
country in which you're operating and that need to be addressed in order to have an
effective business environment. In knowing what that is then in your question - if you
share information - for example if you need to know what some of the best ways to
improve the customs system, then packages and toolkits can be shared on what customs
systems are best. In fact, the hub in Botswana is already working with Lesotho and
Swaziland to improve the customs systems there, but that's just an example. It is
complicated. I think most of us who've been working with AGOA are getting
concerned about 2005 and 2008 coming upon us and not having enough assurance that
countries are far enough ahead that they can compete equally after the AGOA period.
4. USAID has done much important work, but for rural organizations there are some problems of
being under funded – many rural farmers have problems with only being able to trade seeds and
not grown food.
a. Constance Berry Newman – Regulatory Issues are at play and that is an important issue
of food security, but unfortunately I cannot answer that question.
29
II. Tools and Methods for Conducting Research on Trade and Commerce in
Africa
Overview
Anne Gebhardt, President, Women in Entrepreneurship and Business, Namibia moderated this
panel and provided the introduction for the first speaker, Dr. Angel Batiste, Area Specialist,
Africa and Middle Eastern Division, Library of Congress. Dr. Batiste shared with participants
the rich resources available for trade research at the Library of Congress. As research is the
stepping-stone for any kind of serious business development, she showed participants the various
trade articles and magazines, business guides, market profiles, databases and information
services available on the Library of Congress website. Many of the resources for international
visitors can be accessed on the Internet. For additional information and consultations with
Africa Research experts, she encouraged participants to visit the African & Middle Eastern
Division’s website: www.loc.gov/rr/amed
Dr. Abdul Shaikh Senior International Economist
and Regional Coordinator for Africa & Middle
East, International Trade Administration, US
Department of Commerce also shared research
information on trade and investment of all kinds
that is available on the Department of Commerce’s
website, www.export.gov.
There are many
resources for businesses in Africa looking for
information on US opportunities and vice versa.
Market information, including what markets are
important, what items people are looking to buy
and effective ways to sell these items are the kind
of information listed on the site. This type of research is important in effective business
matchmaking and trade. As trade is a two way street, the more research that you do in your area
of interest, the farther you will be able to go.
Question and Answer
1. Can information from the Library of Congress be accessed from the [African]
continent through the Internet?
a. Dr. Batiste – Yes. The website which concentrates on African business is
www.loc.gov/rr/business/african.
2. How does someone go about registering his or her book with the Library of
Congress?
a. Dr. Batiste - The copyright division is the best place to find information on
registering with us.
3. Does the Library of Congress commission research projects in Africa?
30
a. Dr. Batiste - Unfortunately, we only archive material and do not do much
research.
4. Library of Congress work is important, but a lot of information out there on Africa is
outdated. What efforts are made to ensure that materials are current and portray the
true image of Africa?
a. Dr. Batiste - The Library of Congress mainly relies on information coming
from Africa with an understanding that it is accurate.
5. I've worked on some projects where at the stage when we ask the African business for
a 3-year financial report, there's a problem. What is the problem?
a. Moderator Ann Gebhardt - In most cases, African businesses are SMEs –
small businesses and work with cash. So things like bookkeeping and stock
taking that really in the African sense, doesn't take place. It's only when
we've graduated and become a formalized business and you go to the bank
and apply for funding and so on that you get that kind of status. That's
basically the problem. Most people doing business just deal with cash
informally.
6. Are there resources available for people that are looking to develop a business plan?
a. Dr. Shaikh - There are a number of places where you can find model
business plans and help.
The US Small Business Administration
(www.sba.gov) has a number of sample plans and advice, and most Schools
of business at universities also have resources available. Major firms such
as PriceWaterhouseCoopers (www.pwcglobal.com) also have tools online
to help with developing a business plan.
III. How to Monitor and Track the Impact Trade Has on Your Country
Overview
George Ayittey, President, Free Africa
Foundation moderated this panel focusing
on the best ways to stay abreast of the
success of AGOA and the evolution of
trade development. The first speaker on
this panel – Dr. Soloman Samen, Trade
Coordinator, West and Central Africa, The World Bank – spoke about the evolution of USAfrica Trade Policy and the impact of AGOA. He shared with participants his opportunity to
witness a concrete example of AGOA’s success while visiting his home country Cameroon. “I
witnessed firsthand the official ceremony for the opening of an AGOA-supported textile plant.
When I was watching the whole thing, I saw many US investors involved in that operation and
31
about 30,000 employees, and I said to myself this is amazing. AGOA is really doing something
and should definitely be expanded to create an even greater impact.” Dr. Samen also spoke
about the various ways to go about assessing the progress of international trade in Africa –
namely from a qualitative and quantitative standpoint. The benefits of AGOA have meant a
great increase in trade in a quantitative sense, but for many people the qualitative impact still
needs to be worked on and the amount of people benefiting from the trade on the ground in
Africa should be increased.
Bahati Modeste, Executive Director, SOCIO gave the next set of remarks and emphasized the
important role civil society has of ensuring that trade practices are open and honest. When civil
society tracks the integrity of trade practices, the real impact is easier to assess and fix when
there are problems. “As the economy controls both politics and social affairs, I think that a
window of opportunity has just been given to us by the US – especially through AGOA and it’s
new customs regulations and facilitating mechanisms. Once more, Civil Society must seize this
opportunity to get involved in the trade sector so as to render it more healthy, loyal and fair to the
advantage of our populations.” Vernice Guthrie, Director, American Bar Association – Africa
Law Initiative also emphasized the importance of integrity in trade practices on the ground in
Africa, especially concerning the formation of legislation that is commonly adhered to and
properly enforced in Africa. “AGOA is an important beginning but we need to be setting up
institutions and instrumentalities to support business development, economic growth and
redistribution well beyond the confines of AGOA not only in terms of time frame, but also in
perspective, so that we use it as a launching pad and use it in thinking about the longer and larger
interest… I think one of the challenges in terms of enforcement or tracking the status of law and
legislation is that if you go to West Africa, for every country there is a different legal framework
and enforcement mechanism. For folks that already find the prospect of doing business in Africa
daunting, it makes it even more of a daunting task. More important than outsiders, it creates
barriers to inter-regional and inter-country connections, commerce and transit, which is a
significant challenge and barrier. So how do we track some of those issues? Concerning issues
of enforcement and how one goes about enforcing law, we should [also] look at how to track the
enforcement of law.”
Indur M. Goklany, Author, "The Globalization of Human Well Being", CATO Institute spoke
to participants about the benefits of technological advances and globalization to human well
being in terms of the raised levels of efficacy and productivity that occur. “The well-being of the
vast majority of the world’s population has improved and continues to improve. Because of a
combination of economic growth and technological change, compared to a half century ago the
average person today lives longer and is less hungry, healthier, more educated, and more likely
to have children in a schoolroom than in the workplace. During that period, indicators of wellbeing have improved for every country group, although life expectancies have declined in many
Sub-Saharan and EEFSU countries since the late 1980s because of HIV/AIDS, malaria, or
problems related to economic deterioration.”
Question and Answer
1. (Comment) The vast majority of people in Africa are impoverished and not getting access to
the technological advances made by developed countries even when they are present within there
32
countries. A program, "Profit of Doom" highlights this disparity in receiving the benefits of
technology. It shows a case in Ghana where people have to pay to get access to clean water.
There is a parallel between this condition that exists in Africa and among African Americans
because we are all for the most part just consumers, and there is an importance that people
recognize the need to change our status from just consumers in the world to producers in the
world.
2. (Comment) If you come to Africa, you see that we don't really benefit from technology on the
ground. We're just dependent. Grassroots people are being exploited by the pricing problems
that Mr. Modeste mentioned. So in many ways technology is not being accessed by Africans
because they cannot afford it, and this is where human rights abuses – such as slavery - come in.
3. (Comment) Centers of Excellence should be developed in Africa to help level the playing field
in terms of technology.
IV. LUNCHEON REMARKS
Overview
The second days’ luncheon remarks began with an
introduction of the first speaker by Becky Norton
Dunlop, Vice President, The Heritage Foundation.
Participants were honored to have Former US Attorney
General Edwin Meese, III, Chairman, Center for Judicial
and Legal Studies, The Heritage Foundation, provide them
with luncheon remarks which focused on the importance
of the rule of law to trade and development in Africa, and
Aleta Williams, Education Advisor, Bureau for Africa,
USAID, who spoke about USAID’s work in building
capacity on the ground so that Africans are able to take greater advantage of AGOA’s benefits.
Honorable Meese’s remarks gave insight into the relationship between rule of law and
sustainable development. The institution of the rule of law – as he noted, “The key to the rule of
law and its relationship to investment is predictability. Before someone is going to risk their
money by putting it into a business or by investing in a particular country in a business, they
want to know what's going to happen to that money. They want to be able to predict what's
going to happen in terms of various criteria. Some of the principles of the rule of law that are
important are (1) Consistency - the same rules apply across the board and will apply on a
continuing basis; (2) Continuity - the fact that ten years from now or five years from now, people
will be under basically the same rules and if there are changes in rules, they are done in a way in
which people can have input as to the direction that change is going to go, so that you're not
subject to arbitrary changes in rules from one day, week or month to another. All of which is a
key to this element of predictability; and (3) Impartiality - the important requirement in a fair
economy and for the rule of law is equal application of the law. There's not one favorite group
or one favorite individual, or that the law is not going to be applied differently to one person who
comes before a court or before some other regulatory body against another, so that people can be
33
confident that they will be treated impartially.”
Ms. Williams’ address to participants gave insight into the work that USAID has been doing in
support of AGOA’s initiatives on the ground in Africa. She emphasized the importance of
education in creating environments conducive to taking the maximum advantage of AGOA’s
benefits. “When one talks of important issues such as trade or economic development and global
market economies, it is impossible not to mention the inextricable link to education. After all,
education is key to all development. It is the foundation and the main ingredient in sustaining
democracies, improving health conditions, increasing per capita income, and reducing
inequalities. The individual and social impacts of these gains are absolutely essential to a
country’s economic growth. In fact, education may be the highest yielding investment a country
can make because the knowledge and confidence generated by this investment enables
individuals and societies to be creative in developing new opportunities for economic
development as education levels rise, thus continuing a virtuous spiral that reinforces and
deepens the benefits.”
Question and Answer
1. Have you had the chance to see this framework for the rule of law actually go into effect in a
foreign country or in foreign countries?
a. Ed Meese - Yes. We’ve seen examples particularly in some of the newly emerging
democracies that came from the Soviet Union, and those in which the rule of law was made
a firm part of the new nation that grew out of that, and particular benefits for those
countries where there was the absence of corruption. The economy was much more
successful in countries like Hungary and Czechoslovakia. The rule of law was essential.
In countries where the rule of law was not as strong and where there were corrupt officials,
the economy suffered. We’ve also seen changes in countries like China. As China has
become much more of a market economy, China itself has had to move in the direction of
the rule of law. One aspect of that is in the sanctity of contracts. When I went to China,
one of the things that was happening was that American businesses did not have
confidence in the sanctity of contracts and their enforcement by the government and also
were concerned about being able to repatriate their profits. That has changed to a great
extent now, and it has been made necessary that in order for them to have a successful
economy, they’ve had to move in the direction of rule of law that I was talking about.
2. It’s getting clearer that the African countries are going to have to work closely together. If
you look at a map of the United States you see that every state has it’s own different laws which
is not helpful to African countries in terms of contracts. It seems that different states may have
to come together to create a more common approach to trade with Africa. I don’t know if
international law is conducive to taking care of the issue of contracts, but what would be a safe
way to try to get them to speak the same legal language?
a. Ed Meese - Interestingly enough we have the same problem in the US among the states.
What happened was in the early days of our country the federal government was given the
responsibility of regulating trade among the states. That was easier to do within a country
where you have states, but two things have happened that I think are more applicable to the
34
African situation. One is the development of Uniform Codes – uniform sets of laws that
we have in the United States, such as the Uniform Commercial Code. It deals particularly
with contracts and business matters. Although it’s a uniform code, it's adopted by each of
the states individually. So the development by the African nations or a group of African
nations of a uniform commercial code could take place. Then the parliament or legislative
body of each African nation could then adopt such a code, perhaps adapting some aspects
of it to particular conditions in that country, but in general following the same pattern. That
would be one very excellent way. You could do that by the country itself adopting this
code that has been drawn up by code commissioners from the various countries that have
developed a model. Another thing that has come up recently and has been extremely
successful are the free trade zones, and that’s one of the things that has changed commerce
(with Mexico, for example) dramatically. We have a North American Free Trade Zone,
and we have a Caribbean Free Trade Zone developing. There have been proposals for all
of Latin American and also the Middle East. So I think that the combination of a uniform
code and then the development by treaties of a free trade zone would be a way of solving
the problem that you’re talking about.
3. In Swaziland, there has been a collapse of the judicial system; do you have suggestions for
how to work on this?
a. Ed Meese - I think what is necessary is to have the business leaders and other leaders of
the people convince the rulers that growth and opportunity as well as a strong economy are
strongly connected to a judicial body that adheres to the rule of law and enforces it
properly. The freer a country is and the more its economy conforms to the rule of law, the
better the standard of living and the better it is in terms of the economic situation. It’s up
to the people who have positions of influence to impress upon the government the
importance of the rule of law and avoiding the kind of corruption and disobedience of law
that interferes with trade and economic development.
4. Is USAID working to engage the African Diaspora to work in your programs on the ground in
Africa because when you go to Africa you say that most of the consultants being used by USAID
are not African and once they’re done with their work, they leave.
a. Aleta Williams - I think it’s been recognized that the Brain Drain is a serious problem. I
want to address it in two ways though – in terms of Africans in the US and Africans in
Africa. First, in terms of Africans in Africa, I can speak on the work that we did with the
Education for Development and Democracy in Africa Initiative (USAID). There was a
mandate that any project we supported be African-led, and that meant that Africans were at
the table when developing programs and creating these great projects and are engages and
being heard. Under EDDI there was a concerted effort to make sure that that happened.
Another area is capacity building – in country capacity building of individuals and
institutions. We have a project in Nigeria developing six community resource centers.
These are primarily technology centers and we’re about to launch the last on in Abiakuta at
the end of January. In this project, we worked with a minority-owned company based in
the US that had been doing work in the Caribbean and had done some work in Africa. So
not only were we able to build the capacity of this company on this end, we also required
35
that in doing the work that they had to subcontract with Nigerian companies on the ground
so that they were not pulling in outside contractors but really trying to tap into existing
resources in country. In cases where there were not resources, we encouraged the company
to mentor and groom companies and individuals. All of the staff at the staff are Nigerians.
We paid careful attention to geopolitical zones to ensure that we were sensitive to those
issues as well, so I think that there are concrete examples of how we’ve tried to ensure that
we’re tapping into resources on the ground. In terms of the African Diaspora and the use
of consultants that’s a challenge – and not only in terms of Africans working but also other
minorities as well doing business in Africa. USAID has workshops where they talk about
how to do business with USAID. Under EDDI there was a bit more flexibility and I would
say that we were quite successful in broadening the network of actors and players involved
with USAID. The more that we can identify individuals and companies and are able to
shepherd them through the process will be a benefit to all of us.
b. Fred Oladeinde – I would also like to say that the African Diaspora has to work on
getting organized as well in terms of tapping into existing information and opportunities,
and we are already putting a framework in place to do that. There are a significant amount
of opportunities available, but because of a lack of understanding or lack of information,
some of these opportunities have not been taken advantage of. The kind of network that is
being put in place – namely the Western Hemisphere African Diaspora Network
(WHADN) – will empower USAID and others to engage the African Diaspora in the
efforts for engaging that community.
V. “Doing Business in America”
Overview
Manny Morales, Assistant Administrator,
Office of International Trade, US Small
Business Administration, moderated this panel
and began the session by sharing the different
way that the US Small Business
Administration encourages international trade.
SBA engages businesses in the international
arena through technical assistance, trade
promotion and financial programs. As Mr.
Morales notes, SBA works closely with its US
sister agencies such as the Trade Development Administration and the Department of Commerce
to assist in all phases of trade and business development. After giving his brief description of
SBA’s international trade efforts, he introduced the first speaker of the session, Dr. Lynette
Lashley, Chair, Communication Arts, Indiana University South Bend. Dr. Lashley spoke about
the ways in which African businesses should use public relations to not only promote their own
businesses. As she noted, while advertising and public relations may share the same end of
business promotion, the ways in which they work are much different. In advertising, a company
pays the publisher for a certain amount of space and controls the content of the space, while in
public relations a company creatively engages the media in not only promoting it’s business, but
in sharing a story that is of public interest. Public relations is an effective method of business
36
promotion as it gives businesses a certain degree of credibility in its ability to get attention by
media players, who the public often trust to have their interests at heart in the telling of their
stories. Thus, public relations is an effective way of positively promoting a business, which is
especially important in carrying out AGOA initiatives that are based on gaining foreign
investors’ confidence in African trade.
Mr. Morales also noted that public relations can be an effective way of engaging business in
trade agreements like AGOA. He noted that a public relations firm was hired by Mexican
leaders to promote NAFTA among Mexican Americans. By engaging the Latino media in the
US, Mexican leaders were able to include Mexican-Americans in the shaping of the NAFTA
agreements.
Stephanie Childs, International Projects Coordinator, Senior Advisor to the National Director,
Minority Business Development Agency, US Department of Commerce, gave the next set of
remarks, which focused on the work that the Minority Business Development is doing to
promote the engagement of US minority groups in doing business worldwide. In terms of Doing
Business in America she emphasized the importance of doing research on the market of interest
to a business, branding products from Africa so that they get the due credit of their work and
finding a distributor in the US. She admitted that doing these three things successfully is not
only a problem from across the Atlantic, but within the US. However, with initiatives such as
AGOA, many of the constraints to successful trade are being addressed, and African businesses
and civil society should continue to address the positive impact and hindrances that affect
AGOA’s success. “We really feel that no matter what the policy makers decide to do in terms of
how far they want to extend AGOA, the real promise and the real jewel is if we are able to us
this opportunity to build business to business linkages. We're not going to say that we have all
the answers, but what we're trying to do is break it down into pieces, looking at the issues and
trying to develop partnerships to facilitate the growth of business between the US minority
community and the sub-Saharan African community.”
Sam Smoots, Regional Manager-Investment and Economic Growth, Overseas Private
Investment Corporation (OPIC) gave the final set of remarks for this panel and he also
emphasized the importance of doing a good amount of research before partaking in transnational
trade. He also pointed out a number of organizations that can be used to do background checks
on potential US partners that may try and take advantage of the distance between the two
companies. Resources such as the Better Business Bureau and public records can be used to see
if potential partners have been through bankruptcy or have had other problems with conducting
business. Also, in preparing a business plan, he stressed the importance of having a focused plan
with tangible results in order to secure a loan for any endeavor (or for securing a grant from
Foundations for non-profit groups).
Question and Answer
1. Given that Africa is often hard to sell because of poverty issues on the ground there, how
should people go about doing it?
37
a. Dr. Lashley – Advertise and publicly relate grand openings and business
initiatives made. Use the positive efforts that you are making to dispel those
negative conceptions of Africa.
b. Sam Smoots - When President Clinton visited Africa, Mrs. Clinton used a phone
booth that was built by US investors, and the media covered that phone call.
Publicity such as that is great for not only promoting the business that installed
the phone, but also promoting the progress that is being made under AGOA.
2. What do we need to do to get more credit access? Do we need to lobby?
a. Stephanie Childs - The International Trade Administration is dabbling in a few
small programs that deal with credit, but we basically leave that up to EXIM and
OPIC.
b. Sam Smoots – You must understand how the system works in order to attain that
greater access to credit. Civil Society can make concrete recommendations to the
proper people and places.
3. 8 out of every 10 small businesses fail in the US, so can you address some of the things
that are going on with this problem, especially regarding the difficulty of in securing
loans from SBA?
a. Moderator Manny Morales - SBA does not give out the loans directly, the loans
are provided by the banks. Banks lend the money and we guarantee it. SBA has
lent out $18 million dollars in loans this year. Our micro lending programs also
help you in understanding how to use the money and manage fund properly.
They’re not handled by banks but by non-profits that work to help you understand
how to focus your project so that the likelihood of success is greater.
VI. How to Establish a Civil Society Network
Overview
The final session for the second day of the
conference was moderated by Vernice
Guthrie,
Director,
American
Bar
Association – Africa Law Initiative who
gave the introductory remarks for the first
speaker on the panel, Dave Peterson,
Director – Africa Program, National
Endowment for Democracy. Mr. Peterson
spoke about his experience with civil
society
networking
and
referred
participants to a number of internet
resources that are frequently used among
African Civil Society organizations interested in networking with each other - NED's website,
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www.ned.org, the World Movement for Democracy which has a link with the Africa Democracy
Forum, www.wmd.org, and that of CIPE's African Virtual Business Association Network,
www.avban.org. He noted that networks are an informal means of communication among
groups and individuals with a common agenda. The internet has greatly facilitated their
development, and they can develop organically from loose associations to more structured
bodies. As they develop, modest funding for full-time staff to maintain the communications can
be helpful. Networks can work on local, national, continental and global levels, and have the
potential to greatly magnify the power of various African efforts. Networks can be very useful
in creating pressure for common goals.
Frances B. Smith, Executive Director, Consumer Alerts spoke about the International
Consumers for Civil Society (ICCS) a subgroup of Consumer Alerts that focuses on aspects of
consumer interests such as trade. As most non-profits are policy groups and think tanks that hold
seminars and create a basis for people’s beliefs, she suggested surveying of civil society network
membership as a key way of focusing a network’s objectives. Information sharing should also
be encouraged and the coalition as a whole should take credit for the formulation of it’s reports
and studies. Network members often attend a number of different meetings on behalf of the
network to help with promotion and the development of information for sharing. Ms. Smith also
suggested that establishing credibility and trust with policy makers and with people outside of
the network is important as well as networking with other sectors outside of the civil society
network’s focus.
Colleen Dyble, Associate Director – Institute Relations, ATLAS, gave the last remarks for the
day and spoke about the importance of networks in making change. As human capital is the
greatest asset of civil society networking, “intellectual entrepreneurship” is often the business
involved in network development. “[N]etworks are fundamental in enabling civil society to have
a voice and a strong hand in taking advantage of AGOA’s opportunities. Individuals and their
ideas, like each of you sitting in this room, are the driving forces behind these networks. As you
have seen, ideas and networks can have significant impacts on free enterprise and can be
replicated across cultures and geographic borders. Most importantly, I hope that I have given you
a sense of not only the importance of the AGOA Civil Society network that was created, but how
fundamental your role is in sustaining it.
Day Three – December 10, 2003
I. CLOSING SESSION – Digital Videoconference (DVC)
Overview
The final day of the session was a Digital Videoconference (DVC) between civil society and
small business representatives in South Africa, Ghana, Miami, Florida USA and Washington,
DC USA.
Fred Oladeinde began the DVC by giving an overview of the conference deliberations thus far as
well as key points of the communiqué that were developed. DVC participants in Miami, Florida,
39
USA, Accra, Ghana and South Africa asked questions about the conference and participants in
Washington shared pertinent information that came out of the conference such as,
1. The need to extend AGOA beyond the 2005 cut off date – an initiative already in place
by through the recent introduction of AGOA III to the US House of Representative and
the US Senate.
2. The Millennium Challenge Account (MCA) – an initiative by the Bush Administration
set up to ensure that help and resources to Africa are utilized in the most efficient way.
MCA will help to see if funds can be given to governments directly. MCA is also tied
around poverty alleviation in way that will challenge governments to meet requirements
that will help create an environment conducive for better trade and the best use of the
funds. Ms. Millicent Obaso noted that MCA is a beneficial initiative because the money
will go directly to Africa, and since AGOA is not only trade and business, but also
involved health and education issues in terms of creating an enabling environment for
trade, important issues such as girls’ education, good governance and HIV/AIDS will be
addressed.
3. As civil society organizations, there is a challenge to engage in improving development –
a priority often of only the private sector and government. At a grassroots level, activity
on the African side can be further developed with civil society assistance to ensure that
countries take advantage of AGOA as best as they can.
AGOA Civil Society DVC participants also discussed the importance in firmly developing the
AGOA Civil Society Network so that key issues regarding AGOA can be addressed in an
efficient manner.
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APPENDIX A
Session Speeches and Presentations
Fred Oladeinde, President, The Foundation for Democracy in Africa
Honorable Ministers, Members of the House of Representatives, Your Excellencies, members of
the diplomatic Corps, Civil Society Organization delegates, distinguished guests, ladies and
gentlemen, Good Morning. On behalf of all the members of the AGOA Civil Society Network,
it is my pleasure to welcome you to the opening ceremony of the Second AGOA Civil Society
Session of the Third US – sub-Saharan Africa Trade and Economic Cooperation Forum.
I am Fred Oladeinde, President of the Foundation for Democracy in Africa, and US secretariat
for the AGOA Civil Society Network.
We are gathering this week to review the success, shortcomings and challenges to AGOA since
we met in Mauritius last January, and to re-dedicate ourselves and our organizations to the
mission of our network, which is to empower African and American people through their civil
society organizations, to fully take advantage of the benefits of AGOA, monitor eligibility and
compliance issues and track the impact of AGOA trade on the people of Africa and the United
States of America.
Please let me share with you some of the progress made since January 2003 when we met in
Mauritius:
I am happy to report that since our meeting in Mauritius, one additional country – the
Democratic Republic of Congo has been added to the list of AGOA eligible countries for
a total of 38 countries. Please joining me in congratulating and welcoming the new
member.
There has been significant increase in bilateral trade opportunities between the US and
sub-Saharan Africa.
Tens of thousands of AGOA-related trade and investment jobs have been created in the
Unites States and Africa.
Trade and Investment Framework Agreements (TIFAs) have been signed between the US
and Ghana, Senegal, Nigeria, South Africa, the West African Economic and Monetary
Union (WAEMU) and the Common Markets for Eastern and Southern Africa
(COMESA), and;
Last, but not least, the Free Trade Agreement negotiations between the US and five
members of the Southern African Customs Union (SACU) are already underway
However, AGOA is also faced with many challenges that must be managed properly. These
include:
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Ensuring full participation in the benefits of AGOA by all eligible countries
Participation by small businesses on both sides of the Atlantic in AGOA
The expiration of the third country fabric provision in September 2004
The phasing out of the country quotas under the WTO Agreements on Textiles and
clothing in 2005
The termination of AGOA by 2008
The need for more trade capacity building and technical assistance, particularly in the
area of agriculture for eligible African countries
We will hear during this session from members of the House of Representatives, members of the
Executive Branch and Civil Society Organizations from Africa and the US. Please let us seize
this moment and ask relevant questions that will allow us to come up with recommendations and
comments later today on how we as members of civil society can make AGOA work better.
Once again, Welcome!
May I present to you Mr. Leonard Robinson, President of the Africa Society of the National
Summit on Africa.
Mr. Robinson.
Mr. Leonard Robinson, President and CEO, Africa Society of the National Summit on
Africa
Warm greetings to distinguished speakers, sponsors and participants. On behalf of my
colleagues at The Africa Society, I wish to commend Fred Oladeinde for his leadership in taking
the initiative to organize the Second NGO Session of the Third AGOA Forum--building upon the
success and momentum of the Mauritius forum in January.
In my Considered opinion, the Africa Growth and Opportunity Act represents a watershed
initiative by the United States government and ushered in an era of unprecedented potential for
free trade access to the world’s largest and most lucrative market.
Thus far, the impact has been extraordinary--as has been well documented in terms of jobs
created, flow of non-oil African exports to America--and the resultant economic growth stimulus
to a number of countries.
But AGOA could do more to truly help revolutionize African economies! It needs to be
strengthened-extended through 2013 (instead of 2008)--and liberalized so that more apparel and
agricultural products can be exported to our markets!
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During the next two days, I urge you to reach a strong, unified consensus on various concrete
measures and recommendations to U.S. lawmakers--and to President Bush’s administration to
make AGOA stronger--and thus--the U.S. market more accessible to Africa. In doing so, the
potential for reducing poverty will be enhanced considerably. As the World Bank has stated
consistently—opening up the U.S. import market to goods from poor countries is a highly costeffective way to spur economic growth. Each percentage point in increased growth reduces the
number of people living in poverty by 2%. That ladies and gentlemen, represents real progress
we should all strive to achieve for the people of Africa! The Africa Society extends to you its
best wishes in your deliberations and conclusions.
And now, I am delighted to introduce to you a distinguished lady of incredible achievement:
Josette S. Shiner, the Deputy U.S. Trade Representative and Ambassador Zoellick’s right-hand
advisor on all world trade matters.
Ms. Shiner is a businesswoman, noted journalist/reporter and editor. Before joining USTR, she
was the managing director of STARPOINTS, a leading Wall Street technology firm that works
with fortune 500 companies. She was also President and CEO of EMPOWER AMERICA—
founded by among others, our good friend Jack Kemp. She was also the managing editor of the
Washington Times and in over 15 year in journalism has interviewed the Dalai Lama, Helmut
Kohl, Kim Jung Ill and Ronald Regan--among others!
I know from at least two conversations I’ve had--that Josette Shiner is deeply and personally
committed to U.S.-Africa relations and the power of AGOA in leading the charge.
In her closing remarks in June before Senator Grassley and the Senate Subcommittee on Finance:
--Ms. Shiner cited her family roots in Ireland, France, China and Africa as indicative of the
strength of America’s glorious diversity. The depth of her conviction and sensitivity, I feel, make
her deeply suited for the role she now plays on the global stage of trade and investment.
Ladies and Gentlemen---Ms. WHO’S WHO---Josette Shiner!
Ambassador Josette Shiner, Deputy US Trade Representative, Office of the US Trade
Representative
Thank you, Leonard, for that very kind introduction. And thanks to Fred Oladeinde and the
Foundation for Democracy in Africa for inviting me to speak today.
Once again, the AGOA Civil Society Network has developed a terrific program to advance the
African Growth and Opportunity Act and to plant – and harvest – new seeds of hope for the
continent. It’s a pleasure to address you at the opening of this year’s Civil Society AGOA
Forum.
Together, just three years ago, we planted the African Growth and Opportunity Act – a new seed
of hope for Africa. Back then, AGOA was only a vision forming in the minds of a few
determined individuals in NGOs, the U.S. government, the Congress, and African nations.
3
Howard University is an appropriate place to talk about seeds of hope. Hope is defined as a
“desire accompanied by expectation of or belief in fulfillment.” In 1866, a small group of civic
leaders active in the First Congregational Society of Washington had a vision for a theological
school that would “help uplift some of the four million recently emancipated slaves.” They
envisioned an institution of higher learning that would deliver hope and opportunity to African
Americans and people of all races for generations to come.
In the more than 130 years that followed, those seeds grew and prospered. Howard became an
internationally recognized university that trained some of our nation’s leading intellectuals and
public figures – including writers Toni Morrison and Zora Neale Hurston, Nobel Peace Prize
winner Ralph Bunche, Supreme Court Justice Thurgood Marshall and United Nations
Ambassador Andrew Young.
Those gathered today are sowers of hope in Africa. With a clear vision for a stronger and more
prosperous region, you have nurtured that hope with compassion, devotion and wise action and
by seeing the possibilities contained within AGOA.
Among those leaders are C. Payne Lucas of Africare and Mel Foote of the Constituency for
Africa – who have helped lead the charge for Africa. Many others here have played key roles,
such as Bread for the World, which has worked successfully to reduce hunger, poverty, debt and
disease in Africa since 1974. And for more than five decades, the Africa-America Institute
(AAI) have delivered learning and skills to the region by providing Africans with opportunities
to obtain advanced degrees or short-term technical training, among other things.
And many of you have championed the importance of trade to Africa’s development. As
Uganda’s President Museveni said at the time of AGOA’s birth: “You can give [African nations]
any aid that you want...even give them any lectures you have breath to give, but without trade,
there will be no growth.”
As I look at sub-Saharan Africa in late 2003, roughly three and a half years since the passage of
AGOA, I see many countries – more than ever before – that want to move beyond aiddependency, and use trade to drive economic growth, development and opportunity.
The leaders of these countries – including trailblazers like President Mogae of Botswana –
understand that sub-Saharan African economies have fallen behind and that, to catch up, their
countries need to participate more fully in the global economy.
Many of these countries – and there is perhaps no better recent example than Kenya under
President Kibaki – have undertaken difficult economic and political reforms designed to create
an atmosphere in which private sector-led growth can flourish. This is the context in which with
Bush Administration has approached U.S. trade policy toward Africa.
We share the view that the fuller integration of sub-Saharan African countries into the world
economy is crucial for their long-term economic growth and development. We have other
interests at stake, too, in Africa’s economic success, including countering poverty, spreading free
4
market values and good governance, assisting in the development of the rule of law, and creating
a sound economic base for democracy.
Challenges Facing Africa
It seems to me that there are five key challenges African countries face as they seek to grow their
economies: rule of law and property rights, investment, infrastructure, and human capacity –
including AIDS.
In recent years, African countries have taken great strides to strengthen the rule of law and to
improve governance. They also recognize – as reflected in the NEPAD Action Plan – that much
remains to be done to build effective governing institutions free of corruption and supportive of
open markets. As Peruvian economist Hernando de Soto has described, property rights are also a
key factor in economic growth, since they provide the opportunity for people – especially poor
farmers – to keep and build on the rewards of their work. This is no less true in Africa.
Since then, that seed has grown and borne fruit.
AGOA has stimulated the creation of over 190,000 new jobs in countries like Senegal,
Ghana, Malawi, Lesotho and Kenya. It is directly responsible for over $340 million in
new investment in Africa.
In the first nine months of 2003, AGOA imports to the United States were up nearly 60
percent to more than $10 billion – already exceeding the $9 billion in AGOA imports for
all of 2002.
But today, the bountiful harvest we planned is in jeopardy. Sub-Saharan Africa still faces many
old challenges – and new clouds are looming on the horizon.
The region remains isolated from growing global economic prosperity. It accounted for
only 1.4 percent of world trade in 2001, virtually unchanged from the year before.
It is plagued by slow growth and investment drought.
Over the last decade, sub-Saharan Africa's trade has grown 39 percent, while world trade
has grown 85 percent. In the same period, African GDP grew less than 8.5 percent,
compared to a global figure of more than 44 percent.
Sub-Saharan Africa represents nearly one-eighth of the world’s population. Yet the
region receives less than one percent of global foreign direct investment. Nor are local
savings being applied in sufficient quantity to help Africa grow.
And it faces significant new competitive challenges from Asia. Roughly 50,000 new
workers enter the Chinese workforce every day. That country has already emerged as a
manufacturing powerhouse that is competing with Africa for sales and investment in
textiles, apparel and other products. And the phase-out of global quotas on textiles and
clothing next year will expose region to new pressures.
5
Bringing hope to harvest in such a difficult climate will require a united effort and a renewed
commitment to sub-Saharan Africa’s success. It will mean pulling together – not pulling apart.
Based on long discredited ideas, too many seeking to help are actually fighting against a Doha
Development Agenda that would deliver increased trade and economic opportunity to secure
Africa. The truth is that no nation has ever protected itself out of poverty. Multilateral trade
negotiations are not a struggle for power that divides one hemisphere – or one worker – against
another, but a powerful engine for prosperity that benefits all WTO Members and directs us
toward a common goal.
For the sowers of hope, this is time to take a critical look at whether Africa is really best served
by blocking the exchange of goods and ideas.
More than XX percent of tariffs paid by developing countries are paid to other
developing countries. [Bill Shpiece stat.]
The World Bank estimates that abolishing all remaining barriers to trade would lift as
many as 300 million people out of poverty by 2015 and boost global income by $1.4
trillion dollars.
The protesters are split. Those marching for open agricultural markets are walking arm in arm
with rich country farmers seeking to maintain high barriers.
Sub-Saharan Africa is looking to the United States and to partners around the world to help
achieve its vision for a more stable, economically sound, and democratic region. It needs its
friends to aid in the urgent task of ensuring its full participation in the global economy.
That’s why President Bush has pledged to extend AGOA, and why Congress is working
on AGOA III legislation.
It’s why we launched free trade agreement (FTA) negotiations with the Southern African
Customs Union – our first FTA in sub-Saharan Africa.
It’s why we concluded Trade and Investment Framework Agreements (TIFAs) across the
continent – with Nigeria, Ghana, South Africa, COMESA and WAEMU. We will hold
our second TIFA meeting with WAEMU later today.
It’s why we are investing more in technical assistance and trade capacity building
programs in Africa. Since 1999, the United States has provided $345 million in overall
trade capacity building assistance to sub-Saharan Africa, including $133 million alone in
fiscal year 2003, a 26 percent increase over 2002.
It’s why you have steadfastly supported expanded trade and investment with sub-Saharan
Africa.
6
I am honored to be in the presence of so many sowers of hope and opportunity this morning.
Your efforts have made a crucial difference to the lives of many in Africa – a region where
economics is far too often a matter of simple survival.
But with the harvest in sight and obstacles in our way, we must pull together and harness our
efforts anew. Like you, we believe in Africa and hope for its future. And with the patience and
faith of farmers, we will continue to carefully prepare the ground, nourish the soil, and pray for
rain.
Thank you.
Under Secretary Alan Larson, Under Secretary of State for Economic, Business and
Agricultural Affairs, US Department of State
It is a great pleasure to join you in opening the Second AGOA Civil Society Network Session.
I am especially pleased to welcome civil society representatives who have traveled from Africa
to attend this conference, including a group of International Visitors sponsored by the
Department of State. Your presence here in Washington reflects the vital link civil society
provides between the people, the government, and the business community in shaping the
investment environment to promote prosperity for all.
Seeing all of you reminds me of my early days as a teacher in Kenya and a Foreign Service
Officer in Sierra Leone and Congo. We worked hand in glove with many of the NGOs on the
ground there, including CARE and Catholic Relief Services. It was a fruitful partnership that
led to a number of successful projects to build schools, bring safe water to villagers, and provide
improved agricultural techniques to small farmers. It also included a few late-night poker
games! During that time, I really had a sense of shared vision of a more prosperous, peaceful
Africa. It has proven to be a tough job, where successes mixed with many disappointments.
But, I am confidant that working together we can strengthen and renew our partnership to
support Africa in its journey toward a sustainable, market-based development.
“Building Trade, Expanding Investment” is our theme for this year’s AGOA Forum. By
providing Africans unprecedented access to growing U.S. markets, the African Growth and
Opportunity Act (AGOA) has had a catalytic impact, stimulating economic growth, supporting
African reforms and helping sub-Saharan Africa integrate into the global economy. Let me give
you a few examples:
Total U.S.-African trade was nearly $24 billion in 2002. U.S. merchandise exports to subSaharan Africa were just over $6 billion in 2002, greater than exports to the former Soviet
Republics and nearly twice those to Central and Eastern Europe.
Trade with AGOA eligible countries increased 10 percent in 2002 despite an overall decline in
global trade. While most U.S. imports continue to be in the energy sector, AGOA is providing
an opportunity for Africa to diversify its exports. Already in 2002, non-fuel AGOA imports
totaled $2.2 billion, with apparel imports totaling $803 million, roughly twice the amount in
2001. Transportation equipment imports (primarily cars and auto parts from South Africa) were
up 81% to $545 million.
7
Trade in non-traditional exports continues to rise, and AGOA has facilitated new investment,
both cross-border within Africa as well as investment from outside the continent. USTR
estimates that AGOA-related trade and investment has created over 190,000 jobs in Africa and
over $340 million in new investments. New investment in infrastructure, especially in southern
and eastern Africa, can lead to a gradual adoption of world-class standards for customs clearance
and port security.
While the African Growth an Opportunity Act remains a centerpiece of our economic policy
toward sub-Saharan Africa, we are also focused on the Millennium Challenge Account. Through
MCA partnerships, we will support eligible developing nations that demonstrate a strong
commitment to the proven development foundations of just governance, investment in people
through health and education, and promoting economic freedom.
This year, Congress has provided strong bipartisan support to the MCA. We have achieved
consensus on a first year appropriation of $1.0 billion, and we are optimistic that Congress will
soon approve legislation establishing the MCA so that we may begin operations.
Through the MCA, we will work with partners committed to the policies that let development
succeed. Both AGOA and MCA recognize that development assistance is a catalyst for growth,
but that free markets and domestic and foreign investment are its true engines.
NGOs are a vital link in the development chain in Africa. We admire your dedication and cando approach on the ground. We share your commitment to development, human rights,
environment, and social issues.
NGOs in Africa have great influence. I respect your courage and commitment and believe that
government’s and NGOs must deepen our partnership with African governments, and with each
other, if we are to help Africans achieve their place in the world.
Friends with influence have responsibilities. One of those responsibilities is to avoid carrying to
Africa developed country disputes. The Cancun WTO meetings represented a lost opportunity
for Africa, in terms of reduction of tariffs and trade barriers that prevent the continent from
reaching its full economic potential. I have been concerned, and I must admit, that in recent
years some NGOs have carried to Africa European positions on biotech food crops or
agricultural trade and Indian positions on pharmaceutical patents.
Now I am not arguing that the views of the U.S. government are always right. What I am
arguing is that all of us need to scrupulously avoid the temptation to speak for Africa or to bring
to that continent our disagreements that are not really at the heart of Africa’s situation. We will
not agree on every issue, but I think we do agree that our goals are the same for a more peaceful
and prosperous Africa.
We look forward to a busy and productive two days. Africa and the United States are important
to each other. President Bush has shown his commitment to Africa, by expanding assistance for
HIV/AIDS prevention, his personal involvement in getting the maximum resources for the
8
Millennium Challenge Account, as well as an extension of AGOA trade benefits. NGOs and
civil society also have a vital role to play in African development, and we need and thank you for
your commitment.
Honorable Jim McDermott, co-Chair, Congressional Africa Trade and Investment Caucus,
US House of Representatives
A noted U.S. civil rights leader once said, “I don’t know what the future may hold, but I do know
who holds the future.” I look out and see the people who hold- who are- the future of Africa.
And, I am honored to be part of your determination to turn dreams into destiny. Compared to
you, I am a newcomer at this. I visited Africa for the first time in 1961. I was moved by your
culture and people, inspired by leaders like Patrice Lumumba who spoke of self determination
and freedom, and motivated to add my voice in support of the common good.
You have come a long way. Yes, there is much left to be done, but let us recognize- and
celebrate- what you have done, helped in part by the African Growth and Opportunity Act.
AGOA itself is cause for celebration and you can take credit for uniting two political parties
often divided in this community. Democrats and Republicans, from rural and urban America,
from my home in the Pacific Northwest to the shores of New England, we stand united as a
country, as a people, behind AGOA. The foundation of AGOA is international trade, but the
vision of AGOA is freedom, opportunity and self-determination. Let’s see how it has fared so
far.
Congress passed and President Clinton signed AGOA into law in 2000, fitting that the dawn of a
new century would mark the beginning of a new recognition of the importance of sub Sahara
Africa to the US and the rest of the world.
Since passage, AGOA has helped generate more than 27 billion dollars a year in trade between
Africa and the US. That’s over half a billion dollars per week.
Those dollars created jobs, literally tens of thousands of jobs, across the entire sub Sahara Africa
region. Just in the last year, exports from AGOA eligible nations to the US increased a stunning
59 percent. At the same time, US exports to the region are up 10 percent, even during difficult
economic times here. Put simply, the record shows AGOA is good for sub Sahara Africa, good
for the global economy and good for US business. And we have only just begun. When we
passed AGOA, let’s face it, we guessed at what would be the right formula to attract investment.
That’s why the program is temporary and requires Congress to review the program and extend it
if it’s working.
People are better off today because of AGOA. More people will be better off tomorrow after we
strengthen AGOA. Now we have a track record to build on, to grow and refine AGOA to keep it
a vital part of sub-Sahara Africa growth and development. I’d like to suggest ways we can keep
AGOA strong and improve on it by detailing a few provisions that are included in a bill that I
introduced, the AGOA III Act, which is supported by leaders in the Democratic and Republican
parties in the U.S. House and the U.S. Senate. First, we need to extend and then phase out
AGOA’s third-fabric country provision, which allows the least-developed countries in Africa to
use the high quality and inexpensive fabric produced in Asia to craft African apparel products to
export to the United States.
9
We have seen firsthand how this vital provision enables Africa’s poorest countries to compete in
an apparel market that will continue to be dominated by Asian giants. Yes, the length of an
extension will be strongly debated by Congress and the Administration, but experience proves
that this is a crucial policy provision. The AGOA III Act would allow Africa’s poorest
countries to use third-country fabric through 2008. Sufficient capacity to domestically produce
quality fabric is at least four years away for most AGOA–eligible countries. This fact coupled
with the reality that global apparel production will soon consolidate down to a few countries,
such as China, India, and Pakistan, means that we need to create incentives to simply maintain
the existing apparel production in sub-Saharan Africa.
Second, American farming techniques should be shared with African farmers to help enable
them to grow and export their products to the US. The US farmer stands alone in productivity.
The AGOA III Act would promote this collaboration. Now, I cannot get up here and talk about
strengthening trade in agriculture without mentioning subsidies. To the Bush Administration,
Cotton is King. Thanks to legislation that President Bush supported and signed into law,
American taxpayers are spending nearly $1 billion each month to subsidize the U.S. cotton
industry.
As a result, the U.S. share of cotton exports grew by as much as 40 percent in recent years
because poor countries, particularly those in Africa, cannot compete when America sells cotton
for prices that are lower than the cost to produce it. America preaches fair trade. America
preaches free markets. America preaches the rule of law.
But don’t you think that America needs to practice what it preaches? I wish I had the ability to
single handedly reduce these callous subsidies that represent the policies of a by-gone era.
Although a trade bill in the Congress cannot eliminate agriculture subsidies, it can address other
barriers. The AGOA III Act would eliminate quotas and tariffs on all agriculture products that
come from AGOA-eligible countries, including tariffs on cotton, corn, cocoa, and chocolate,
commodities that Africa can successfully cultivate and export.
Furthermore, one of the biggest barriers that Africans face when they export agriculture products
is the strict American sanitary and phyto-sanitary requirements, which ensure that foreign pests
do not infest our farms.
My bill would put dozens of government experts throughout sub-Saharan Africa to help farmers
understand and adhere to the American agriculture import requirements so that African foods
may reach American tables, and the resulting profits will feed and clothe children from Mali to
Madagascar.
A critical area to address if we are to encourage new and continued investment in Africa is
infrastructure. From electricity, to roads, to telephones, it’s all important and it is all needed.
How do we pay for it? Well, one way is to recognize and encourage the continued growth and
development of Ecotourism. Sub-Sahara Africa contains some of the most remarkable natural
wonders anywhere on earth and many found nowhere else. South Africa has the third highest
biological diversity in the world, with nearly 6 percent of the world’s mammal species, 8 percent
of the world’s bird species and over 20,000 plant species. These natural wonders can be a boon
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to African economies, many of which are also blessed with the same natural advantages as South
Africa, but they have yet to translate these natural endowments into tools to create jobs. A study
of Kenya’s Amboseli National Park, a top destination for ecotourists, showed that total park net
returns amounted to $40 per hectare a year, compared to 80 cents per hectare under the most
optimistic agricultural returns.
The gorillas in Uganda’s Great Lakes region are worth nearly $90,000 a year to Uganda’s
tourism industry. Before lion hunting was outlawed in Kenya, a lion used to be worth about
$10,000 dollars after what a typical tourist spent hunting the lion and selling its skin. Today, the
same lion is estimated to be worth $575,000 over its 6-7 year lifespan to local tourism industries,
not to mention our responsibility to protect these noble creatures. South Africa’s ability to
develop a large tourist market that attracts 6 million tourists annually has also enabled it to
develop what is perhaps Africa’s most developed infrastructure.
The Great Limpopo Park is a specific example of what results from an emphasis on eco-tourism.
The park, which is currently under development and occupies land in Zimbabwe, South Africa
and Mozambique, attracted over $6 million in funds just to build infrastructure to facilitate the
movement of tourists to the park. Roads like these often can be used to transport goods to and
from local and distant markets. In addition to creating much needed jobs sub-Sahara Africa,
ecotourism parks frequently require water, energy, and phone systems to accommodate tourists
needs. These are the very same systems that will allow African economies to join the global
trading economy.
The AGOA III Act aims to facilitate this transformation by requiring the President to develop
and implement policies that assist the development of the ecotourism industry in sub-Saharan
Africa. As ecotourism grows, so will infrastructure development and trade flows. Finally, as
people committed to human life and dignity, we must continue to fight AIDS. It is a health crisis
that has dramatic economic implications in addition to the tragic human toll.
Growing a healthy economy in the region will help. In the meantime, we must fight AIDS- as
well as Tuberculosis and Malaria- by actively supporting public sector initiatives and private
sector funds. Nothing short of our total resolve will do. The U.S. tax code allows for tax
deductions when corporations donate to domestic charities, which strive to mitigate the affects of
HIV/AIDS. But the tax code does not allow the same deduction for contributions to the Global
Fund to Fight HIV/AIDS, Tuberculosis and Malaria because it is based in Switzerland.
The AGOA III Act would remedy this inequity. By allowing companies operating in AGOAeligible countries to receive a tax deduction for cash contributions to the Global Fund, we can
leverage private-sector donations into the fund, which is working in Africa to stop the spread of
AIDS and treat those who are afflicted with the disease.
It is the right thing to do and addressing AIDS leads to a healthy workforce, engaged in the
world economy.
In the Bible, Jesus tells the story of the mustard seed. The least of all seeds sown in the field.
With care it grows into the greatest of all herbs, a beautiful flowering tree, providing shade,
shelter and sustenance. I believe this is the story of sub-Sahara Africa. A story of great hope
11
that requires great care. A story of self-determination that can be seen in the eyes of children
across the region. A story of dreams and opportunity, expressed through leaders working
together to transform a dream into destiny.
Today I believe that we stand together, shoulder-to-shoulder, united by a noble vision and a
common purpose of strengthening economic ties between America and Africa. Much has been
done, but much more needs to be done. I reaffirm my commitment to use my voice, my office
and my words, in pursuit of a 21st century that provides everyone with the same opportunity for
peace, prosperity and the ability to reach their potential.
But I can’t enact AGOA III myself. I need your help. America needs your help. Africa needs
your help. A great American, Doctor Martin Luther King, Junior, said, “At the heart of all that
civilization has meant and developed is ‘community’ – the mutually cooperative and voluntary
venture of man to assume a semblance of responsibility for his brother.”
I believe that civil society ultimately will propel a strengthening of U.S-Africa trade by
supporting an extension and enhancement of AGOA, and by forcing the developed world to
reduce the obtuse agriculture subsidies that we are addicted to. I look forward to working with
you, with members of Congress, the Bush Administration, the African diplomatic corps, to
ensure that AGOA may continue to be a beacon of hope and a path to Africa’s destiny.
Thank you.
Florizelle Liser, Assistant US Trade Representative, Office of the US Trade Representative
for the Bush Administration
I am pleased to participate in the civil society forum and on such a distinguished panel. Thanks
to Fred Oladeinde and to The Foundation for Democracy in Africa for your efforts to coordinate
NGO participation in AGOA and for organizing this event as well as the Civil Society Forum in
Mauritius last January.
During my remarks I want to say a little about how far we have come on AGOA, what remains
to be done, and how we can work together to achieve common objectives under AGOA.
AGOA Successes
We know that when AGOA was being considered in 90s some in NGO community were
uncertain about whether it was a good thing. Now we can say, three and a half years into
AGOA, that by any measure it is a success. It is also true that more can be done to extend
AGOA benefits to more countries and more people. Trade under AGOA continues to soar, with
concrete results in terms of jobs and investment.
In first nine months of 2003, AGOA imports to the United States were up 59 percent, to over $10
billion, representing more than 54 percent of total U.S. imports from sub-Saharan Africa, and is
on pace to exceed $13.6 billion in AGOA imports this year. While oil remains the biggest
component of AGOA imports – and of overall US trade with Africa, are also seeing dramatic
increases in other areas:
12
–
–
–
–
Apparel up 42 percent;
Transportation equipment up 24 percent;
Agricultural products up 17 percent;
Miscellaneous manufactures up 44 percent.
Drawing on information provided by African governments themselves, we estimate that AGOA
has created over 190,000 African jobs and over $340 million in investments. Over 92 percent of
U.S. imports from AGOA-eligible countries now enter the United States duty-free, under
AGOA, GSP, or zero-duty Most Favored Nation rates. Textile and apparel sector has always
been one of the key performers under AGOA. That continues to be the case. Of the 19 countries
that have qualified for apparel benefits, 15 are now exporting apparel under AGOA. Each of
these 15 has seen dramatic increases in AGOA apparel exports this year, ranging from 24 to
2000 percent. Two – Cape Verde & Uganda – became first-time AGOA apparel exporters in
2003.
Botswana’s AGOA trade more than tripled last year, reaching $4.6 million, assisted by the
passage of AGOA II and the granting of LDC status to Botswana. AGOA has helped to expand
output, investment, and employment in Botswana.
AGOA Challenges
We are pleased with these achievements and the boost AGOA has given to our trade relationship.
But we are not resting on laurels, and know that much remains to be done to make the most of
the opportunities AGOA presents.
One challenge is broadening participation in AGOA. Of 38 eligible countries only half are
exporting a million dollars or more under AGOA and its GSP provisions. What can we do to
increase this number? There are many factors wrapped up in this. One is outreach- some
businesses in your countries just don’t know about AGOA or how they might make use of it.
We continue to work with your governments to get the word out about AGOA. We are doing
this through regional and national seminars and programs conducted by our embassies, USAID
missions, and the regional trade hubs (about which USAID Administrator Natsios will tell you
more), and groups like the Corporate Council on Africa and national chambers of commerce
have also held programs on AGOA. Please also let us know if there are additional or more
effective ways for us to work with your business community and officials to spread the word on
AGOA and help you to develop AGOA strategies.
Another challenge is product diversification. Apparel gets much of the attention but there are
thousands of other product areas in which AGOA gives you a tariff advantage. Among the other
items entering duty-free under AGOA are cut flowers; automobiles; fruits, nuts and essential
oils; canned tuna; chemicals; and iron and steel products. South Africa has been especially
successful in identifying and developing new areas of AGOA exports. In the first 9 months of
2003, South African AGOA imports totaled $1.2 billion, up 24 percent over the same period last
year. Over the past few years, South Africa has shipped over 300 different types of products
under AGOA. This is in addition to the several hundred products it ships under AGOA’s GSP
provisions. We recognize that South Africa is a special case as its economy is more diversified
than those of its neighbors. But its experience in AGOA product diversification is noteworthy.
13
We all need to think creatively about which new and existing African product areas can be
developed and marketed under AGOA. Cut roses is an example of a non-traditional product with
strong growth potential under AGOA. AGOA imports have jumped from $25,000 in all of 2001
to $760,000 in the first nine months of 2003. AGOA provided the impetus for Kenya and
Tanzania – which have long exported flowers to Europe – to enter the $190 million U.S. market
for imported roses for the first time. Hope we can replicate this success in other areas, too,
particularly in agribusiness sector.
That raises another challenge: standards, especially SPS measures. Have heard from you about
difficulties in meeting U.S. SPS standards. At last Forum announced increased technical
assistance in this area, including the posting in Africa of several SPS experts from the Animal
and Plant Health Inspection Service. Some of these experts already in the field and working with
your governments and businesses to address food safety and standards issues. Administrator
Natsios will touch on other technical assistance and trade capacity building we are undertaking
related to AGOA. We have always considered trade capacity building to be a crucial element of
AGOA. Know that you need help in addressing supply-side constraints, improving customs
procedures, and identifying and developing U.S. market opportunities. Need your input on
priority areas for AGOA-related assistance. I know all of you are also interested in how to
leverage AGOA to attract increased investment. No magic formula for success. Need to do your
homework, develop AGOA strategies, business plans, and make your case to prospective
investors. We can provide guidance and point you in right direction but you have to do the hard
work. Our office is often asked how we can promote increased U.S. private sector investment.
It is not easy, as most U.S. investors not familiar with Africa and the opportunities there. And in
some sectors – such as textiles and apparel – many U.S. companies have concentrated on
sourcing but not invested in production. Asian investors dominate in that sector. That’s the
global business model. I think that U.S. investors in other sectors, e.g. agribusiness, would be
interested in opportunities in AGOA countries and we are willing to do what we can to help
connect you with investors in this and other areas. But, again, you must do the legwork first to
ensure that you have a strong case to make.
Another challenge is the potential impact on AGOA of the coming changes in global textiles and
apparel trade. With elimination of ATC quotas in January 2005, African apparel producers will
face increased competition from major producers like China and India. I have heard from many
of you of your fears that these changes will jeopardize the AGOA apparel industry, and I don’t
want to minimize the challenge you face but believe that African producers can continue to be
competitive, but that you will have to be proactive. Keep in mind that AGOA producers will
retain a tariff advantage over their Asian competitors. Must find ways to build on that advantage
by cutting production and transport costs. Many of you now looking more closely at productionsharing – using fabric or components from one or more other AGOA countries. We also need to
consider greater vertical integration of the cotton/fabric/apparel sector. Why should African
cotton be shipped across the world only to return to the continent as fabric? Am encouraged by
the production model now in place in Namibia, where West African cotton is being turned into
fabric, which is in turn used in AGOA apparel produced for the U.S. market.
Looking to the future, the next step from a policy perspective is AGOA 3. As you may know,
AGOA 3 legislation was introduced in Congress a few weeks ago, and over the coming months,
14
we will be consulting closely with Chairman Thomas and Chairman Grassley, with the sponsors
of the AGOA 3 bills, and with the Members and staff of the key Committees as they consider
these bills. Our vision for AGOA 3 is to amend the Act in ways that would give greater
confidence to investors as well as producers and buyers of African products. One way to do this
is to fulfill President Bush’s pledge to seek the extension of AGOA beyond 2008. We want to
find an appropriate means to address the rapidly approaching expiration next year of AGOA’s
third-country fabric provision. We recognize that African textile producers are not yet in a
position to supply the needs of the AGOA apparel industry in Africa, but want to retain
incentives for investment in African textile production. I also hope that AGOA 3 can address
some of the difficult technical issues that have frustrated many of you, such as the collar and
cuffs issue. The objective is to make the regulations as simple and straightforward as possible so
that all know precisely what is allowable and what is not. Ideally, AGOA 3 can also strengthen
our ability to deliver technical assistance to countries and individuals who are eager to make the
most of AGOA’s trade benefits.
Those are some of the key areas we are focusing on with AGOA and AGOA 3. I appreciate your
continuing cooperation in implementing AGOA and making it a success, and I’m committed to
working with you to keep AGOA moving forward. I’m also eager to hear your concerns and
ideas.
Thank you.
Paul Brenton, Senior Economist, International Trade Department, The World Bank
I want to clarify the impact of AGOA in terms of the number of products that are liberalized.
What AGOA does in terms of trade and the products it affects? A key factor is that the impact
differs between its effects for the non-LDCs in Africa and the LDCs. For example, if you look at
agriculture and compare it's effects to manufacturing, you can see that there's very little impact
for the least developed countries. AGOA liberalizes trade in 26 products and there are actually
over 1800 agricultural products. For non-LDCs the impact is much greater - AGOA adds about
1/3 of all the agricultural tariff lines - so that about 626 lines. The reason is that those products
have already been liberalized under the GSP for the Least Developed Countries, but in terms of
additionality - AGOA doesn't add that much for the LDCs. There still remains a significant
number of products that have not been liberalized and AGOA countries still have to pay the full
duty, and these cover a full range of products such as meat, dairy, etc; and particularly important
- prepared foodstuff. If we're talking about moving up the value chain, these are the products
where we expect some diversification. One thing that could fuel diversification is that the
excluded products have very high duties so that the margins of preference are very large. The
average US duty on products covered by the GSP is 3 1/2%; the average duty on the additional
products which are covered by AGOA is 6.7% and; the average duty on excluded products is
over 30% - so these are really the high tariff products which are being excluded.
It's a similar story in manufacturing, but here the key distinction is between those countries that
get the apparel benefits and those which do not, and - again - those that are not eligible for
apparel - the main impact is on the non-LDCs. Only a small number of additional tariff lines are
liberalized for the LDCs, whereas for the non-LDCs a much greater impact in terms of the
number of lines that are covered. There are a significant number of lines that are excluded from
15
preferences, and the key sector there is textiles. Textiles are effectively excluded from AGOA
benefits. In manufacturing, apparel is crucial. Everything in AGOA is driven by apparel. We
find that again in manufacturing the excluded products have relatively high duties. The average
duty on GSP is 3.8%; AGOA is 6.1% but crucially on apparel there's a very large margin of
preference around 12% and; for excluded products its still quite high at 10%. So there could be
significant margins of preference and incentives for diversifying into those products
The trade impact of AGOA depends on firstly the importance of those products that are subject
to AGOA preferences in total exports. If countries are exporting products where the duty is
already zero, then there is very little impact. The key issue there is diversification. A second
issue is the utilization of preferences. If a country has a preference but it's not utilizing it, the
value of AGOA is being reduced. There is a wide range of rates of utilization across countries,
and that something that needs to be understood - why some countries are utilizing preferences
more than others. The other key issue is the margin of preferences, or to what extent the tariff
has been avoided or how high is that tariff that's been avoided, but also what are the costs
incurred to get those preferences. This relates back to the rules of origin - that firms have to
provide evidence that a product is produced domestically or that it satisfies the relevant rule to
determine the nationality of a product, but that incurs costs - documentation costs, computer
costs, etc. and those costs reduce the value of the product. So there's the issue of trying to
minimize those costs.
And finally, for those countries that are not exporting products where there's a preference, the
key issue is how to diversify into a broader range of products. The key thing i want to clarify is
that for the least developed countries that are not eligible for apparel benefits have no exports
coming into the US under AGOA. So AGOA is actually have no impact on those countries at
the moment. Of course, these are still very early days - this is as of the date of 2002. Least
developed countries that do receive apparel benefits receive a much greater proportion of exports
to the US under AGOA, and that's almost entirely because of apparel. The amount of tariff
revenue lost in comparison to preference under AGOA reveal that those countries which receive
apparel benefits accrue much more value from AGOA than those countries which do not receive
benefits. For those countries without the benefits the gain from AGOA is very small.
So the key issue is making sure all more countries have access to apparel benefits and are able to
diversify into apparel if possible. It is important to determine how to deepen and broaden
AGOA benefits, how to extend benefits to all and how to include all products and to identify
why certain countries with preferences are not properly utilizing them.
Crucial from our
perspective is the rules of origin on apparel and the special rule on time and coverage, and the
US here can set an important precedent, which we can then use to hammer at the EU to liberalize
their rules of origin because the EU rules of origin on clothing remain restrictive. They still have
the double transformation rule, which makes it very difficult for African countries to satisfy EU
rules of origin and satisfy EU preferences on clothing.
Thank you.
Supplemental PowerPoint presentation – See Appendix B
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Malik Chaka, Subcommittee on Africa, US House of Representatives
Good morning. I'm always moved when I come here to Howard University to speak on issues
relating to Africa. It's most appropriate that the NGO network meeting is being held here at
Howard University. Howard is harrowed ground. At a time when the US government did not
think that African countries would become independent in the 1920s and 1930s, there were
conference being held on this campus where the issue of independence for Africa was
deliberated on. There was a fellow from Trinidad who was a law student here and was expelled
because he demonstrated against the British ambassador - as Britain was then the colonial
empire. That gentleman's name was Malcolm Nurse and we know him today as George
Padmore who was the African Affairs advisor to Kwame Nkrumah. This is a campus where the
former president of Nigeria – Nnamdi Azikiwe - studied, and as a matter of fact when Nigeria
received it's independence Pres. Azikiwe invited William Leo Hansberry to set up a school of
African studies, African Subjects, African History, anthropology - subjects being taught on this
campus when they were not being taught on any other campus in this country. Here on this
campus is the Ralph Bunche Center, and we know that Ralphe Bunche as an under secretary of
the United Nations, but he did pioneering academic work on Africa while a faculty member here.
He went to Cameroon and to Togo, to South Africa and to Kenya, he was a specialist in what
was then known as the colonial questions. I say that just to put our presence here in some kind
of context - this is a good jumping off point - being here at Howard University.
It is also important today that we understand ho far we've come with AGOA. Some folks try to
underestimate the significance of AGOA and I think that's a great error. It took five years of
concerted action to pass the AGOA legislation. AGOA started in the House of Representatives
in Congressman McDermott's office and Mike Williams - his former chief of staff who is now in
Nigeria helping Nigerians to develop the potential that African giant. But it only became
possible because of a broad coalition that was built - a coalition that included American
businesses, us civil society, African ambassadors and the "new African Americans". The "new
African Americans" are those who came here not in the bellies of slave ships, but came here to
work and to study and have remained here. They have been forceful advocates for AGOA.
AGOA is an important development and was a hard fight. AGOA took five years to pass and
since it was passed in the year 2000, we've had AGOA II and we now have AGOA III on the
agenda. AGOA is a work in progress. Politics is too important to be left to politicians. We're
going to need civil society involved in getting AGOA III passed. Civil society includes not only
groups in Africa, but groups in the US along with small to medium sized businesses. The same
kind of coalition that was put together to pass the first AGOA legislation is going to be necessary
this time around. The issue of subsidies is going to be a difficult one - there are vested interests
that are going to be opposed to any lowering of trade barriers on certain agricultural products.
We're going to marshal resources and our forces on this key issue.
The opening shots have already been fired on this battle on subsidy. The House Africa SubCommittee that is chaired by Congressman Ed Royce (CA) has already held a hearing on
increasing Africa's agricultural trade and it was our honor to have President Toure of Mali come
and speak about what subsidies were doing to cotton farmers in the Sahara. We need to be able
to take the message out of what cotton subsidies means to American consumers. I'm paying too
much for my Dockers, and the reason I'm paying too much for my Dockers is we're not getting
17
the best possible price for the cotton, because those subsidies are in the way. It's a thorny issue,
but it's one that we're going to have to grapple with. It's important to understand that AGOA is
not a panacea; it's not a silver bullet, a be all or end all, but it is an important contribution that
can be utilized in transforming Africa's economy and can be used to help eradicate poverty in
Africa. I say to people all the time, we have this conundrum in Africa, the richest piece of real
estate on the face of the globe. If you look at what's in the subsoil - enough hydroelectric
potential to light up the continent and sell some to Europe; but African villages and large parts of
African cities are in darkness. Significant agricultural potential - they've been talking about
Sudan as a breadbasket for the Middle East for a long time. So Africa, in fact, needs
transforming and we need to understand that Civil Society has a critical role to play in that effort.
One of the things I found surprising was that when we were talking about AGOA, there were
some trade unionists in Africa that were opposed to the legislation. I didn't understand that. If I
were a trade unionist and some folks were talking about creating jobs, I would see it as an
opportunity to go in and organize my union. You can't criticize AGOA when you talk to people
who work in the BMW plants in South Africa or people who now have what is good
employment in their countries in textile industries.
What workers are now saying is, "Give me more AGOA, I like it". Civil Society also needs to
push for women's businesses. Women play an important economic role in African countries, but
their counsel isn't sought and they don't sit on the decision-making bodies. So women as a part
of civil society are going to have to speak up. Transparency advocates are also going to have to
speak up, because corruption sucks the lifeblood from African economies. Corruption takes
away school places, clean water, roads and streets from the people in Africa. Transparency is a
life and death issue in African countries and civil society in African countries is usually the most
articulate advocate for anti-corruption efforts and more transparency.
HIV/AIDS advocates in Africa - the job that they've done in getting businesses to see the
importance of tackling this issue because the HIV/AIDS pandemic is a cross cutting one that
effects all areas of the economy. One of the things that has been a significant push forward is the
role that businesses are playing. Look at what drug companies said that they weren't going to be
doing five year's ago, and what they're doing today. Look at what businesses are doing in South
Africa and the great strides they have made. The people that push for peace and conflict
resolution are also a crucial part of Civil Society. Conflict is the bane of Africa. Some of the
richest parts of the African continent - those that have the most potential are now conflict ridden
and the infrastructure is being destroyed. Let's look at the Democratic Republic of Congo,
Liberia or the no peace no war situation in a country like Cote D'Ivoire. Civil Society has to step
forward and take the ball.
As I said AGOA is not a be all or end all. One of the things that it hasn't done is it hasn't attracted
a lot of US investment. If we look at the textile sector, we see Asian companies coming in and
taking advantage of it, and I'm critical of US companies and we're pushing them to invest
particularly in those areas of the economy where they have special expertise. We don't do a lot
of textiles here; we buy most of our clothes from overseas. But something must be said and
Civil Society should definitely take this up - African capital is not being invested in Africa. If,
for example, all of the Nigerian capital that was held abroad came back to the country, you'd
have inflationary pressures because the economy would heat up. The civil society should work
18
on bringing the African capital that is abroad back home, especially in helping to take advantage
of AGOA.
Thank you.
Anthony Carroll, Vice President, Manchester Trade
The genesis of AGOA started in 1994 and I happened to be in the room of the original group of
people that got together in Congressman Jim McDermott's office and Mike Williams of that
meeting to talk about AGOA being a vehicle to include Africa in the global and I think we need
to continue to focus on Africa's integration in the global economy in myriad forms and fashions
for us to really sustain what AGOA has given us so far. On the way in here on radio, I happened
to hear that today is 50th anniversary of the arguments before the Supreme Court of Brown vs.
Board of Education. The alumnus of this great institution [Howard University], Thurgood
Marshall was the litigate in the Supreme Court and spoke with such great eloquence, and after
his presentation, he quoted the terms of a dean of the law school at the time - a distinguished
lawyer by the name of Charles Houston - and he said, "We cannot accept this victory. We must
continue. We must drive. We cannot stand still." I think in using the spirit of that terrific
invocation by Justice Marshall and Dean Houston we need to carry that momentum here into
AGOA and not rest because this is a process where things are not standing still. Other regional
agreements are moving ahead. Other bilateral agreements are moving ahead, and if we rest on
our laurels, we will quickly be enveloped by other trade negotiations as they appear elsewhere.
So we need to continue to sustain this AGOA momentum, but not just within the context of
AGOA or AGOA III, but also looking at various ways in which AGOA is affected by economic
conditions in Africa. So I'd just like to make seven points here to try and keep the agenda moving
for our other speakers, and to point out to you some observations that I've made and think we
should
focus
on
in
maintaining
AGOA's
momentum.
First of all - as Rosa mentioned - the extensions that are necessary and have been incorporated in
AGOA III. Third country fabric for a reasonable amount of time up to 2008, perhaps; as well as
the extension of AGOA program to 2015 or perhaps even on an unlimited basis. We need to look
at some of the issues pertaining to agricultural subsidies. We cannot be so naive as to expect that
the US or the European Union are going to immediately reduce their subsidies which are
equivalent to $300 billion a year right now to go away tomorrow. We have to look at measures
which give Africa an opportunity to support it's growth in agricultural exports - some sort of
equivalency measure which allows Africa to continue to support it's agricultural exports. On the
issue of the expiration of the multi-fiber agreement, we need to continue to be realistic. If we
reduce the quotas currently on the multi-fiber process to zero, we're competing with such
industrial giants as China with only a 12% advantage – I can tell you from someone who’s
worked in the African textile industry – 12% is not enough.
We have to look at ways in which we can have perhaps some mechanism that will allow via
perhaps a surge mechanism or protectant that already exists in the WTO – some measure in
which we can protect our preferences against such industrial giants as we see in China and South
Asia. Underscoring what is critical and ongoing is capacity development. Capacity building in
whether that be through development assistance or whether it be through measures that try to get
the private sector more engaged. We need to look at capacity development in trade technical
assistance – assisting African businessmen and businesswomen on such matters as agricultural
19
standards. We’ve done that through the establishment of competitive HUBS that USAID has
fostered in Africa, but we need to continue to roll out and inform the African private sector of
what’s necessary, what the standards are to export the United States. We also have to
concentrate on lacking physical infrastructure in Africa. Rosa mentioned the issue of export
infrastructure. We need to rehabilitate ports, roads and we certainly need to rehabilitate African
power infrastructure so that Africa can be an export platform. Right now, AGOA has been
limited to those countries that can offer near first world export infrastructure. Countries that
cannot meet that test have largely not benefited from AGOA. We have to be candid there and
constantly look at ways of improving infrastructure. The Millennium Challenge Account, which
is a process that’s now moving ahead in the Congress from Administration, is an effort to link up
private capital with public capital to try to look at infrastructure development and improving
ways that Africa can develop its productive infrastructure.
The issue of capital. I can’t tell you how important this is and how frequently it’s ignored or at
least not discussed at any length. Whenever I go to Africa - and its been my pleasure to go to
Africa one or two times a year to speak on AGOA largely to business and civil society audiences
– the issues that comes up as most constraining upon Africa’s economic relationship with the
West and the United States is the absence of credit and the absence of capital. We need to
continue to try to involve and articulate measures in which Africans can secure the necessary
investment and trade finance capital to be able to produce and export to the United States.
Capital is a critical ingredient to sustaining Africa’s economic relationship with the United States
and sustaining the momentum of AGOA.
We need to look at ways that in which we can mitigate the risks that US companies see in
investing in Africa. The hydrocarbon sector – oil and gas – is going to be investing $50 billion
dollars from just two companies, ExxonMobil and Chevron, in the next ten to twelve years in
Africa. We need to find way in which some of that infusion of capital can stick behind in Africa
and result in not only services and manufacturing that support the oil and gas industry, but
perhaps also in collateral areas such as fertilizer production and various thermoplastics and
materials that can be used in manufacturing and that have ingredients that come from the
hydrocarbon sector.
I think the responsibility is not only from the United States to Africa, but also from Africa to the
US, and Africans need to continue to strengthen the regional economic groupings. Intra-Africa
trade is too low. I think that South Africa has shown leadership and success in reintegrating
itself in the regional economies of Africa, but still I think that everyone at this table here would
admit that intra-Africa trade is still too small. The idea of facilitating engagement with the
regional economic organizations to try to limit and remove the barriers on intra-African trade
will increase Africa’s competitiveness not only to ship with in itself, but outside of Africa.
Other key issues include transparency - as Mr. Chaka mentioned – and also the second tier
notions of the constraints that exist in African economies on notions of business formation –
licensing, securing permits to build. These are things that need to continue to be addressed to try
to remove hindrances and accelerate progress so that businesses can really thrive in Africa and
not under operate under the constraints, which they have sometimes found.
20
Thank you.
Sharon Pauling, PVO/NGO Advisor, Bureau for Africa – USAID
Introduction
I am pleased to be able to speak with you today. Your presence here underscores the important
role of civil society in the growing trade relationship between the United States and Africa. I
thank the consortium of NGOs led by the Foundation for Democracy in Africa who have
organized this event. I commend your initiative and leadership in making this 2-day dialogue
possible.
The agenda that you have set for this meeting is very important. The voices of civil society
organizations are critical in helping to shape the future of AGOA; in working with governments
and the private sector to take maximum advantage of AGOA; and in monitoring the impact of
AGOA on US-Africa trade.
USAID’s Response to the Trade-Readiness Challenge
I’d like to focus my remarks on the unique role that USAID plays in helping to sustain AGOA’s
momentum by responding to the trade-readiness challenge and promoting sustainable
development.
IMPROVED TRADE
First, its important to point out that as a result of efforts since the enactment of the AGOA
legislation, U.S.-Africa trade has improved dramatically. In Apparel and Textiles, imports to the
United States from Africa have increased from nearly zero in 2000 to over $800 million in 2002.
Although it is not the mandate of USAID to formulate legislation, USAID’s participation in the
AGOA Forum reflects its conviction that bilateral assistance activities are a critical component
of increased international trade within and beyond Africa.
As the legislation evolves, so must the enabling environment for trade and investment.
In fact, the AGOA legislation acknowledges USAID’s role by stating that, “sustained economic
growth in Sub-Saharan Africa depends in large measure upon the development of a receptive
environment for trade and investment, and that to achieve this objective USAID should continue
to support programs which help to create this environment….”
As part of its overall development assistance program, USAID has active bilateral assistance
programs in 26 (?) countries in sub-Saharan Africa to promote social, economic and political
change in order to build a prosperous, healthy and stable Africa.
In addition to working with governments, USAID also works closely with African regional
organizations, and with civil society organizations, including NGOs, community organizations,
farmer’s groups, women’s groups, and business associations. Increasingly, we are also
partnering with the private sector to expand their investment in Africa.
Together we are addressing the continent’s most pressing challenges:
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Trade expansion and economic growth
Education
Good governance and conflict prevention
Agricultural productivity,
Environmental management and protection
HIV/AIDS and public health
USAID programs also incorporate the cross-cutting issue of gender. The economic growth
programs are designed to promote economic reforms and private sector development to help
create a supportive environment for trade and investment. Programs use a variety of policy
reform, technical assistance, training and capacity building.
In addition to this general approach to promoting broad-based economic growth, USAID has
programmed resources using a variety of frameworks.
DOHA/WTO
The Doha Development Agenda of 2002 called upon the world community for specific
commitments of technical assistance, capacity building and integrated approaches to
development.
USAID Missions respond to requests for assistance from African countries to:
Meet WTO commitments
Improve trade policy-making
Engage civil society
Revise or adopt new laws, and
Improve the institutional and physical infrastructure for trade
USAID’s TRADE CAPACITY BUILDING ACTIVITIES
USAID’s trade capacity building activities have been making a difference. (TCB Survey –
recently released)
The US Government provides more Trade Capacity Building assistance bilaterally than any other
international donor. In 2003, this amounted to a total of $752 million world-wide, of which $133
million was spent in Africa. This more than doubled the $64 million spent in Africa in 2001.
THE PRESIDENTIAL TRADE INITIATIVE
President Bush announced the Trade for African Development and Enterprise (TRADE)
Initiative at the AGOA Forum in October 2001. The central feature of the TRADE Initiative is
the creation of three Regional Hubs for Global Competitiveness: one in Botswana, one in Kenya,
and one in Ghana.
The TRADE hubs are operated by USAID’s regional Missions in Africa and are designed to
work closely with USG Washington-based agencies – including USAID, the Office of the U.S.
Trade Representative, and the Departments of Agriculture, Commerce, State, and Treasury.
Each Hub is fully operational with its own strategic plan.
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Each Hub sponsors awareness programs through workshops, roundtables, and trade delegations
to build greater understanding of AGOA regulations and to reach out to US companies. We’ve
begun to set up AGOA resource centers to provide information on AGOA legislation, and hope
to expand coverage to even more countries (in West Africa and Botswana).
We’re working with women entrepreneurs to increase business opportunities with US companies
(women’s business associations) The hubs have been at the forefront of a redesigned approach
to assist African agricultural producers seeking to enter U.S. markets.
Facilitating exports of textiles and handicrafts and other products in East and West Africa. In
one activity, the US Department of Agriculture is now stationing technical and regulatory agents
at the hubs to facilitate the implementation of food health standards required prior to importation
into the US market.
In a second ground-breaking activity, USAID is helping energize the Trans-Kalahari Corridor in
southern Africa. We anticipate that the TKC could shorten transit times for the shipments of
textiles by 10 days from Lesotho and Swaziland to the United States
USAID has helped Botswana, South Africa and Namibia adopt a common customs
administrative document that can reduce transit time at each border to no more than 3-10 minutes
per truck from 30-60 minutes previously.
AGOA related investments in Southern Africa have increased, particularly in the textile and
apparel industry. The port at Walvis Bay is being upgraded from a bi-weekly feeder route to a
weekly route directly to the US.
Hubs are helping develop tools for understanding “good” and “bad” trade and economic policies.
ATRIP
Many of you will recall the Africa Trade and Investment Policy (ATRIP) program which
preceded the TRADE Initiative. USAID began implementation of ATRIP in 1998 as a multiyear initiative to promote trade and investment policy reforms and facilitate business linkages
between U.S. and African private sectors. It funded promising projects in 31 African countries
that were aimed at either providing technical support with policy reform or supporting business
networking on the continent.
Although ATRIP preceded the enactment of the AGOA legislation, it supported projects that
helped African countries and U.S. businesses take advantage of trade and investment
opportunities between the U.S. and Africa.
Other Related Initiatives
IHEA
African Education Initiative
HIV/AIDS Relief
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An Important Role for Civil Society Organizations
In closing, I’d like to say just a little about the role of civil society organizations, particularly
since you will be spending much of today and tomorrow deliberating about ways in which you
can encourage African governments and businesses to take full advantage of AGOA.
First of all, continue to stay informed and track the issues of economic empowerment, trade and
investment.
Second, it’s important to stress the links and common elements of AGOA, NEPAD and the
MCA. While I don’t mean to introduce discussions of MCA and NEPAD, the common themes
cannot go unnoticed when considering the role of civil society. And, the three plans have
common vision and aims:
African leadership and commitment
Accountability
Good governance
Economic growth through reform
Human capacity development or investing in people
In all of these programs, civil society, in addition to providing needed social services, has a
unique role to play in encouraging African governments to create an enabling environment for
local and foreign investors.
We recognize that investment is an essential component of expanded economic growth and trade.
In view of the policies and practices that often serve as obstacles to investment, I encourage you
to consider some of the questions that investors ask and your role in assuring the right answers.
Will my investment be secure? Or will it be subject to nationalization? Is the country politically
stable?
Are the customs systems working in a fair and transparent manner? Or, will imports be held up
at ports?
Will contracts be enforced through an efficient and effective court system? Is there a well-trained
and disciplined workforce? What is the allocation of government budgets that support a healthy
and educated workforce? Is there a well-regulated and strong banking system?
Civil Society organizations are well positioned to ensure that their governments and the private
sector practice sound management, fiscal accountability, as well as transparency and integrity in
business transactions. All of these factors will contribute to a favorable investment climate and
lead to an expansion capital investment and economic growth.
As you deliberate today and tomorrow about your role as change agents, we would also
appreciate your ideas and feedback about the Trade Hubs.
What’s working?
How can we work better together?
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It is essential that we learn from each other what is required to achieve our common goal to
promote Africa’s full participation in the global economy. I trust that the outcomes of this
meeting will contribute to forward-looking strategies for expanded trade, economic growth and
social development.
Thank you.
Dr. Oumar Makalou, President, Center for Studies and Research for Democracy,
Economics and Social Development (CERDES)
Sustaining AGOA’s momentum could be analyzed as follows:
• Where do we stand?
• So far, what has been the result of AGOA?
• What Africa needs more: the Civil Society Perspective
1. WHERE DO WE STAND?
It seems necessary to outline the AGOA and underline its objectives.i Let us recall that President
CLINTON signed the AFRICAN GROWTH and OPPORTUNITY ACT (AGOA) in law on May
18, 2000 as title 1 of the Trade and Development Act of 2000.
AGOA’s main objective is to offer tangible incentives for African countries to continue their
efforts to open economies and build free markets by:
• Meeting the participation requirements through necessary reforms,
• Providing US technical assistance, financing, and market access, and
• Establishing a high-level dialogue on trade and investment.
The participation requirements are like the conditionality of the financial institutions to
encourage policy improvement by the African governments. They include, essentially, issues
related to: private property rights, basic rules of trading system, government
interference/ownership, rule of law/democracy, national treatment, intellectual property rights,
workers rights, national security.
It is important, not to confuse these participation requirements with misconceptions like: AGOA
benefits primarily the multinational companies, the participation requirements are onerous and
intrusive in African national affairs, AGOA jeopardizes the aid program to Africa, or is merely a
government–to-government trade process, textiles are the prime benefit to African producers
under AGOA, labor and environment issues are ignored, and AGOA benefits are available to
countries outside Africa. These myths have been extensively discussed and clarified. It is true
that the participation requirements mentioned above put the pressure on African governments to
take the macro economic, microeconomic and regulatory measures needed for sound reforms.
But where there is no pain there is no gain. Recent data from the World Bank, the IMF’s World
Economic Outlook, and the UNDP Human Development Report show that in Africa and
elsewhere, efforts to put the national economy in order produce high growth rate, low inflation,
improved external accounts, relative stability in exchange rate, and confidence in the economy.
The flow of capital through the Foreign Direct Investment (FDI) and the capital market (Stocks
Exchanges) are good indicators of economic performance. Anyway, vinegar unlike honey cannot
attract the bees.
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In sum the main goal of AGOA is a renewed African trading presence on the international scene
.It is a concrete way of integrating Africa into the world trade and economy. It is a challenge to
the belief that Africa is doomed to be a continent of victims and beggars. It destroys the fear or
hesitation for Africans to compete on equal foot in the global economy. Africa is endowed with
considerable human and natural resources. Once given the right conditions of environment and
equity, Africans have proven that they are capable of being “schumpeterian “ii entrepreneurs,
creative, innovative, competitive and dynamic. The case of Africans in good governance
countries and of the Diaspora is illustrative of that assertion. So Africans can do, they can make
it, they can grow if they are offered an equitable opportunity.
2. SO FAR WHAT IS THE RESULT OF AGOA?
First of all AGOA appears to be an incentive tool for reforms both in Africa and United –States.
This is the first result expected from the AGOA law and rules of implementation.iii Second the
impact of AGOA on US-AFRICA trade since 2000 can be assessed. African exports
performances to the US, the benefits from the evolution of the structure of US imports, the US
market share gained by African products, the specific case of oil and textile exports, will
successively and succinctly be examined, before the important issue of Foreign Direct
Investment.
•
AGOA AS AN INCENTITIVE TOOL FOR REFORMS.
The participation requirements give the President of the United States of America the right to
select eligible African countries to AGOA. Under these conditions and requirements 38 African
countriesiv are now eligible to AGOA preferential treatment for duty free access to the American
market. Countries can be added to the list and countries can be eliminated, as well. The risk of
elimination as a sanction allows to remain in the framework of reforms orientation, specially in
the fields of: market economy, ILO (International Labor Organization) labor standards, abolition
of child labor, respect for human rights, anticorruption policy, measures to protect intellectual
property rights, fight against fraud and illicit trade, money laundering, and terrorism.
Because they were considered as countries, which do not meet those criteria Angola, Burkina
Faso, Burundi, Equatorial Guinea, Liberia, Togo and Zimbabwe are not yet eligible to AGOA
preferential treatment. So far, Comoros, Sudan, and Somalia have not applied for AGOA.
Eligible countries have, free access to the US huge market, in particular with duty free for
products imported under the General Preferential System (GPS). In December 2000, the White
House has extended the list of duty free products imported from Africa to 1600 line items in
addition to the existing 4600 lines items under the GPS provisions. Textiles and shoes are among
the new additions. Moreover the GSP provisions, covering about one sixth of African exports to
the US in 2000, have been extended to year 2008, according to a study by the International
Monetary Fund (IMF).v Also important to mention is the introduction of AGOA II on August 6,
2002, by the US government, amending the complexity of procedures related to notably the
textiles under AGOA I (May 18, 2000). Now the African textile produced with raw material of
regional or American origin can access US market duty and quota free. A ceiling has been fixed
of 3% of US total imports, but can be moved up to 7% in the next 8 years. Let us recall that
African export of textile products represent actually less than 1% of US total imports. The gap to
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fill is still considerable. Africa needs to organize itself to meet the challenge and opportunity. We
now know that a special legal provision authorizes duty free access to US market by textile
products from Least Developing Countries (LDC), without any rule of origin, until 2004. In
December 2002, all AGOA countries were eligible to that privilege, except Mauritius and South
Africa, for the evident reason that they are not least developing countries. Besides being a tool
to induce to reforms, AGOA is an instrument to build Africa through Trade.
•
AGOA, AN INSTRUMENT TO BUILD AFRICA THROUGH TRADE?
Two years after the AGOA I legislation was signed, it is time to assess the result in the real trade
between Africa and the US. Of course the time span is too short, the mechanism is still uncertain,
procedures are too complex to be adapted and understood, briefly, the start-up process in any
human endeavor takes its toll. Nevertheless, we need to know how far how well we have moved
under AGOA. Some quantitative data, though limited but from reliable sources, may help us
determine the export performance of Africa to US market. Then it will advisable to try to know
what share of the US market has been gained by African exports under AGOA. Finally, it might
be useful to assess the content of the US-AFRICA flows of goods and services, before examining
the net financial flows deriving from the private sector transfers. We exclude, by the same token,
any allusion to public financial flows, including aid assistance.
Impact of AGOA on African exports performance to the US market has been assessed by
different sources. Data published by the United States Department of Commerce in 2003, on
imports–exports between the US and Africa in year 2000 show a decline (-15%) in the yearly
value of trade. That is not particular to Africa, but reflects the recess of the US global internal
and external demand during that period. In 2002, the main suppliers to US market remained
Nigeria, representing one third of US imports from Sub Saharan Africa, and South Africa (9%).
These countries were also the main markets for US exports to Africa.
The Organization of Economic Cooperation and Development (OECD) commercial data confirm
that result.vi But the US Department of Commerce breakdown of the duty free US imports from
Africa under AGOA, reports a 10% increase in the value in 2002, compared to 2001. This
increase related to the context of global contraction of imports from Africa proves in itself a
robust boost in the positive effects of the AGOA process. Progress seems to be even more
spectacular in 2003, on the basis of the first quarter’s data. US imports from African countries
eligible to AGOA and GSP have more than doubled in value over one year. They increased by
133% for oil and more than 30% for non-oil products, but only 2.5% for agricultural products.
In 2002, US imports in value from AGOA countries amounted to $9 billion, including $2.2
billion for non-oil products, out of a total of $17.9 billion US imports from Sub Saharan Africa.
The same official data show that 93% of the beneficiaries are 5 countries (Nigeria, South Africa,
Gabon, Lesotho and Kenya). There is also a sectoral concentration of US imports: three quarters
for oil and 9% for textiles.
Beyond the official data provided by the US Department of Commerce and OECD, there were
other sources, notably among the participants in AFRICANDO 2002 International Symposium
on Democracy, Trade, Investment and Economic Development in Africa, organized by the
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Foundation for Democracy in Africa, Miami, May 2002. Noting with interest the background
work done (which is not necessarily quantitative and quantifiable) by the Foundation for
Democracy in Africa and its Institute, the US AID (United Agency for International
Development), OPIC (Overseas Private Investment Corporation), the International Trade
Administration (ITA), the Import-Export Bank (EXIMBANK), ICD (International Cooperation
and Development), just to mention a few, it is possible to draw the conclusion that the AGOA
mechanism is moving in the right direction.
WHAT SHARE OF US MARKET WAS GAINED BY AGOA COUNTRIES?
This question is important, because it raises the fundamental problematic of access to a market in
a competitive environment. Not only the domestic providers but also the traditional markets
outside the United States of America want to know what they lose when AGOA countries
conquer part of the US market. OECD countries are the main competitors of the US in Africa.
But Asian and other emerging countries are trying also to increase the level of their exchanges
with Africa. No significant data could be found either in the US or with OECD that could
conclude that AGOA as a preferential trade agreement has increased the share of eligible African
countries in the US market, and in parallel, and “ a contrario”, reduced their share in European
Union, Japanese and other markets. The time span is too short to draw any conclusion. AGOA
started effectively in 2001, which means that only 2002 data are available for some countries.
Therefore, no figures are available indicating that the US market took part of the share of other
countries markets under AGOA mechanism. But, this geopolitical element will be there ahead of
time. So will be the problem of foreign direct investments.
WHAT IS THE IMPACT OF AGOA ON FOREIGN DIRECT INVESTMENT?
AGOA meant to use the benefits of free trade to help Africa in the process of poverty reduction
and sustainable development. With the new policy based on trade rather than aid, participant
countries are encouraged to undertake reforms to create favorable climate for investment. Private
flows of capital through the famous FDI (Foreign Direct Investment) are called for. According to
the United Nations 2002 World Investment Report, Sub-Saharan Africa received in 2001 only
1.7% of world FDI, compared to 1.8% in 2000, and 4.4% in the 1980s. Africa’s share of FDI to
developing countries is only 6%. Africa’s outflows represent nearly 38% of her GDP. In the
period 1996-2000, US FDI to Africa was $ 9.2 billion against France’s $4.4 billion, and UK $3.3
billion, which makes the US the most important net exporter of private capital to Africa before
the implementation of AGOA.
3. AFRICAN EXPECTATIONS: AGOA III AND THE CIVIL SOCIETY
PERSPECTIVE.
AGOA’s impact is not documented yet, but it is expected that AGOAIII will alleviate some of
the uncertainties attached to the full implementation of the American legislator’s will. Urgent
action is called for to:
a. Extend Africa’s preferential US market access under AGOA beyond 2008 to
2025, or at least 2015;
b. Extend beyond 2004, the provision for the least developing countries to use thirdcountry, not only US and African fabric in their duty-free garment exports to the
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US, therefore to address the phasing out of country quota under World Trade
Organization (WTO) textile and clothing agreement to guarantee market access;
c. End uncertainties about the list of AGOA eligible products like garment;
d. Encourage investment, provide technical assistance, and build institutional
capacity to enable African producers to meet international market standards, by
increasing their chance to gain a fair share of the market. Beyond oil, they will
have the opportunity to diversify their exports further into value added production
in areas of agriculture, light industry, minerals, information technologies, tourism,
services, logistics, and other resources under US tax incentives;
e. Set up partnership between the Civil Society Organizations, the Government and
the Private Sector to address issues pertaining to the concrete implementation of
AGOA provisions.
f. That is the way Africans expectations and participation requirements to
AGOA alike will be better understood and implemented, for the mutual
benefit of Africa - US friendly cooperation.
________________________
i. See Gregory Simpkins, Africando, The Foundation for Democracy in Africa Report on the Fifth Annual
International Symposium on Democracy, Trade, Investment and Economic Development in Africa, May 2002, pp
40-41)
ii. Joseph Schumpeter “ Capitalism, Socialism, and Democracy.”
iii. See AGOA site: < www.agoa.gov/index.html>
iv. They are , by 2003, the followings: Benin, Botswana, Cameroon, Cape Verde, Central African Republic, Chad,
Congo, Cote d’Ivoire, Democratic Republic of Congo, Djibouti, Eritrea, Ethiopia, Gambia ( The), Ghana, Guinea,
Guinea- Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia,
Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland,
Tanzania, Uganda, and Zambia.
v. Maroo, Aaditya, Devesh Roy,and Arvind Subramanian ,The Africa Growth and Opportunity Act and its Rules of
Origin:Generosity Indetermined?, International Monetary Fund, Washington DC, IMF Working Paper number
02/158, September 2002.
Thierry Latreille : Les relations commerciales Etats-unis / Afrique: qui beneficie reellement de l’AGOA? Afrique
contemporaine, Automne 2003.
Anthony Okonmah, Executive Director, The Foundation for Democracy in Africa
My Colleagues and Co – Conveners Civil Society organization from Sub-Sahara - Africa and the
United States, Members of the delegation from the US and the sub Saharan African countries,
Distinguished guests, Ladies and Gentlemen.
Good afternoon:
It is a great pleasure for me to moderate the Second Civil Society Session of the third AGOA
Forum in Washington DC.-where we shall address – this afternoon AGOA : Elements ,
Eligibility , Compliance and Trade Issues.
First, let me give a brief historical Perspective:
The African Growth and Opportunity Act-2000 (AGOA) was the first legislation that brought
major change in the U.S. policy towards Africa, in 40 plus years. It marked a radical break with
the past, by establishing an economic self- reliance program that now became the primary U.S.
policy toward Africa. Trade is now a central element of U.S. policy toward Africa.
AGOA eligible countries in Africa are now becoming economic partners with the United States
and this Act will also be creating trade infrastructure that will support this economic partnership.
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The legislation’s aim was to reduce poverty and disease, and promote opportunity thru trade and
Commerce in Africa. It was believed that for African countries to reduce poverty, they must
grow their economy at double-digit rates for at least 10 to 20 years. This can happen only if
African countries have the chance to sell their products and services on the U.S. market. Africa
will need $100 billion a year in investment to keep up with the growth in the rest of the world. It
will also need $6-7 billion a year to deal with the HIV-AIDS pandemic.
Let me take this opportunity to thank the U. S. Government for its commitment.
With the U.S. government, AGOA represents a very important chapter in the most recent history
of new economic cooperation between Africa and the United State of America.
With the sub-Saharan African Countries, AGOA represents a new beginning for economic and
political pluralism and freedom in Africa. We know by all measurable standards, that AGOA
has achieved a resounding success. It has spurred economic growth and is now triggering
economic reforms that are starting to strengthen the economic ties between the sub-Saharan
Africa and the United States.
Within these three years, we have witnessed increase trade and job creation in Sub Saharan
Africa and in the United States as a result of AGOA. This is just the beginning. Only few of the
eligible countries are now benefiting. More countries need to be educated in-order to benefit
from AGOA legislation.
*Several Elements have been cited in the AGOA ACT that need to be addressed:
One of the elements in the prospective legislation is the request for an extension of AGOA
beyond 2008.
Another Element includes programs to promote U.S. investment in Africa.
Other elements also include the free trade negotiations with Southern African countries
Engaging the World Trade Org. (WTO) regarding regulation on agricultural goods exported
from Africa.
Eligibility requirement were also cited as a condition of participation in the Trade process.
*AGOA seeks to use eligibility requirement to encourage policy change by African
governments. These requirement includes Private property rights, Rule based trading system,
Rule of law and democracy, Workers rights, National security, Intellectual property rights, and
Government interference / ownership.
AGOA is a trade bill and we are here today and tomorrow to talk primarily about trade with
Africa. If trade is conducted in the right way, it should bring prosperity and growth and reduce
poverty and disease both of which wracking Africa. SO Ladies and Gentlemen, IT IS
IMPORTANT FOR US TO KNOW THAT----this Civil Society Forum must serve to garner
recommendations that will be used to build linkages needed to sustain the AGOA trade program.
I will like to get everyone’s input, during this session and this will be submitted as a set of
recommendations.
I would like to report that the NGO involvement in the second AGOA - NGO Forum, provided a
great boost to the AGOA bilateral partnership between Africa and the United States. This year,
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NGO participation continued to grow, far greater than the number of NGO’s that participated in
the Mauritius forum. This is an important signal to show the commitment of the NGO’S in
keeping the AGOA momentum sustained. The collective endeavor of these NGO’S should
provide the strategic direction needed to sustain both the political and the economic development
in Africa.
Civil Society (NGO’S) participation in the AGOA–NGO Forum also symbolizes, a vital link that
will be required to promote the cooperative efforts needed to support the free market economic
system, which will be practical and relevant to the needs and conditions of development in
Africa.
Distinguished Ladies and Gentlemen; Let us begin today’s deliberations, by introducing our
speakers this afternoon, to further discuss this important topic: AGOA Element, Eligibility,
Compliance and Trade Issues.
Mary Lisa Madell, Trade Policy Analyst, Animal and Plant Health Inspection Service
(APHIS), United States Department of Agriculture
I am very grateful to the organizers for providing the opportunity to participate in this panel, for
two reasons. First, it gives me a chance to inform people about some of my agency’s regulatory
requirements that can affect agricultural trade with Africa. And second, it is a forum for us to
present some of the important capacity building efforts we are participating in.
I work for USDA’s Animal and Plant Health Inspection Service. It is our mission to promote the
health of US plant and animal resources, and to protect those resources from foreign pests and
diseases. Protecting animal and plant health from exotic pests and diseases often results in
restrictions on international trade. These restrictions are consistent with our obligations under
the WTO, but they cannot be reduced or modified through the types of trade concessions
provided under the AGOA.
AGOA reduced US import duties on a wide range of products from African countries, including
virtually all agricultural commodities. Naturally, many countries are very interested in taking
advantage of these favorable trade conditions, by tapping into the US market for new export
products. But they have learned that there are certain regulatory requirements that stand in their
way. In the case of APHIS, we must approve the entry of any new fruit or vegetable import. For
animal products, we determine import conditions based on our evaluation of the exporting
region’s disease status. Our regulations in the Code of Federal Regulations, indicate which
products are admissible from which countries or regions.
I would like to give you a brief overview of how we at APHIS evaluate requests for new imports.
It is important to keep in mind that there are a number of other US agencies who may regulate
the same products under different authorities. It is necessary to ensure that imports meet the
applicable requirements of all of these agencies.
Let’s take the case of a country that would like to export a new fruit or vegetable to the United
States, one that has not bee previously approved for import. The first step in the process is a
request from the exporting country for approval for the new product. This usually takes the form
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of a letter from the exporting country’s chief plant protection officer to our chief plant protection
officer. This letter would also include information on the pests associated with that product in
the exporting country.
This pest list is the foundation of what is called the pest risk assessment or PRA. The PRA is a
scientific evaluation of the pests of that are associated with the product, and of the likelihood that
any of these pests could enter the United States with the product, become established here and
cause damage to our plant resources. It is a very information intensive process, which requires
significant expertise in plant quarantine.
Once APHIS has evaluated the pest risk associated with a particular imported commodity, we
determine if any mitigations or risk reduction measures are necessary. It is almost always the
case that some mitigation will be necessary, although this could be limited to inspection and
certification upon export and inspection at the port of entry. Unfortunately, some pests pose a
great risk to plant health and there are no effective mitigation measures available for reducing
that risk. In those cases, trade cannot safely occur. But in most cases, there are effective
mitigations. The decision of which mitigation or combinations of mitigations should be used is
then taken based on the PRA results, and on consultation with the exporting country’s
phytosanitary authorities.
Once we have completed the PRA and have determined what mitigation measures are necessary,
APHIS has to go through the rulemaking process to change our regulations. All US agencies
follow essentially the same procedure, which is required under the Administrative Procedures
Act. Essentially, we have to prepare a proposal that publish in the Federal Register, our official
journal, so that all interested parties have an opportunity to comment on its provisions. We will
accept all comments that come in during the official comment period, which is usually 60 days.
Once we have all the comments, we are required to review and address them all. We then
prepare a final rule, which will reflect any changes that we have made based on the comments, or
explain why we have not made a change in response to a comment.
The good news is that the PRA process allows us to base our measures on science, and that the
rulemaking process ensures that our regulations are developed in a transparent and open way.
The bad news is that both take quite a bit of time. In fact, APHIS has more PRA requests than it
can really handle, so many trade partners are waiting for us to evaluate their products before they
can be exporting. Some of them have been waiting quite a long time.
This brings me to the second topic I wanted to discuss, namely some of the work that APHIS has
been engaged in recently in order to improve market access opportunities for African
horticultural products. With funding from the US Agency for International Development, USDA
has initiated a program to place pest risk assessment experts in each of the three regional trade
hubs in Africa. The PRA expert will work closely with countries in the region to gather the
necessary pest information, contribute to the PRA, and determine appropriate import conditions.
In addition, the APHIS expert will identify training needs in the area, and coordinate with USDA
and US AID to provide the needed training. The first of these advisors joined the Southern
African hub in Botswana this past June.
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In APHIS’s view, the PRA experts are an important first step, but only a first step. A successful
agricultural export sector relies on sanitary and phytosanitary infrastructure. By this I mean the
capacity to conduct surveillance for pests and diseases, to implement effective eradication or
control programs, and to conduct inspections and certify treatments. In order to APHIS to feel
confident that a new import will not threaten our animal or plant health, we need to have
confidence in the exporting country’s animal and plant health system.
The most important factor in the success of an SPS infrastructure the amount of support it
receives at home. Of course, this includes government support, such as budgetary support and
political support for a science-based regulatory regime. It also includes support from the grassroots - from the producers, the processors, and the exporters - for domestic quarantine programs,
for surveillance, and for information gathering.
I think that the message for this forum, which deals with the role of civil society organizations in
realizing the potential offered under AGOA. African producers, processors, and traders need
effective associations to promote the creation and strengthening of sanitary and phytosanitary
infrastructure. This is not only necessary to for agricultural exports, it is even more important for
improving output and contributing to food security.
We are currently working with our USDA partners and donors like US AID to find ways that
APHIS can contribute to building and strengthening the phytosanitary infrastructure in African
countries. With enough of the right support at home, African countries will be able to realize
their potential as agricultural exporters. APHIS and other parts of the US government hope to
contribute to this effort.
Donald Muncy, International Accreditation Registry (IAR)
Good afternoon ladies/gentlemen. I want to thank the organizers of this second civil society
network conference for setting it up, and, to the Executive Director of the International
Accreditation Registry (IAR), Ms. Marisol Valenzuela, who asked me to represent her and to be
here today.
In my remarks I wish to add further to what some of the panelists discussed this morning.
Specifically, to talk a bit more about governance and corruption as impediments to development
and to Africa’s inclusion in the global marketplace.
I am here today to talk about civil society organizations, such as IAR, and how they fit into the
equation of economic development in Africa. To do so, the issue is complex, and one that a
short few minutes does an injustice to solving. However, to get to a civil society discussion, I
take a bit of a circuitous route…one through democracy building.
Over the past decade there has been a profound change in Africa in terms of democratization in
which civil society has become a more dominant voice in the decision-making process of
government.
Of course, we all know that multiparty elections, stronger adherence to human rights, a more
prominent role for a more robust media, and a very gradual reduction in the levels of conflict in
33
the region, all help to shape a more stable Africa. We also know that democracy is not yet
consolidated in most, if not all, of Sub-Saharan Africa. Africans themselves recognize the
amount of work that remains ahead but civil society organizations such as FDA, IAR and
countless others, stand ready to help the transition, as does the donor community evidenced by
the AGOA and the Bush Administrations desire to continue to support the Act under AGOA III.
To get closer to our civil society discussion today, and that of Africa’s and the developed worlds
goal or vision for Africa, there needs to be on the continent a continued strong concentration on
training, capacity-building at most levels of society, resource mobilization, political
institutionalization and a reduction in conflict, and in existing levels of corruption, all of which
will continue to be a long and incremental process. African governments are doing a better job
of governing, in my opinion, but as Dr. Vivian Derryck alluded to this morning, change comes
slowly.
But, besides the need to continue to improve the quality of governance, there is the
overwhelming need to improve African economies, to raise per capita incomes, improve trade
within and outside the continent, to change the perception of pervasive non-changing corruption.
In short, to improve the economic enabling environment. This IS a critical time for Africa and
African leaders must think and act more forcefully in Africa’s economic condition is to improve
in the coming years.
As we all know, to improve Africa’s economic well being a large number of conditions must be
established. These include policy conditions that support rather than hinder economic growth,
manufacturing, trade, etc. There must be transparency and accountability between the multiple
numbers of actors to include manufacturing businessmen, government ministries, banking
systems, importers/exporters – to name a few.
Confidence and trust remains key as well in this dynamic mix. Confidence is the bedrock
underlying standards and their successful implementation. Confidence not only involves
intended results, products and services which more closely match expectations – but also faith in
the standards development process itself. Furthermore, confidence involves trust in the means to
demonstrate that those products match the requirements appearing in standards.
The link between manufacturers and the consumers can be considered civil society organizations
whose goal and purpose is to help facilitate this continuum that includes the manufacturing
process (product development as well as those individuals involved in the manufacturing
process), marketing and ultimately the consumer who purchases products based on their quality,
reputation, consistency in product, among many other factors.
So, who are these civil society organizations? One among many is IAR – The International
Accreditation Registry. We will talk more specifically about what IAR offers shortly. But, in
the arena of standards, I want to mention three other organizations but realize there are others as
well. I will mention the International Accreditation Forum (IAF), the International Auditors and
Training Certification Association (IATCA), and, lastly, the ILAC that deals with laboratory
accreditation. Briefly:
34
IAF: IAF is the World Association of Conformity Assessment Accreditation Bodies and other
bodies interested in conformity assessment. Its primary function is to develop a worldwide
program of conformity assessment that will promote the elimination of non-tariff barriers to
trade.
IATCA: This stands for the International Auditor and Training Certification Association”.
There are over 35 member organizations worldwide. These organizations are involved with one
or more of the following activities: a) accreditation of ISO Auditor courses; 2)
certification/registration of ISO auditors, and 3) the provision of training. And
ILAC: ILAC is an international cooperation between the various laboratory accreditation
schemes operated throughout the world. Founded twenty years ago, ILAC was formalized as a
cooperation in 1996 when 44 national bodies signed a MOU in Amsterdam. This MOU provides
the basis for the further development of the cooperation and the eventual establishment of a
multilateral recognization agreement between ILAC member bodies. Such an agreement will
further enhance and facilitate the international acceptance of test data, and the elimination of
technical barriers to trade.
As you can see, there are many civil society organizations out there interested in proving the
quality of products. I believe that the integration of their work along with the manufacturing
processes all the way to the consumer can ultimately result in a win/win situation.
At this point I would like to briefly mention IAR and what it does to help support the economic
development-enabling environment. The International Accreditation Registry is a non-profit
organization founded in 2001 by the American Welding Society that has been in existence since
1919. IAR primarily accredits Training Organizations and Certification Bodies in accordance
with internationally recognized guides and standards. IAR also allows individuals (auditors and
consultants) to demonstrate their competence to interested parties on the international level. IAR
provides training organizations and certification bodies the credentials they need to do business
in an increasingly international marketplace. Accreditation through IAR can significantly
increase their visibility to global business. IAR’s mission is to help organizations within both
emerging and established economies become more competitive by ensuring the adequacy of
products, services and personnel, as well as the general effectiveness of management. What are
some benefits of accreditation?
How can accreditation benefit individuals?
Quality and consistency of training services
The international recognition of training certificates
The international recognition of the certifications issues by personnel certification bodies.
How can accreditation benefit countries?
Governments can more appropriately assess the value of imports to determine tariffs
More confidence in the exports because of increase in demonstrated quality
Improvements in quality and personnel competence leads to higher productivity
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What are some of IAR’s programs? (Please note that many people here today are unfamiliar
with the terms that I am about to mention but that further information is available to help explain
the details.) IAR accredits the following courses:
ISO 9000 – Quality Management System
ISO 14001 – Environmental Management System
HACCP – Food Safety
OHSAS 18001 – Occupational Health and Safety
ISO 9001:2000 – Phased Transition Program
There are many other things that IAR does and can do such as accrediting certification bodies to
issue certificates of conformity. For those unfamiliar with this, I suggest further research by
looking at two websites: www.iso.org and, for IAR, www.IARinternational.org. These two sites
will help clear up some of your possible questions.
In summary, these and other civil society organizations play an important role supporting
economic development. Obviously it is a complex process otherwise Africa would be more
integrated in the world economy. But, as I mentioned earlier, these civil society organizations
help to foster an environment that benefits African business all the way to the consumer. The
focus at the moment is, however, on the African business community to help demonstrate that
their adherence to world standards will help them.
How do standards help African businesses – be they small or large businesses? By requiring
them to exhibit conformance to international regulations, standards, manufacturing processes,
business development practices and a myriad of other factors that impact on the product as well
as those working to development or manufacture that product for use/consumption in the world
marketplace. It provides some means to support reductions in corrupt practices by requiring
businesses to adhere to certain business practices that are auditable. It helps to facilitate
appropriate treatment of workers, particularly women, who are responsible for making products.
So, if there are just a few points to take away from this brief presentation, it would be that
standards can help business be more successful, to help make your business more competitive in
the world market-place, add in business credibility, and, help improve overall business practices
from the manufacturing level to business management practices.
Thank you.
Carrie Walczak, Country Manager for East and Southern Africa, US Trade and
Development Agency (USTDA)
Good Afternoon. Thank you for having me here today—it’s the first chance I’ve had to
participate in the civil society forum, and given my background in micro-level development, I
am very pleased to have the opportunity.
This workshop also poses a bit of a challenge, given that USTDA, the U.S. Trade and
Development Agency, is a program agency. Our primary work is to provide grant funding for
feasibility studies and technical assistance to help with the implementation of large-scale
infrastructure projects in developing countries. Therefore, we have little to do with compliance
36
specifically, but have been active in promoting AGOA. I will divert a bit then from the topic to
explain how our agency works and our approach to supporting AGOA through our work.
I expect that many of the participants of this forum would not be entirely familiar with USTDA.
This is because part of our job is to link the U.S. private sector to investment in Africa, which
means we normally have few opportunities to interact with the NGO community.
More specifically, the Agency has a two-fold mandate, clearly spelled out in our name: Trade
and Development. Any project we fund must be a development priority for the host country and
should have some potential for the supply of U.S. products or services. I stress there the
potential for U.S. exports: Our feasibility and technical assistance funding is not tied aid.
The Agency has several tools that it uses to promote this mandate. The majority of our funding
goes toward feasibility study funding for large-scale infrastructure projects. When I speak of
large-scale, the projects that the Agency is usually looking for cost at least $10 million for
implementation.
Such projects include airport upgrades, rail and port infrastructure
development, telecommunications and energy projects, and manufacturing, for example.
The way that the Agency assists host countries is to provide grant funding to a host country
entity (either private or public sector) to pay for the services of the U.S. company of its choice to
carry out the feasibility study. The host country entity has total ownership over the project; they
oversee its implementation. When the host country entity agrees that work has been completed,
they alert USTDA to the fact, and USTDA pays the U.S. company directly for its work.
Good Points about USTDA assistance include that it minimizes risk for all parties involved and
it assists host countries in attracting capital to large-scale priority infrastructure projects by, for
example, the private sector, the World Bank, the IFC, etc.
Other tools we have:
-Technical Assistance: (which can be leveraged to support compliance with AGOA)
-Orientation Visits
-Conferences
-Training Grants
USTDA is a demand-driven agency, so we are looking to hear from the local-level what is
needed, and we can react to that. The same is true for our involvement in AGOA. We do not
have a set program for AGOA, but we act upon request from host country entities about what is
needed.
One of the areas that we’ve probably put the most funding into, again by demand, is
transportation. Let me give you an example of why.
One of the projects I had the honor to organize and partake in recently was an Orientation, or
Reverse Trade Mission, that USTDA sponsored to promote AGOA. The OV brought a
delegation of 12 Ethiopian textile and apparel manufacturers to the United States, led by State
37
Minister of Trade and Industry Tadesse Haile, to learn about new methods of manufacturing and
supply chain management particular to this industry.
There are many reasons why Ethiopian manufacturers are having a difficult time benefiting from
AGOA, but the one I will focus on is transportation and its relation to the greater supply chain
implications this sector has.
What we learned on this OV through a recent study by the Kellwood Corporation (which I’ve
passed out to you) found that it takes countries in Sub-Saharan Africa 22 weeks in total to make
fabric, get the fabric to the factory, manufacture the final product, and to ship the product to a
U.S. port. China, on the other hand, takes only 15 weeks. Somehow, African countries need to
make up for 7 weeks of a time difference to be competitive--they currently have the longest
supply chain time length in the world.
It is for this reason that it is important to prioritize transportation and transportation security
projects when focusing on AGOA. Sometimes these projects are seen as capital-intensive when
this capital is needed for much more basic needs. However, some sort of balance needs to be
achieved in Africa where transportation logistics continue to hinder many of the countries’
abilities to diversify their export markets and enhance competition.
Some of the projects we’ve funded to support transportation enhancement endeavors include:
Walvis Bay Airport in Namibia
Sal International Airport in Cape Verde
Entebbe Airport in Uganda.
Zambia Chipata (with Customs facilitation)
Namibia TransKalahari
South Africa IFRL
Africa Regional Air Cargo Initiative
Transportation is one part of the supply chain that USTDA has focused on. In this week’s
government-to-government forum, we are leading a workshop on bringing transportation
security into the AGOA framework and in February 2004, we will host an Africa/Middle East
Regional Transportation Security Forum in Cairo. This is because transportation security is
becoming of key importance to supply chain expediency, as I’m sure my colleague at CBP will
talk about.
I hope that this short presentation provides you with one more perspective of how government
agencies are approaching the promotion and sustainability of AGOA initiatives. Thank you.
Millicent Obaso, Deputy Director, Adventures in Health Education & Agricultural
Development, Inc. (AHEAD)/Kenya Diaspora Network
Introduction
HIV infection is now a leading cause of deaths in sub Saharan Africa. Approximately 42 million
people are infected with HIV/AIDS world wide and 26 million of those infected are workers
aged 15-49 years. Over twenty-nine million of the forty-two million people in the world who are
HIV positive live in Africa. Therefore most of the workers infected are in Africa. Young people
38
who should replace the workforce already infected with HIV are also getting HIV infection. Ten
million young people aged 15-24 and almost thee million children under15 years of age are
living with in HIV/AIDS. Every second, a young person between 15-24 years is infected with the
HIV virus. HIV/AIDS prevalence worldwide is 1.07% and the average for Sub-Saharan Africa is
7.5%. Variations within the continent are huge. For example in South Africa the prevalence is
35%, Zimbabwe 25%, Kenya is 14% which is still very high and we should not be complacent.
AIDS has caused the death of 21.8 million people worldwide and 70% of them are in Sub
Saharan Africa. Since the onset of the epidemic it is estimated that 3.8 million children have died
from HIV and currently 1.3 million are living with the illness. The very high prevalence of HIV
among antenatal mothers in the region exposes many children to HIV infection. It is estimated
that there are approximately half a million HIV infected children born each year in the region of
sub Saharan Africa. Children orphaned due to AIDS are estimated to be twelve million and this
figure is expected to increase to 25 million by the year 2010.HIV/AIDS is the most serious threat
to social and economic progress of our African countries. HIV/AIDS threatens the livelihood of
many workers and those who depend on them including families, communities and enterprises.
Economic Impact
AIDS has reduced economic growth rate of many countries in Africa. By the year 2010 AIDS
will reduce growth rate (GDP) of South Africa by 17%. Botswana’s wealth from the diamond
mines places the country as the highest GDP country in Africa. AIDS will reduce Botswana’s
income of the poorest household by 13%. Its Government budget will also be slashed by 20% by
the year 2010.
Impact of HIV/AIDS on Trade and Businesses
Employers or self-employed are experiencing productivity loss and income loss as many
employees become sick and less productive while others die. Those who are not sick may be
grieving loss of relatives and friends and often are left with huge medical bills, a huge burden of
caring for orphans left behind. They become worried well with social, psychological and
economic burden that could affect their performance at work and in business.
AIDS cuts supply of labour and reduces income for many workers as young people get infection
and eventually die. Remaining workforce is younger and less experienced, and productivity is
falling in enterprises, agriculture, businesses and labour costs are rising. Investments are being
undermined and tax revenue cut just as countries face more pressure on public services. Double
burden for women and African families as they have to earn livelihood and provide care to
family income and neighbours. At family level, poverty becomes worse as relatives incur
significant costs on account of their sick and dead relatives and survivors are left in the worst
state of poverty.
Children left behind are then distributed to surviving relatives often grandparents. The children
are dependants and the grandparents are also dependants. Who will take care of the dependants
in a continent where taking life insurance cover has never been a practice? The insurance is the
employed child who sends money home every month. When she or he dies there is no family
income protection.
39
Cost to the Employers is huge, as some of them provide healthy care or health insurance to the
employees only or employees and their dependants. Many employers provide coffins and
transport to take the body to the village when their employees die. In addition they pay pension
fund. These costs are colossal.
Studies have shown that investing in HIV/AIDS prevention at the workplace is saving the
employers manifold what they would spend in caring for the sick and sharing into the funeral
costs. By not preventing HIV/AIDS now, they spend a fortune later in medical bills, loss of
productivity, pension fund and funeral costs
Ladies and gentlemen HIV/AIDS is an issue at the work place and a threat to the business
community, investments and economic growth. For AGOA to succeed HIV/AIDS issue has to be
addressed. We know it can be done because Uganda did it. Senegal is on the way to fully
containing further spread.
ILO in consultation with the Governments, Employers and Work Constituency has developed
code of practice to help address the issue of HIV/AIDS in the work place. Principles to guide
implementation of the code of practice have also been developed and include:
Recognition of HIV/AIDS as a work place issue
Since most of the infected are working population, workplace can play a significant role in
limiting the spread
Non-Discrimination or stigmatization
Workers should not be discriminated against on the basis of perceived or real HIV/AIDS status
Conditions of Descent work and Social Protection
Employees with HIV/AIDS have to be engaged appropriately according to state of health and
capability of workers. It is encouraged that they are allowed to work for as long as their health
can allow. This helps them to enjoy high quality life, be productive and provide for their families
a little longer and also be there to parent their children longer.
Confidentiality
Access to data on HIV/AIDS status of employees should be bound by rules of confidentiality
consistent with existing ILO codes of practice.
Continuing the employment relationship
HIV/AIDS is not a cause for termination of employment. Persons with HIV/AIDS related
illnesses should be able to work as long as they are medically fit. They should be given tasks
according to the level of their health condition.
Prevention of HIV/AIDS at the work place
The employers, the government and the worker should promote prevention efforts through
information education and communication and support changes in attitude and behaviour
Care and support
40
Solidarity, care and support should guide response and all workers should be entitled to
affordable health services and benefits to statutory and occupational schemes.
Gender Equity
More equal gender relations at the work place and empowerment of women are vital to
successful preventing the spread of AIDS
Social Dialogue
Co-operation and trust between employers, workers and the government to work collaboratively
Screening for purposes of employment
Individuals should not be screened as a condition for employment
The Code of Practice provides a base for developing HIV/AIDS policy at the work place. The
policy helps to institutionalize employer’s commitment on how far they will go in addressing
HIV/AIDS at the work place. For example what support will an employer provide to a sick
employee? What services will be provide? (i.e. counseling, treatment, education) For how long
will a sick employee continue working and what type of job will be given to him or her as his
health condition deteriorates? Is the employer going to allow staff to conduct peer education
during working hours? Are we going to start prevention programs to protect our employees from
infection? Is the employer going to invest in HIV/AIDS program at the work place? What
amount of resources is the employer prepared to invest in HIV/AIDS programs at the work
place? The employers should develop these policies to guide them. Among the employers,
International Federation of Red Cross has a policy on HIV AIDS and what the federation will do
to help their employees. Kenya Red Cross has a policy too and is currently working with
employers in Kenya to develop company policies. Many companies in Swaziland have policies.
Each country has its own labour laws that specify how employees are going to be treated. To
what extent are HIV/AIDS issues included in the labour laws? Namibia, South Africa and
Zimbabwe have come up with laws and policies in the workplace. What about the rest of Africa?
Compliance
Compliance is a major issue in Africa. Although the code of practice has been developed, it has
not been implemented by many business owners and employers. Just to give a few examples:
Many people are still being tested for HIV/AIDS before they are employed
Many of us can name at least one person who lost his job because he was HIV/AIDS positive.
Transferring HIV/AIDS positive people to the field where they are far away from the HQ staff
and the managers is a common practice in many work places in Africa. The employees will
therefore not open up and talk to anyone about their situation and therefore cannot be helped.
Confidentiality is not adhered to, when an employee tests positive, within days it has leaked to
the other staff and sometimes to his family and relatives as well.
Stigma and discrimination against people with HIV/AIDS or who show symptoms of AIDS are
often isolated by their fellow employees, and employers. Some of them are transferred, or fired.
Discrimination causes fear among employees with AIDS and they do not come foreword for
41
help, thus the virus continues to circulate. Solidarity and care cannot are not complied to because
people are hiding their HIV/AIDS status and health condition
How often are meetings held between Government officials and the employers to evaluate
compliance issues? Sure they discuss taxes and investments more than they talk about AIDS.
The fact that many employers and businesses do not have HIV/AIDS policies undermines their
interest and wish to do common good because they do not know where and how to begin. This is
particularly true given the fact that HIV/AIDS is not their niche
What is being done?
The good news is that there is a lot that has been done with positive results. Uganda is an
example where Federation of Employers and ILO assisted individual employers to develop AIDS
policies in the work place. Similar programs have been initiated in Zimbabwe, Swaziland and
Kenya. In Kenya, several companies have policies such as Kenya Red Cross. Based on their own
policy, they are now working with other employers to develop their own policies on HIV/AIDS.
International Federation of Red Cross has HIV/AIDS policy for its employees worldwide.
Other examples include Namibia, South Africa and Zimbabwe that have documented National
labour laws and policies for AIDS in the work place.
However, where policies exist, there have been some challenges in implementation:
Interpretation of the policies by staff and employees has been a challenge.
Employees hiding their HIV/AIDS status due to fear of stigmatization and even losing their jobs
has contributed to missed opportunities in implementing the policies. While companies and
businesses may commit in terms of putting policies in place, HIV/AIDS programming is not
their niche therefore the policies are likely to remain in the shelves.
The spokes persons for the employees are often the Trade Unions and various work place
committees. The trade Unions have not been in the forefront of HIV/AIDS in the workplace
Lack of confidentiality in handling HIV/AIDS status and results.
Next Steps
I challenge all of us in AGOA who are gathered here in this meeting to commit before the end of
this meeting, what we will do to play a greater role with regard to AIDS in the work, business
and investment world. Many donors have given HIV/AIDS in the workplace a priority including
United States Government and USAID, UN through ILO and UNAIDS, International Federation
of Red Cross and The World Bank. The Ball is in our court as Business Leaders, Heads of States
and Ministers of Africa to take advantage of the donor support and all the tools developed by
ILO. Let us make a commitment and follow with a strategy how we can use your sons and
daughters here in the Diaspora, the Africa Foundation for Democracy to work with you, the
Federation of employers, Chambers of Commerce, the trade Unions to aggressively work with
employers and employees in partnership to:
Ensure the Code of practice is utilized to develop HIV/AIDS policies in the work world
42
Ensure the policies are understood by all the stake holders especially work world management
and leadership, governments, trade unions and employers umbrella organizations who will
facilitate their implementation.
Ensure work world training departments, Human Resources and health departments are prepared
to utilize ILO Training manuals
In collaboration with all the stakeholders in the work world including AGOA, the donors, the
Diaspora organization, The Foundation for Democracy in Africa let us commit and follow with
a strategy that goes beyond just the work place how we will address the following:
HIV/AIDS and its impact at the work place
HIV/AIDS and Human Rights
Workplace action through social dialogue: the role of employers, workers and their organizations
Legal and policy Framework
Gender Discrimination
Work Programs for Prevention of HIV/AIDS
Care and Support
If we fail to do this now we will pay heavily later as the environment for trade and investment is
being destroyed by AIDS. If 42 million infected by AIDS are in the work world, how many
orphans are they leaving behind? as the many orphans in Africa are not taken care of and given
education, the world will end up with a whole generation that is so vulnerable that even terrorists
might recruit them, drug dealers may use them, and thieves work with them in their country and
internationally. Children and young people who feel hopeless in a continent threatened with
diseases, death and poverty are great security risk during our time and are worse than New York
during September Eleventh. AIDS is a problem with global implications that requires global
response of which AGOA is a part, let us take action and provide leadership
REFERENCES
1. Conveying Concerns: Media coverage of Women and HIV/AIDS by
Population
Reference Bureau, (Measure Communication)
Discussion Papers on HIV/AIDS Care and Support: Responding to the Needs of Children
orphaned by HIV/AIDS (prepared by Susan hunter and John Williamson Discussion Paper
Number 7, June 1998) Heath Technical Services Project Supported by USAID
Discussion papers on HIV/AIDS Care and Support: Human Rights and HIV/AIDS, Discussion
Paper No 2, June 1998 (prepared by Zita Lazzatini). Health Technical Services Project supported
by USAID
AIDS Wastes Africa by Marcus Mabry: Women may hold the key to halting, or at
Appropriate health resources and technology Action Group; 1996, Russell Press
Government of Kenya, Statistical Abstract, 1996, Central Bureau of Statistics, Office of the
Vice-President and Ministry of Planning and National Development, Nairobi.
Governments of Kenya, Ministry of health Seasonal paper No 4 of 1997 on AIDS in Kenya,
1997, Government printers Nairobi.
The nation September 23, 2003: elderly carry the burden of HIV/AIDS
Family Planning Private Sector (2001) the Burden of Care and Support on Grand parents for
HIV/AIDS Orphans in Selected Areas of Kenya
43
Government of Kenya, 2000. Kenya National HIV/AIDS Strategies Plan 2000-2005.National
AIDS Control Council Office of the President
When parents Die of AIDS; The Children of Kagera, Tanzania by Novartis Foundation for
Sustainable Development (NFSD) Files, 2003, www.novartisfoundation.com
RIGHTS-KENYA: One Million AIDS Orphans Lack Adequate Help, by Inter Press Service
Washington, June 25, 2001
AIDS Orphans in Tanzania Norvatis.comhome,2003,http://www.norvatis.com
Tanzania: One Million AIDS orphans by 2000, by Integrated Regional Information Network,
June 17, 1999
Uganda AIDS Commission
Plans for the future on HIV/AIDS - AIDS Information Center
List of NGOs - Ministry of Gender, Labor & Social Development
Uganda
Orphans attending school (the report we run-off for you) Ministry
of
Education and Sports, Year2002 Abstract
The AIDS Support Organization (TASO) of Uganda reports.
ILO AIDS Program
ACRONYMS
AHEAD
Adventures in Health, Education and Development
CCBI
Community Capacity Building Initiative
CBO
Community Based Organization
FPPS
Family Planning Private Sector
HIV/AIDS
Human Immuno Deficiency Virus/Acquired Immuno Deficiency Syndrome
NGO
Non Governmental Organization
PA
Program Acceleration
PAF
Program Acceleration Funds
STD
Sexually Transmitted Disease
SWAAT
Society for Women And AIDS Tanzania
TRCS
Tanzania Red Cross Society
UAC
Uganda AIDS Commission
UN
United Nations
UNAIDS
United Nations AIDS Foundation
UNTWG
Technical Working Group (UNTWG)
USA
United States of America
WHO
World Health Organization
Elizabeth Tankeu, Commissioner for Trade and Industry, African Union
Making AGOA More Responsive to Africa’s Development Needs
Distinguished ladies and gentlemen allow me first to state that Africa warmly welcomes the
Third US – sub-Saharan Africa Trade and Economic Cooperation Forum which is a follow-up to
the last one that was convened at Port Louis, Mauritius in January 13, 2003. I would like to
reiterate that the African Union (AU) attaches considerable importance to AGOA because of its
relevance to Africa’s development. I bring you warm greetings from the Chairperson of the
44
Commission of the African Union, H.E. Professor Alpha Oumar Konare who himself has high
expectations on the contributions of AGOA to the alleviation of poverty in Africa. Also, I must
add that in my capacity as the Commissioner for Trade and Industry, I am personally delighted to
be here because of my high conviction that AGOA has a lot to offer for economic growth and
sustainable development of Africa.
The AU warmly commends the efforts of the US government for hosting this meeting. We
equally welcome the participants from the private sector and civil society. The US government
has undertaken to host this meeting despite its major preoccupation with critical issues
elsewhere. Africa sees this as a strong commitment to AGOA and of the understanding of the
urgent need to support development in Africa. Above all, the AU welcomes and appreciates the
efforts of the AGOA Civil Society Network for sensitizing the American community to the
potential mutual benefits of AGOA for the US and Africa.
It was noted at the last AGOA Forum in Port Louis, Mauritius, that progress in the
implementation of AGOA had produced mixed results. A number of countries have had benefits
in trade expansion and technical cooperation. But at the same time concerns were raised of
certain limitations to be addressed in AGOA II in order to ensure that this landmark agreement
will have maximum positive impact on sustainable development and the alleviation of poverty in
Africa.
Some of the constraints that we’ve identified include issues in areas of trade and investment
provisions as well as the lifespan of AGOA. For example, the imports of eligible sub-Saharan
African countries from the US fell to $17,935 million in 2002 from $23, 480 million in 2000.
The exports of sub-Saharan African countries increased slightly from $5,926 million in 2000 to
$6,023 in 2002. Most of the imports come from four major countries – Angola, Nigeria, South
Africa and Gabon.
The principal recipient of US exports are South Africa, Nigeria, Kenya, Angola, Chad, Ghana
and Ethiopia. Energy-related products have dominated imports to the US, with 83 percent of all
imports coming from the energy sector. Also, it has been noted that investments for export of
industrial products and development in some eligible countries including Lesotho, Madagascar
and Mauritius essentially come from Europe, South Korea, Taiwan and South Africa. In other
words, many eligible countries do not have the capacity to take advantage of the trade
opportunities offered in AGOA. Also, there is a need for the US to increase investments more in
the consumption industries rather than the extractive industries. Immediate actions in these areas
are preconditions for meaningful job creation, employment opportunities, higher incomes and the
alleviation of poverty. It is however gratifying to note that action has been taken in the Congress
and Senate, which now have AGOA III under consideration. We, therefore, urge the Congress
and Senate to increase political will and provide sound solutions to these concerns.
The development problems of many countries in the continent remain largely unresolved.
Poverty continues to constitute a major threat to human dignity. Significant proportions of the
African population live on less than $1 a day. The prospects of overcoming this in the future
remain dim for most countries threatened by the adverse impact of HIV/AIDS and unfavorable
international economic environments. With this development there are growing concerns that
45
many African countries will not meet Millennium Development goals as set in the Millennium
Declaration.
Distinguished ladies and gentlemen, AGOA is an important development instrument that should
be effectively strengthened for the eradication of poverty in Africa. But this would continue to
require the commitment and cooperation of all stakeholders including the civil society. In this
connection, the AU would request AGOA Civil Society Network to intensify its efforts, to be
more innovative, come up with new initiatives to overcome the bottlenecks on trade, investment,
technical cooperation and capacity building.
At the African Union and within the civil society community in Africa, there is profound
understanding that the civil society has a vital role in the implementation of AGOA. But the
civil society will require adequate resources in order to be an important catalyst in the AGOA
process. It must be sufficiently funded if it is to deliver training and technical assistance to
African governments and the private sector.
It has further been observed that the energies of the civil society could be directed at social
development, the fight against HIV/AIDS, the strengthening of trade assistance and facilitations
in Africa, the articulation and fine-tuning of AGOA conditionalities and eligibility criteria to
better reflect the specific differences in the trade and economic development needs of African
countries. The civil society can explore other possible systems of trade between the US and
Africa, including franchising in Hi-tech e-trade, and hotel and tourism industries.
Finally, civil society organizations could play a leading role in the monitoring and evaluation of
the AGOA program. The Conference on Security, Stability, Development and Cooperation
(CSSDCA) at the AU Commission, as the monitoring, evaluation and interface mechanism of the
AU is embarking on the organization and coordination of the African civil society in this respect.
The AU would welcome cooperation with the AGOA Civil Society Network in this regard.
Thank you for your attention.
Edwin Feulner, Ph.D., President, The Heritage Foundation
On behalf of my 185 colleagues here at The Heritage Foundation, I want to welcome you to our
Lehrman Auditorium and tell you how pleased we are to host you today for this meeting of the
AGOA Civil Society Forum. You have a wonderful agenda ahead for you today. And I’m so
pleased to see our friend from US-AID Connie Newman here this morning.
In welcoming you to Heritage I should tell you that we are a public policy research institute that
is devoted to promoting free markets, individual liberty, and limited government.
Our aim is to shape the policies of our government, and we do this by publishing articles and
books, hosting briefings, speaking at conferences and meeting one-on-one with elected officials
and their advisers.
We accept no government funding or contracts. Rather we are supported by the voluntary
contributions of some 200,000 individual, foundation, and corporate donors.
46
We are not affiliated with a political party – and in fact, we have been known to sharply criticize
the policies of both parties when we disagree.
We support free trade, protection of property rights and the rule of law as being the greatest engines of
economic development and wealth creation in our own country and for the rest of the world.
And, we have criticized policies of tariffs and price supports in the European Union and of our
own government.
We believe that it is through individual action that we have seen the greatest advances in
civilization – whether in architecture or painting or science or literature or technology or
industry. It is through individual genius that we make great leaps forward. Government can
never duplicate the variety and diversity of individual action.
I just want to take a moment to highlight one of our key products
here at Heritage because it really sums up our work on free markets and limited government and
so clearly points out the benefits of these policies – our Index of Economic Freedom.
You’ve all gotten a copy of the CD-rom version of the Index in your packets this morning. And,
my colleague former Attorney General Edwin Meese will be mentioning the Index and speaking
in much greater detail about one of its key factors, the Rule of Law, in his remarks this
afternoon. For now, let me just invite you to use review our Index, use the Heritage research,
call on our experts, and bookmark our website.
We hope we can be a resource to you as you move forward with the African Growth and
Opportunity Act and as you pursue your work for a freer and more prosperous Africa.
Constance Newman, Director, Bureau for Africa, USAID
I'm pleased to be here and speak with you today because of your extremely important mission,
which is that of empowering civil society to work with governments and business to take
maximum advantage of the benefits of AGOA. I thank the consortium of NGOs led by the
Foundation for Democracy in Africa that has organized this event. I commend your initiative
and leadership in making this two-day dialogue possible. As you know, we're gathered here as a
part of the larger AGOA Forum that is bringing together American and African leaders in
government, private sector and civil society. Our aim during these sessions is to find ways to
build a stronger foundation for trade between the United States and the African countries.
Someone has to shape the future of AGOA, someone has to work with the governments and
private sector to take full advantage of AGOA and someone has to monitor the impact of AGOA
on US-Africa trade. It is my belief that that is the role of civil society.
Civil Society is perfect because it can be the voice that is unbiased in monitoring AGOA
compliance. Civil society can track the successes of AGOA and can lead to making relevant
recommendations. In fact, this is what NEPAD is about. It's about African ownership and
leadership in addressing the challenges on the continent. NEPAD is about changing the
relationships between the Africans, African leaders and the donors. That's going to be a
challenge for all of us to make it work properly, but your role as civil society and ensuring that
AGOA works fits right into the principle of NEPAD. In the same way that you are effective and
47
can be effective in monitoring the challenges to progress in health, education and governance,
conflict and other areas - you have and continue to monitor the effectiveness of AGOA and
recommend corrective actions where necessary. At the AGOA Forum in Mauritius in January of
2003, among the topics considered were how to assess performance under AGOA, what is the
effectiveness of the training of workers and what is the relationship of trade to societies'
development in a broader sense. It's almost a year later, and the question needs to be asked,
"How have we done?" I'll just be able to answer that question from my own point of view and
the point of view of USAID, but I think it's a legitimate question for all of us during this forum to
ask - how have we done against some of the benchmarks set at the forum in Mauritius?
I have six points to make with regard to how we have done. The first is - there is general
agreement that trade not only promotes economic growth, but it is a necessary underpinning for
social and economic development. I don't think people are debating that. I don't think that
there's disagreement with regards to the importance of trade in changing the lives of the people
on the continent. Second point to make is - the legislation that exists enforces the need for the
right environment for trade. Specifically, the AGOA legislation states that sustained economic
growth in sub-Saharan Africa depends in large measure upon the development of a receptive
environment for trade and investment, and to achieve this objective, USAID should continue
to support programs which help to create this environment. We have taken this mandate
seriously and we believe that we have been somewhat successful. Not enough and I know in the
Question and Answer we'll have a very lively discussion about the extent to which we have and
have not invested sufficiently in capacity building in sharing information. Three - as a result of
combined efforts since the enactment of AGOA, US-Africa trade has improved dramatically. It's
improved in apparel and textiles for example. Imports to the US from Africa have increased from
nearly zero in 2000 to over 800 million in 2002. As part of this week, I have been involved in
session on handicrafts, and I will say that there we have to be honest most of the advancement in
increase in trade has been in oil, in transportation equipment and textiles and apparel - very little
in handcrafts. It's an area in which there's greater likelihood that larger numbers of people will
benefit, but there's much work that needs to be done to have it be an effective way in which
AGOA can make a difference in the lives of people. Four - USAID through our bilateral and
regional missions is addressing development challenges by working with governments and civil
society organizations including NGOs, community organizations, farmers' groups, women's
groups and business associations. Increasingly, we are also partnering with the private sector to
expand their investments in Africa. In our development assistance program, we are in 24
countries in sub-Saharan Africa and we work closely with the African regional organization. We
are promoting broad-based economic growth through policy reform, technical assistance,
training and capacity building. In addition, emergency relief is structured to help nations make
the transition to sustainable development, and I make this point because most of you understand
large amounts of USAID money is in emergency assistance. What we have been trying to do in
this administration is to recognize that there must be a link between emergency assistance and
development. It must be seen on a continuum or we will always be providing emergency
assistance and not building the capacity and turning the key for Africans to be in charge of
food security, for example, on their own. Fifth point - The DOHA Development agenda of 2002
called upon the world community for specific commitments of technical assistance, capacity
building and integrated approaches. Our trade capacity building activities are as follows in 2003;
48
$133 million was spent in Africa. This was an increase of over $64 million spent in 2001. With
regard to the money that has been spent, assistance is available for requests in the following
areas to answer the how to questions on: how to meet WTO commitments, how to improve trade
policy making, how to engage civil society, revise or adopt new laws and how to improve the
institutional and physical infrastructure for trade. Sixth point - President Bush's trade initiative
announced that the first AGOA Forum in October of 2001 resulted in the creation of three
regional hubs for global competitiveness. One in Botswana, one in Kenya and one in Ghana. In
these hubs, there's access to information and expertise from the office of the US Trade
Representative, Departments of Agriculture, Commerce, State and Treasury. Also, each of the
hubs is organized to sponsor awareness programs, such as workshops, roundtables and trade
delegations to build greater understanding of AGOA regulations and to reach out to US
companies to partner with African business ventures. The hubs have been at the forefront of a
redesigned approach to assist African agricultural producers seeking to enter US markets. The
US Department of Agriculture and USAID have understood that there is a very complicated
process of getting food products, for example, into the United States, and to respond to that
agriculture is putting agents into these hubs in order to facilitate the implementation of food
health standards required prior to importation into the United States.
In closing, I'd like to say a little about the role of civil society organizations - particularly since
you will be spending much of today deliberating about ways in which you can encourage African
governments and businesses to take full advantage of AGOA. Here's my advice for what it's
worth - First of all, civil society should continue to stay informed and track the issues of
economic empowerment, trade and investment. Civil society has a unique role to play in
encouraging African governments to create an enabling environment for local and foreign
investors. Recognizing that investment is an essential component of expanded economic growth
and trade and in view of the policies and practices that often serve as obstacles to investment, I
encourage you to consider some of the questions that investors generally ask. Will my
investment be secure or will it be subject to nationalization? Is the country politically stable? Are
the customs systems working in a fair and transparent manner or will imports be held up at
ports? Will contracts be enforced through an efficient and effective court system? Is there a well
trained and disciplined workforce? Is there a well-regulated and strong banking system? I know
that you can add to this list, but in order to ensure serious investors, it is important to understand
the kinds of questions that they consider prior to putting their money down. Secretary Powell
says all the time, "Money is coward." Money is a coward, and people will think of all kinds of
reasons why it's risky to put their money down. So what all of us trained in investment need to
do is to think of those questions first and have the right kinds of answers when they come to
determine whether or not it's a proper place for investment. Civil society organizations are well
positioned that their governments and the private sector practice sound management, fiscal
accountability as well as transparency and integrity in business transactions. All of these factors
will contribute to a favorable investment climate and lead to expanded capital investment and
economic growth.
Thank you.
49
Dr. Angel Batiste, Area Specialist, Africa and Middle Eastern Division, Library of
Congress
PowerPoint presentation – See Appendix B
Dr. Abdul Shaikh, Senior International Economist and Regional Coordinator for Africa &
Middle East, International Trade Administration, US Department of Commerce
PowerPoint presentation – See Appendix B
Soloman Samen, Trade Coordinator, West and Central Africa, The World Bank
PowerPoint presentation – See Appendix B
Bahati Modeste, Executive Director, SOCICO
How to Monitor and Track the Impact Trade Has in Our Countries
First of all, it appears imperative to me to underline the importance of trade in the development
and in the economic growth of a country.
I will deal only with two aspects of trade to demonstrate this importance. Afterwards, I’ll give
my views on the role that Civil Society Organizations should play so as to ascertain
progressively healthy, fair and honest trade practices.
In mentioning this last aspect, I’m sure that some members of this respectable assembly must be
quite skeptical. But I think that it is still possible to change for the better when following the
well-coordinated actions of Civil Society framework, which functions as an international
network. Trade which results in grossly exaggerated profits without properly respecting
consumers’ and producers’ rights or even international standards must be avoided.
Let us not forget, dear friends, that our primary mission is to defend human rights, to fight for the
improvement in the quality of life of our populations, to fight against poverty, to support peace,
democracy, sustainable development and health for all, to look after the respect of the rights of
social and professional organizations, to maintain a healthy environment, to fight for gender
equality and for the integration of the youth in the management process of government to
promote good political and economic governance.
The two aspects of trade, which I’ll deal with, are the following:
Internal commerce, and
International commerce
What characterizes commerce in our developing countries is that the raw materials we produce is
essentially aimed towards servicing industries form the north or from former colonizing nations.
A fair and loyal business concept would ascertain that the producer sets the selling price of his
products so he knows the costs of production, the paying out or offset capital and sustainable
investments.
50
The reality is unfortunately otherwise as in opposition to the industries from the North which fix
themselves the selling price of their finished products, the buying price of our raw materials is
fixed by the buyers. This is indeed a tragedy.
This is valid as much as for the Democratic Republic of Congo as for other developing countries.
To this, one may add the unethical behavior of most economic operators who fix themselves
exaggerated margins of profit but also high costs of services and basic necessities such as
transport, telephone, water, electricity, generic drugs and so on.
I think that Civil Society cannot keep quiet under such conditions and must exert adequate
pressure so as to convince policy makers to bring about a price scale, which shall be near costs of
production without hindering liberal economic policies.
On the international front, the situation is even worse due to the difficulties sustained in foreign
exchange payment, which foreign exchange can only be procured through the price scales
imposed on us by the constant fluctuation in exchange rates generally to our disadvantage.
This dark pictures of the internal and external trade concepts of our countries shows that despite
efforts on the part of one and all in order to set our countries on the way to development and
economic growth, poverty will continue to afflict our populations.
WE have to be honest and say that our trade situations not the single factor contributing to
poverty. Considering the Democratic Republic of Congo, poor political and economic
governance principles and the absence of democracy during several years are also important
causes of our social degradation. Otherwise, how to explaining the low income of Congolese
population despite the fact that the country has fabulous natural resources including mining,
energy, hydro-electricity, forestry, agriculture, human capital and petroleum over an area of 2.5
million sq km under excellent climatic conditions.
The Congolese Civil Society has, since 1990, decided to get involved in politics by querying all
political leaders and proposing a new political order while maintaining it’s traditional activities.
Already, we notice an improvement in our quality of life. The other actors of African Civil
Society should follow suit, if they haven’t done so yet.
Monitoring and Evaluation of the Trade Impact by Civil Society
As the economy controls both politics and social affairs, I think that a window of opportunity has
just been given to us by the US – especially through AGOA and its’ new customs regulations
and facilitating mechanisms. Once more, Civil Society must seize this opportunity to get
involved in the trade sector so as to render it more healthy, loyal and fair to the advantage of our
populations.
To this end, Civil Society must be better organized both at national and international levels so as
to influence the impact of trade in our countries to the advantage of our consumer societies.
Civil Society must also establish a communication network to facilitate exchanges between
African and American economic operators.
51
In its structures, Civil Society must implement a system of communication so as to enable its
members and citizens to operate positively in matters pertaining to consumption, savings and
investments.
At the level of the Secretariat of the AGOA Civil Society Network and starting from the Unit of
Civil Society at the African Union (of the ECOSOCC and of each member State), a monitoring
cell must be added to report annually on the impact of trade in general and particularly under
AGOA.
This report shall be sent at the disposal of all Civil Society Organizations, of business chambers
of commerce in Africa and America, of the US Government, of our respective governments, of
NEPAD and of the Economic Social and Cultural Council (ECOSOCC) of the African Union.
Vernice Guthrie, Director, American Bar Association – Africa Law Initiative
I'd like to thank Fred and the folks at FDA for organizing this very important forum. I'd also like
to bring you greetings from President Archer of the American Bar Association. His presidency
is significant as he is the first African American President during the 126 years of the American
Bar Association and while we are glad to have his leadership, it's been a long time coming. I'm
the first Director of ABA - Africa and a lawyer with the privilege of working in a wide variety of
African countries, so during my remarks I am going to focus of the law as an instrument and tool
for development. I will leave you with some challenges as a civil society network because we
have our colleagues here from The World Bank, the Department of Commerce and our
governmental institutions who are focusing on the impact of AGOA vis a vis trade, the economy
and business development and that is important, but i think perhaps our role as civil society
representatives and activists is also to think about the human impact. I think there are number
countries where one can see that economic development did not equal an improvement in human
status. How do we wedge ourselves in a way that as we grow business and development in
Africa we ensure that we're not helping to reinforce an already unequal playing field? How do
we do that? Through the use of law, through the use of legislation, through the use of training
and the rest. With that said, I'd like to give you a quick overview of how I think that we can use
the law to track the impact of AGOA.
First, I think we need to think of AGOA as an entry point to a much larger vision. AGOA is an
important beginning but we need to be setting up institutions and instrumentalities to support
business development, economic growth and redistribution well beyond the confines of AGOA
not only in terms of time frame, but also in perspective. So that we use it as a launching pad, and
use it in thinking about the longer and larger interest. To that end, we're watching the
harmonization and integration of law and legislation in a regional sense all over the world, in this
region [the United States] we have NAFTA, and there's the EU. What's happening under the
context of OHADA? How are Africans in Southern Africa and Eastern Africa integrating the
legislation and law into those regional pacts to develop the economic and legislative forces as a
pushback to those other economic and regional forces that are being mounted? When you see
EUs and NAFTAs of the world coming together, they're coming to join forces, and one of the
ways that they're doing it is through harmonization of law and legislation. I think one of the
challenges in terms of enforcement or tracking the status of law and legislation is that if you go
52
to West Africa for every country there is a different legal framework and enforcement
mechanism. For folks that already find the prospect of doing business in Africa daunting, it
makes it even more of a daunting task. More important than outsiders, it creates barriers to interregional and inter-country connections, commerce and transit, which is a significant challenge
and barrier. So how do we track some of those issues? Concerning issues of enforcement and
how one goes about enforcing law, we should look at how to track the enforcement of law. Also,
how do we access accurate information? We've had presentations on information from the
Department of Commerce and the Library of Congress that suggest ways that we can get
appropriate information.
How do we prepare a cadre of lawyers to defend the rights and to look after the rights of African
nationals? I know we have representatives here from Kenya, so I'm going to use the case of
Kenya as a test case. In Kenya we saw an attempt to integrate a country into the WTO by
signing off on some instrumentalities that at the end of the day do not serve the Kenyan people
because it prevented the importation of low-cost HIV/AIDS drugs. Who led the force in
correcting that process? It was not the legislatures. It was not the lawyers. It was the NGO
community. They redrafted the law. They held the parliamentary representatives accountable.
They put their feet to the fire and they made them do the right thing. I think our challenge is to
prepare ourselves to hold government and companies accountable. In the US we have seen that
the impact of wealth and greed is devastating. The Enron’s, the WorldCom’s, the Tyco’s. These
24 months have been a definite moral roller coaster ride in terms of legal instruments and the
protection of individuals against the force of greed. How do we ensure that as businesses and
companies enter into African countries and as exportation of products grow - and we want that that there is some balancing of human interest, of labor rights, of the rights of individuals living
with HIV/AIDS? How do we ensure that growth and economic wealth equals an improvement at
the community level because it is not guaranteed, especially if the growth ends up in seepage
into black holes that exist within governmental institutions? We're watching a number of
countries grapple with this issue. Kenya right now is taking on the issue of corruption with in
the judiciary that will be historic if they succeed. It's politicized, but at the end of the day all of
this goes to the ability to serve communities. If your judiciary is not serving the community,
than you have failed miserably. If economic growth does not ensure the improvement of
people's lives, it equals nothing. It reinforces an unequal playing field and it ends up in a case
like Indonesia, and there are a couple of countries that are heading in that direction.
So I think that our challenge as civil society organizations is to educate ourselves and to prepare
a cadre of African nationals who are the eyes and ears for the average person. Because the
average person in village, much like the average person in Washington, DC, knows very little
about the intricacies and subtleties of law and legislation. What they know is how it hurts them,
but in terms of knowing how to fix it and push back against international forces - that is our job.
So as we look at the improvements and the positive impacts on the business side, let us not forget
the human toll and the human realities.
What we see in the US is that an increase in economic development does not equal an increase
jobs with livable wages and benefits. So we need to be very careful about what our role is. It's
different than that of The World Bank, and its different than that of government officials. I know
I'm singing to the choir here, but I think one can get swept up in the economic realities and it's a
good new situation, but we can create a win-win situation so that folks think of economic and
53
business development as an improvement in their everyday lives. The road to meeting that
challenge is not an easy one, but it's doable. That's our role. In terms of the law and lawyers, are
we training a cadre of lawyers and judges to protect African interests or are we training them
defend intellectual property rights of developed countries and pharmaceutical companies? I'm
speaking in a very frank way. If we're training them to protect the interests of developed
countries, who will protect the interests of the African who has natural remedies for illness?
They exist. How many laws have been changed? "How many lawyers have we trained? How
many people in the rural communities have benefited from AGOA?
Thank you.
Indur M. Goklany, Independent Scholar and Author, “The Globalization of Human Well
Being” CATO Institute
Supplemental PowerPoint presentation (Including Figures) – See Appendix B
Controversy over globalization has focused mainly on whether it exacerbates income inequality
between the rich and the poor. But, as opponents of globalization frequently note, human wellbeing is not synonymous with wealth. The central issue, therefore, is not whether income gaps
are growing but whether globalization advances well-being and, if inequalities in well-being
have expanded, whether that is because the rich have advanced at the expense of the poor. More
direct measures of human well-being than per capita income include freedom from hunger,
mortality rates, child labor, education, access to safe water, and life expectancy. Those indicators
generally advance with wealth, because wealth helps create and provide the means to improve
them. In turn, those improvements can stimulate economic growth by creating conditions
conducive to technological change and increasing productivity. Thus, wealth, technological
change, and well-being reinforce each other in a virtuous cycle of progress. During the last half
century, as wealth and technological change advanced worldwide, so did the well-being of the
vast majority of the world’s population. Today’s average person lives longer and is healthier,
more educated, less hungry, and less likely to have children in the workforce. Moreover, gaps in
these critical measures of well-being between the rich countries and the middle- or low-income
groups have generally shrunk dramatically since the mid-1900s irrespective of trends in income
inequality. However, where those gaps have shrunk the least or even expanded recently, the
problem is not too much globalization but too little. The rich are not better off because they have
taken something away from the poor; rather, the poor are better off because they benefit from the
technologies developed by the rich, and their situation would have improved further had they
been better able to capture the benefits of globalization. A certain level of global inequality may
even benefit the poor as rich countries develop and invest in more expensive medicines and
technologies that then become affordable to the poor.
Introduction
Much of the debate over globalization and its merits has revolved around the issues of income
inequality and whether in the past few decades globalization has made the rich richer and the
poor poorer.1 For example, Laura D’Andrea Tyson, former national economic adviser in the
Clinton administration, and others claimed that “as globalization has intensified, the gap between
per capita incomes in rich and poor countries has widened.”2 David Dollar and Aart Kraay,
economists at the World Bank, have challenged such statements, countering that “the best
evidence available shows the exact opposite to be true . . . [and that] . . . the current wave of
54
globalization, which started around 1980, has actually promoted economic equality and reduced
poverty.”3 Regardless of where the truth may lie, these arguments miss the point.
The central issue with respect to globalization is neither income inequality nor whether it is
getting larger; rather it is whether globalization advances human well-being and, if inequalities in
well-being have indeed expanded, whether that is because the rich have advanced at the expense
of the poor. But as opponents of globalization frequently note, human well-being is not
synonymous with wealth,4 nor—to echo a catchy antiglobalization slogan—can you eat GDP.5
To conflate the two is to confuse ends with means. While wealth or per capita income (as
measured by gross domestic product per capita) is probably the best indicator of material wellbeing, its greater importance stems from the fact that it either helps provide societies (and
individuals) the means to improve other, probably more important, measures of human wellbeing (such as freedom from hunger, health, mortality rates, child labor, educational levels,
access to safe water and sanitation, and life expectancy) 6 or is associated with other desirable
indicators (such as adherence to the rule of law, government transparency, economic freedom,
and, to some extent, political freedom).7 In fact, as shown in Figure 1, which will be discussed in
greater depth below, analyses of cross-country data show that although these other indicators
generally improve as per capita income rises, their relationships are not linear.8 The
improvements are usually rapid at low levels of economic development but slow down or, in
some cases, halt altogether as they reach their practical or theoretical limits.9 Therefore, per
capita income would not, by itself, be a good measure of human well-being, and any
determination of whether globalization has benefited humanity in general, or favors the rich at
the expense of the poor, should be based on an examination of how these more relevant measures
of human well-being have evolved as globalization has advanced.
Indicators of Human Well-being
This paper examines five indicators that measure distinct, though related, aspects of well-being.
Three of these are measures of misery and deprivation and reflect “negative” well-being, one is a
“positive” measure of well-being, and the last is the United Nations Development Program’s
human development index, which combines per capita income with two of the positive indicators
of well-being.10 The negative indicators that are examined are available food supplies per capita
(low levels of which are surrogates for hunger and malnourishment), infant mortality, and the
prevalence of child labor. The first two—indicative at the extremes of famine and death, two of
the Four Horsemen of the Apocalypse—have through the ages been synonymous with fear and
misery. Less than half a century ago, famine, natural or man-made, still seemed to have mankind
within its awful reach. This once-chronic condition claimed more than 30 million Chinese in
1959–61 alone.11 An increase in the quantity of food is, perhaps, the first step to a healthy
society. Having an adequate amount of food also enables the average person to focus on matters
beyond mere sustenance and to live a more fulfilling and productive life. Hunger and
undernourishment, moreover, retard education and the development of human capital, which, in
turn, could slow down both technological change in every human endeavor and growth in every
economic sector.12 Thus, inadequate food supplies could not only add to misery but also slow
progress in the positive indicators of well-being. The second negative measure, infant mortality,
also broadly tracks child and maternal mortality. Perhaps nothing has caused more sorrow and
grief for womankind through the ages than the untimely death of children. For most of
mankind’s tenure on earth, infant mortality has been one of nature’s cruel mechanisms for
55
keeping human populations in check. The third negative measure is the prevalence of child
labor. The ability to provide one’s children a childhood free from labor was a luxury that for
centuries only the upper classes and the wealthy could afford. In most households in most
cultures, children were traditionally viewed as additional hands. They contributed to the
family’s economic security by working on the farm, in handicrafts, menial tasks, and, in the
initial phases of industrialization, in factories. Increases in productivity due to new technologies,
however, have made it possible to dispense with their labor in developed countries. This trend
accelerated as families became wealthier, real prices of food dropped, the children’s economic
contribution became less critical to the family’s survival and security in old age, and the intrinsic
and economic value of education to children’s and, possibly, the family’s future economic and
social security began to be recognized.
The positive measure that this paper analyzes is life expectancy at birth, probably the single most
important indicator of human well-being. Longer life expectancy is also generally accompanied
by an increase in disability- free years of life. According to the World Health Organization, the
disability-adjusted life expectancies for the United States, China, and India, for instance, were
70.0, 62.3, and 53.2 years, respectively, in 1997–99.13 Contrast that with the total (unadjusted)
life expectancies of those three countries in 1950–55: 69.0, 40.8, and 38.7 years, respectively.
14
Moreover, studies from various developed nations indicate that disability in their older
populations has been declining.15 In the United States, for instance, the disability rate dropped
1.3 percent per year between 1982 and 1994 for persons aged 65 and over, which resulted in 1.2
million fewer disabled persons in that age group in 1994.16 So we are living longer—and
healthier—lives. Thus the quantity and the quality of life go hand in hand. It might be argued
that, because higher levels of hunger and mortality reduce life expectancy, these measures
overlap. However, life expectancy does not fully capture the fear and dread associated with
famine and death. The last indicator that this paper examines is the United Nations Development
Program’s aggregate human development index (HDI). This indicator was developed in
recognition of the fact that there is more to development than a higher income. The HDI is based
on the average of three measures: life expectancy at birth, educational attainment, and the
logarithm of per capita income—the logarithm, because each additional dollar of income adds
less to the quality of life than the previous dollar. The composition of the HDI can be justified on
the grounds that life expectancy, as noted, is perhaps the most significant indicator of human
well-being, per capita income reflects material well-being, and educational attainment—in
addition to being an end in itself—is essential for conserving and creating new human capital.
With the appropriate set of institutions, education can accelerate the creation and diffusion of
technology.17 Moreover, education (particularly of women) seems to be a key factor in
spreading knowledge about safe drinking water, sanitation, proper hygiene, nutrition, and other
public health practices that help societies improve health, reduce mortality, and increase life
expectancy.18
Trends in Measures of Human Well-being
Are the trends in the various measures of human well-being improving as globalization marches
on? Have gaps in these measures between the rich and the poor countries widened and, if they
have, is globalization responsible?
56
Trends with Respect to Economic Development
Figure 1, based on cross-country data, shows that various indicators of human well-being
improve as countries become wealthier, with improvements coming most rapidly at the lowest
levels of wealth. There are several possible explanations for this association. First, economic
development indeed improves these indicators. Greater wealth translates into greater resources
for researching and developing new technologies that directly or indirectly advance human wellbeing.19 It also means increased resources for advancing literacy and education, which, too, are
generally conducive to greater technological innovation and diffusion. 20 Equally important,
wealthier societies are better able to afford new as well as existing, but underused,
technologies.21 For instance, with respect to health—captured in Figure 1 by both infant
mortality and life expectancy—these include “old” technologies such as water treatment to
produce safe water, sanitation, basic hygiene, vaccinations, antibiotics, insect and vector control,
and pasteurization,22 as well as newer science-based technologies such as AIDS and oral
rehydration therapies, organ transplants, mammograms, and other diagnostic tests. They also
include agricultural technologies that increase crop yields, thereby increasing available food
supplies and reducing hunger and malnourishment, which then reduces the toll of infectious and
parasitic diseases.23
Historically, reducing hunger and undernourishment has been among the first practical steps
nations have taken to improve public health. That step has reduced infant mortality and increased
life expectancy.24 And if despite increased food production a country is still short of food,
greater wealth makes it possible, through trade, to purchase food security.25 Greater wealth also
makes it more likely that a society will establish and sustain food programs for those on the
lower rungs of the economic ladder.26 Therefore, while “you can’t eat GDP,”27 the larger GDP
is, the less likely you are to go hungry or be undernourished. As Figure 1 illustrates, greater
wealth, through a multiplicity of mechanisms—higher literacy, greater food supplies, and greater
access to safe water— leads to better health.28 It is possible that the causation may work in the
reverse direction. Perhaps it is advances in human well-being that stimulate economic
development, rather than vice versa. Healthier people are more energetic, less prone to
absenteeism, and, therefore, more productive in whatever economic activity they undertake.29
When malaria was eradicated in Mymensingh (in Bangladesh), crop yields increased 15 percent
because farmers had more time and energy for cultivation.30 In other areas, elimination of
seasonal malaria enabled farmers to plant a second crop. A study done jointly by the Harvard
University Center for International Development and the London School of Hygiene and
Tropical Medicine estimates that had malaria been eradicated in 1965, Africa’s GDP would have
been 32 percent higher in 2000.31 Moreover, healthier people can devote more time and energy
to education and intellectual development.32 Good health is particularly important during
children’s formative years. Also, the incentives for investing in developing human capital
increase if individual beneficiaries expect to live to 60 rather than, say, a mere 40. Not
surprisingly, educational levels increase with life expectancy.33 Today it is not unusual to
encounter aspiring doctors and researchers in their mid-30s, in effect, devoting what once was
literally a lifetime to learning their trade. And having acquired expertise, those doctors and
researchers are poised to contribute to technological innovation and diffusion in their chosen
fields and to guide others along the same path. Thus better health helps raise human capital,
which aids the creation and diffusion of technology and thereby further advances health and
accelerates economic growth. Both wealth’s and health’s causes and effects probably reinforce
57
each other in a set of interlinked cycles. One such cycle is the health-wealth cycle in which—as
we have seen—wealth begets health and health, wealth. Another cycle consists of food
production, food access, education, and human capital, which also helps turn the health wealth
cycle. These cycles are embedded in a larger “cycle of progress” in which economic growth and
technological change reinforce each other.34 Yet another explanation for the association
between human well-being and wealth is that the factors that improve one also improve the
other. Those include legal and economic systems—free markets; secure property rights; honest,
predictable, and fiscally responsible governments and bureaucracies; and adherence to the rule of
law—that encourage competition not only in the commercial sphere but also in the scientific and
intellectual spheres and allow those who venture their labor, intellectual capital, and financial
resources to profit from the risks they incur.35 These institutions are also the foundations of civil
societies and democratic systems. Trade is an integral part of the cycle of progress. Freer trade
directly stimulates economic growth,36 helps disseminate new technologies, and creates pressures
to invent and innovate.37 For instance, competition from foreign car makers accelerated the
introduction of several automobile safety and emission control systems to the United States,
improving both environmental and human well-being.38 Trade also helps contain the costs of
basic infrastructure, including water supply, sanitation, and power generation
(although the full benefits are often squandered because of corrupt, inefficient, and
opaque bureaucracies and governments).39 Finally, as will be discussed below, trade has
globalized food security.40
Trends with Respect to Time or Technological Change
Figure 2 shows not only that life expectancy has increased with the level of economic
development but that the entire life expectancy–wealth curve has risen over time.41 This curve’s
upward displacement is consistent with the creation and diffusion over time of new as well as
existing, but underused, technologies. In effect, in Figure 2 the change in time (depicted by going
from the 1962 life expectancy curve to the 1997 life expectancy curve) serves as a surrogate for
technological improvement.42 This figure also shows that infant mortality improves with
economic development and technological change (the entire curve drops with time).43 I have
shown elsewhere that these features—improvements in wealth and technology (for which time
serves as a surrogate)—are common to other indicators of well-being including those shown in
Figure 1.44 Cumulatively, they indicate that, for any specific level of real income, human
well-being ought to be more advanced today than it was a few decades ago.
Trends in Inequalities in Well-Being, Hunger and Undernourishment
Concerns about the world’s ability to feed its burgeoning population have been around at least
since Malthus’s Essay on Population, published 200 years ago. Initially the concern was global.
But by the 1950s and 1960s, despite the privations of the Great Depression and World War II, it
seemed that the problem, if any, would be restricted to developing countries. Several neoMalthusians, such as Paul Ehrlich, author of Population Bomb,45 and the Paddock brothers,46
confidently predicted apocalyptic famines in the latter part of the 20th century in the developing
world. But remarkably, despite an unprecedented increase in the demand for food fueled by
equally unprecedented population and economic growth, the average inhabitant has never been
better fed and less likely to be hungry and undernourished. Between 1950 and 2000, world
population increased by 140 percent and per capita income by more than 170 percent. Yet,
because of the enormous increase in agricultural productivity and trade, the real price of
58
food has never been lower. Low food prices ensure that the benefits of increased production
are distributed broadly and food surpluses flow voluntarily to deficit areas. As a result,
worldwide food supplies per capita have improved steadily during the past half century. Between
1961 and 1999, the average daily food supplies per person increased 24 percent globally, from
2,257 calories to 2,808 calories.47 The increase was even more rapid in developing countries
where it increased 39 percent, from 1,932 to 2,684 calories. The improvements for Indians and
Chinese—40 percent of humanity—are especially remarkable. By 1999, China’s average
daily food supplies had gone up 82 percent to 3,044 calories from a barely subsistence level of
1,636 calories in 1961 (a famine year). India’s went up 48 percent to 2,417 calories from 1,635
calories in 1950–51.48 However, consistent with Figure 1, which shows per capita daily food
supplies rising with wealth, improvements in per capita food supplies have been slower where
for whatever reason—war, political instability, or failed policies and institutions—economic
development has lagged. For instance, between 1961 and 1999 average daily food supplies per
capita in Sub-Saharan Africa increased a paltry 6 percent from 2,059 to 2,195 calories.49 The
decline in food supplies in Eastern Europe and the former Soviet Union (EEFSU) after the
collapse of communist regimes there only underscores the importance of economic development.
To put the improvements in per capita food supplies into context, the United Nations’ Food and
Agricultural Organization estimates that an adult in developing countries needs a minimum of
1,300 to 1,700 calories per day merely to keep basic metabolic activities functioning when at rest
in a supine position. Food intake below those levels results in poor health, declining body
weight, and physical and mental impairment. If one allows for moderate activity, then the
national daily average requirement increases to between 2,000 and 2,310 calories per person.50
Therefore, since 1961, developing countries’ available food supply has, on average, gone from
inadequate to above adequate. But these averages mask the fact that hunger still persists today
since many people unfortunately have below-average food intake. Nevertheless, between 1969–
71 and 1997–99 the number of people suffering from chronic undernourishment in developing
countries declined from 920 million to 790 million, or from 35 percent to 17 percent of their
population, despite a 76 percent growth in their population.51 Thus gaps between developing and
developed countries in hunger and malnourishment have, in the aggregate, declined in absolute
and relative terms. But the trends for Sub-Saharan Africa tell a somewhat more nuanced tale.
Between 1979–81 and 1997–99, the share of population that was undernourished declined from
38 to 34 percent, but the absolute numbers increased from 168 million to 194 million.52
Why does economic development reduce the level of undernourishment? Cross-country data
show that both crop yield and per capita food supply follow the pattern indicated in Figure 2,
that is, both increase with income.53 Crop yields increase because richer countries (or farmers)
are better able to afford yield- and productivity-enhancing technologies, such as fertilizers,
pesticides, better seeds, and tractors.54 But even if a country has poor yields or insufficient
production, if it is rich it can import its food needs.55 Hence, as Figure 1 shows, the richer the
country, the greater its available food supplies. Because it is always possible to have local food
shortages in the midst of a worldwide glut, the importance of trade should not be underestimated.
Currently, grain imports amount to 10 percent of production in developing countries and 20
percent in Sub-Saharan Africa.56 Without such imports, food prices in those countries would no
doubt be higher and more people would be priced out of the market. In essence, globalization,
through trade, has enhanced food security. And in doing so it has reduced the severe health
burdens that accompany hunger and undernourishment.57
59
To summarize, the developing countries where hunger and undernourishment were reduced the
most are those that also experienced the most economic development. Certainly, for this
indicator, globalization leading to faster economic development and greater trade would seem to
be the solution rather than the problem.
Infant Mortality
Before industrialization, infant mortality, measured as the number of children dying before
reaching their first birthday, typically exceeded 200 per 1,000 live births.58 Starting in the 19th
century, infant mortality began to drop in several of the currently developed countries because of
advances in agriculture, nutrition, medicine, and public health. By the early 1950s, a gap had
opened up between developed and developing countries as infant mortality dropped to 59 in the
former and 178 in the latter. 59 By 1998 further medical advances reduced infant mortality in
developed countries to 9, but because existing health care technology (including knowledge)
diffused even faster from developed to developing countries, it had declined to 64 in the latter.60
Thus, during the past half century the gap between developed and developing countries has been
halved.61 The drop in infant mortality has been broad and deep. Since at least 1960 infant
mortality has dropped more or less continuously for each of the country groups shown in Figure
3.62 It also illustrates that in any given year, consistent with Figure 1, higher per capita income is
generally associated with lower infant mortality. Between 1960 and 1999, the gaps in this
indicator between high-income members of the Organization for Economic Cooperation and
Development and the other income groups shrank rather than increased. These gaps closed the
fastest for medium-income countries and the slowest for Sub-Saharan Africa. This is
counterintuitive since the larger the initial gap, the faster it ought to shrink, because the closer
infant mortality is to zero, the harder it should be to reduce it further. Consistent with Figure 2
and the rapid technological diffusion from developed to developing countries in the past few
decades, Table 1 indicates that many developing countries are far better off today than the
currently developed countries were at equivalent levels of economic development.63 In 1913
when the United States had a per capita income of $5,301 (in 1990 international dollars), its
infant mortality was about 100. By contrast, in 1998 China’s and India’s, for example, were 31
and 71, respectively, despite per capita incomes that were 41 to 67 percent lower.
Thus, as is the case for hunger and undernourishment, the areas where infant mortality has
improved the least are those with insufficient economic development or that, for whatever
reason, have been unable to fully capitalize on existing knowledge and technology. Once again,
globalization seems to be part of the solution rather than the problem.
Life Expectancy
Because historically the decline in infant mortality was a major factor in the improvement in life
expectancy, there are certain parallels between the progress in these two indicators, especially in
the earlier years. For much of human history average life expectancy was between 20 and 30
years.64 Life expectancies in the currently developed countries increased slightly in the early part
of the 19th century, followed by (small) declines in the middle half of the 1800s (probably
because of urbanization) before commencing, with a few notable exceptions and some minor
fluctuations, a sustained improvement that continues to this day.65 Contributing to these
improvements were increases in food supplies per capita; the ascendancy of the germ theory; and
the adoption of such basic public health measures as access to clean water, sanitation,
60
pasteurization, vaccination, antibiotics, and the use of pesticides such as DDT to control malaria
and other vector-borne diseases. Because these public health and medical advances were
discovered, developed, and adopted first by the developed countries, a substantial gap opened up
in average life expectancy between them and developing countries. By the early 1950s the gap
stood at 25.7 years in favor of the former.66 But by the late 1990s, with the diffusion and transfer
of technology (including knowledge) to developing countries, this gap had closed to 11.6 years.
A closer look at trends for different country groupings, however, reveals a more complex
situation. Figure 4 compares life expectancies of high-income OECD, middle-income, and
low-income countries and Sub-Saharan Africa. Consistent with Figures 1 and 2, in any
given year, life expectancy increases with per capita income. Between 1960 and 1999, life
expectancy improved for high-income OECD and middle-income countries. However, the
gap between these two sets of countries, which had shrunk from 24.5 in 1960 to 7.9 by the late
1980s, increased slightly to 8.6 by 1999, mainly because the middle-income countries include
many EEFSU nations in which life expectancies declined as their economies contracted
during that period.67 The gap between high-income OECD and low-income countries also
declined for most of the post–World War II period. But it expanded slightly from 1997 to 1999
because, while life expectancy in the former continued to increase because of medical advances,
it dropped slightly in the latter.68 This drop was particularly severe in Sub- Saharan Africa
where, as shown in Figure 4, life expectancy declined by three years in the 1990s, as a result of
the HIV/AIDS epidemic and—in some cases, even more important— the resurgence of malaria69
aggravated by civil unrest and cross-border conflicts in several areas. Consequently, the gap
between rich and poor countries expanded in the 1990s, reversing the direction of the trend of
previous decades. But it didn’t expand because the rich increased their life expectancy
at the expense of the poor; rather it was because, when faced with new diseases (such as AIDS)
or new forms of ancient ones (for example, drug-resistant tuberculosis), the poor countries
lacked the economic and human resources not only to develop effective treatments but also to
import and adapt treatments invented and developed in the rich countries. Notably, both
economic and human resources are more likely to be augmented with globalization than without
it. Sub-Saharan Africa’s experience with AIDS is in stark contrast to that of the richer
nations. When the disease first appeared, it resulted in almost certain death everywhere— in
developed as well as developing countries. The former, particularly the United States, launched a
massive assault on the disease, which led to the development of several technologies to reduce its
toll. As a consequence, between 1995 and 1999 estimated U.S. deaths due to AIDS dropped by
more than two-thirds (from 50,610 to 16,273) although the number of cases increased by almost
half (from 216,796 to 320,282). In 1996 it was the eighth leading cause of death in the United
States. By 1998 it had dropped out of the worst 15 list.70 The United States was able reduce
deaths from AIDS because it both was wealthy and had the human capital to address this disease.
But despite the fact that the necessary technology now exists and, in theory, is available
worldwide, similar improvements have yet to occur in Sub-Saharan countries because they
cannot afford the cost of treatment, unless it is subsidized by the governments, charities, or even
industries of the richer nations. And indeed such subsidies are exactly what the worldwide effort
to contain HIV/AIDS hopes to mobilize. This is as clear an illustration as any that the greater the
economic resources, the greater the likelihood not only of creating new technologies but,
equally important, of actually putting those technologies to use. And unless technologies are
used, they will sit as curios on a shelf, providing no benefit to humanity. It might be argued that
61
the rapid spread of AIDS and other diseases was, in fact, one of the unintended consequences of
globalization. Without the transportation network that enables goods and people to move great
distances, AIDS, for instance, might have been an isolated phenomenon rather than a pandemic.
And indeed that much is true. But the same network also helped reduce public health problems in
numerous ways. It helped reduce hunger and malnourishment by moving agricultural inputs and
outputs between farms and markets. This was critical to increasing global food supplies in the
past half century and, as noted, was one of the first steps to improved public health. Second,
the transportation network is crucial to the worldwide diffusion of medical and public health
technologies because it makes possible, for instance, the distribution of medicines, vaccines,
medical equipment, insecticides for pest control, and equipment for water treatment plants. But
globalization is more than the movement of goods; it also involves the movement of people and
the diffusion of their ideas, knowledge, and expertise. That movement, too, is made possible by
the transportation network as doctors, nurses, agronomists, engineers, and scientists move back
and forth between the developing and developed worlds. But there is one area in which
globalization of ideas and attitudes has retarded further progress toward improvements in human
well-being. One reason for the resurgence of malaria in many developing countries in the 1980s
and 1990s was that, starting in the early 1960s, DDT, which had been instrumental in the post–
World War II conquest of malaria in Europe and North America, began to be demonized in the
rich countries.71
Eventually, many of the rich countries banned the use of DDT and curtailed, if not eliminated, its
production. Although that had virtually no effect on their public’s health—the rich countries had
already conquered malaria and could, moreover, afford substitutes in case they were needed to
combat any recurrence—the consequences for such of the developing world were tragic. The
global translocation of rich countries’ attitudes toward DDT, coupled with its unavailability or
higher price due to reduced production and the paternalistic insistence of Western aid agencies
that DDT’s environmental consequences justified suspending its use for public health purposes,
reduced the developing world’s access to its most cost-effective weapon in its long-standing war
against malaria.72 That contributed to are bound in the malaria mortality rate in Sub- Saharan
Africa.73 That rate, which had dropped from 216 per 100,000 in 1930 to 107 in 1970, had
climbed back to 165 per 100,000 in 1997.74 Between 1990 and 1997, according to the World
Health Organization’s World Health Report 1999, the malaria mortality rate in Sub-Saharan
Africa increased by 17 deaths per 100,000 (from 148 to 165 per 100,000).75 Notably, that rate
exceeded the increase in the region’s (total) crude death rate (which increased from 1,541 to
1,552 per 100,000 between 1990 and 1997) of 11 per 100,000 during the same period.76 That is,
despite the AIDS epidemic, but for the increase in malaria deaths, Sub- Saharan Africa’s
mortality rate (and life expectancy) might have held their own during that period. Nevertheless,
the fact that life expectancy in the Sub-Saharan countries still exceeds the 20–30 years that was
typical prior to globalization indicates that, despite the AIDS epidemic and the resurgence of
malaria, the net effect of globalization has been positive as far as life expectancy is concerned.
This conclusion—hinted at in Figure 2 by the upward displacement in the life expectancy curve
as we move from 1962 to 1997—is reinforced by Table 1, which shows that life expectancies are
much higher in many developing countries than they were in today’s developed countries (such
as the United States) at equivalent levels of economic development.
Child Labor
62
Figure 5 shows that the proportion of Children in Workforce (%) children in the workforce has
also been declining steadily for each of the income groups, and the richer the group, the lower
that percentage. Gaps in child labor between Sub-Saharan Africa, the low- and middle income
countries, and the high-income OECD countries have been shrinking at least since 1960. For this
indicator also, the gap between high-income OECD and middle income countries has diminished
the most; the gap between the former and Sub-Saharan Africa has diminished the least.77
Human Development Index (HDI)
Broad improvements in life expectancy, literacy, and economic growth have combined to
increase the HDI for most countries. Figure 6, based on the UN Development Program’s Human
Development Report 2001, shows that since 1975—the first year for which that report provides
data—the population- weighted HDI has improved for the so called high-, middle-, and lowdevelopment tiers of countries, as well as for Sub-Saharan countries (two-thirds of which are
also included in the low-development tier). Note that in this figure the HDI scale tops out at
one unit. Nevertheless, despite the broad improvement for the various groups of countries,
some countries’ HDIs have deteriorated in the past decade or so. According to the UNDP’s
Human Development Report 2001, of the 97 countries for which data are available for 1975 and
1999, Zambia has the dubious, but unique, distinction of having a lower HDI in 1999 than in
1975 because both GDP per capita and life expectancy declined over this period. The presence of
refugees from conflicts in neighboring countries may have contributed to these declines.
Curiously, in terms of aid as a fraction of GDP, at 22.8 percent, Zambia is also among the
world’s largest recipients of foreign aid.78 Thus, its downward spiral can hardly be attributed to
globalization or to rich countries having enriched or improved themselves at the expense of the
poor. Moreover, of the 128 countries for which data were available, 18 countries, or 15
percent—10 Sub-Saharan HDI and 8 EEFSU countries—had lower HDIs in 1999 than in 1990.
Life expectancy in each of the 10 Sub-Saharan countries declined during this period mainly
because of HIV/AIDS or malaria, or both; in all but two cases, per capita GDP also declined.
During this period, most of those countries also were directly or indirectly affected by civil
unrest or spillovers from conflicts in neighboring countries, which further strained their
resources. Per capita income declined in all eight EEFSU countries while life expectancies
dropped in six of the eight. All else being equal, one would have expected that HDI
improvements would generally be largest for the lowest tier and least for the highest tier of
countries because the latter are closer to the top of the HDI scale and because with each
improvement in HDI it becomes harder to improve it further (just as each additional dollar adds
less to the quality of life than the previous dollar). But in fact, as Figure 6 shows, between 1975
and 1999, the middle-tier countries saw the most progress, followed, in order, by the low-tier,
high-tier, and Sub-Saharan countries. As a result, the HDI gap between the high- and mediumtier countries diminished the most. The gap between high- and low-tier countries also declined
slightly, but, for the reasons discussed above, the gap between the high-tier and Sub-Saharan
countries expanded.
Summarizing the Trends
The well-being of the vast majority of the world’s population has improved and continues to
improve. Because of a combination of economic growth and technological change, compared to
a half century ago the average person today lives longer and is less hungry, healthier, more
educated, and more likely to have children in a schoolroom than in the workplace. During that
63
period, indicators of well-being have improved for every country group, although life
expectancies have declined in many Sub-Saharan and EEFSU countries since the late 1980s
because of HIV/AIDS, malaria, or problems related to economic deterioration. For every
indicator examined, regardless of whether the rich are richer and the poor poorer, gaps in human
well-being between the rich countries and other income groups have for the most part shrunk
over the past four decades. However, comparing rich countries and Sub-Saharan Africa, although
the gap in infant mortality between the two has continued to close, the gap in life expectancy
has expanded in the past decade or so (but not enough to erase the large improvement made
previously). Despite this, in aggregate, the corresponding gap in HDI has decreased.
Globalization and Inequality
Conventional wisdom decries income inequality, but there may be situations where some
inequality would benefit humanity. Consider, for instance, that since most of the easy
improvements in public health have been largely captured (except where globalization has
lagged), the search for and implementation of cures and treatments for today’s unconquered
diseases (such as strokes, heart disease, and cancers) could become progressively more
expensive. Richer societies are in a better position to invest in the research and development of
new or improved technologies in general, and technologies for detecting, treating, or eliminating
these diseases in particular. AIDS is a case in point. Moreover, new technologies are often
relatively costly initially. The rich, therefore, are usually the first to obtain new or innovative
technology. As the rich purchase this technology, the supplier can increase production and its
price drops because of economies of scale and learning by doing, if nothing else. Such declines
allow the less wealthy to also afford that technology, which then paves the way for further price
drops and induces people of more modest means to enter the market. Thus, arguably, wealth
inequality spurs the invention, innovation, and diffusion of new technologies. This pattern has
been repeated time and again for goods and services (such as telephones, VCRs, personal
computers, and even vacations to exotic places) as well as health technologies (such as
antibiotics, organ transplants, and, now, AIDS treatments). Innovations were expensive at first
but their costs came down. Therefore, some inequality in wealth probably benefits humanity.
Presumably, for a given set of supply and demand characteristics for a particular technology,
there is an optimum level of income inequality that would maximize the rate of adoption of that
technology, as well as the rate at which it improves human well-being. In other words, even if
one were to ignore trends in inequalities in other, more significant indicators of human wellbeing, income inequality is a poor lens for viewing the merits of globalization.
Without restricting himself only to income inequality, Nobel prize–winning economist Amartya
Sen claims that inequality is the central issue with respect to globalization and that a “crucial
question concerns the sharing of the potential gains from globalization, between rich and poor
countries, and between different groups within countries.”79 If one accepts Sen’s contention
regarding the centrality of inequality, the data presented and discussed in this paper indicate that,
whether or not income inequalities have been exacerbated, in terms of the truly critical measures
of well-being—hunger, infant mortality, life expectancy, child labor—the countries of the world
are much closer to being equal now than they were a few decades ago. But in the past dozen
years the life expectancy gap between the richest and some of the poorest countries has
expanded.
64
Therefore, it might be argued that, with respect to this most significant of all indicators at least,
globalization might yet fail Sen’s “crucial question.” But it is no more reasonable to expect that
globalization would lead to equal gains among countries than, say, that a course in economics
would lead to equal gains in knowledge for all students. Sen, for instance, benefited much more
from his education than did his classmates, not because someone else gained less but perhaps
because of better preparation, harder work, or even greater natural ability. Just as unequal
sharing of benefits or outcomes does not indict education, unequal progress in human well-being
does not damn globalization. In fact, Figures 1 through 6 suggest that where gaps in well-being
have expanded, it is not because of too much globalization but because of too little. The rich are
not better off because they have taken something away from the poor; rather, the poor are better
off because they have benefited from the technologies developed by the rich, and their situation
would have been further improved had they been better prepared to capture the benefits of
globalization. To the extent the rich can be faulted, it is that, first, their demonization of DDT—
and here globalization is culpable—also affected attitudes in the developing countries.80 That
contributed to the resurgence in malaria during the 1980s and 1990s, because of which mortality
rates are higher—and life expectancy lower—in Sub-Saharan Africa than they would otherwise
have been. Second, and perhaps more important, by protecting favored economic sectors through
subsidies and import barriers —activities that have not necessarily improved their own economic
welfare—the rich have retarded the pace of globalization and made it harder for many
developing countries to capture its benefits.
Notes
1. See, for example, Kevin Watkins, Aart Kraay, and David Dollar, “Point/Counterpoint:
Making Globalization Work for the Poor,” Finance and Development 39, no. 1 (March
2002), pp. 24–28; Martin Khor, “Backlash Grows against Globalisation,” 1996,
www.globalpolicy.org/globaliz/bcklash1.htm; W. Bowman Cutter, Joan Spero, and
Laura D’Andrea Tyson, “New World, New Deal,” Foreign Affairs (March–April 2000):
80–98, www.foreignpolicy2000.org/library/issuebriefs/readingnotes/fa_tyson.html ;
Bernard Wasow, “New World, Bum Deal?” Foreign Affairs (July–August 2000),
www.tcf.org/Opinions/In_the_News/ Wasow-NewWorld_BumDeal.html ; Jay Mazur,
“Labor’s New Internationalism,” Foreign Affairs (January– February 2000): 79–93; “The
FP Interview: Lori’s War,” Interview originally published in Foreign Policy (Spring
2000), www.foreignpolicy.com/best_of_fp/articles/wallach.html ; and United Nations
Development Program, Human Development Report 1999 (New York: UNDP, 1998), pp.
3, 11.
2. Cutter, Spero, and Tyson.
3. David Dollar and Aart Kraay, “Spreading the Wealth,” Foreign Affairs (January–
February 2000), www.foreignaffairs.org/articles/Dollar0102.html (visited May 26,
2002). Xavier Sala-i-Martin finds that both world poverty rates and global income
inequality have declined substantially in the past 20 years. Xavier Sala-i-Martin, “The
World Distribution of Income,” National Bureau of Economic Research working paper
no. 8933, May 2002, www.papers.nber.org/tmp/ 32723-w8933. pdf.
4. For instance, Stephen Lewis, a leading Canadian New Democratic Party politician,
former Canadian ambassador to the United Nations, and erstwhile deputy executive
director of UNICEF, is quoted as having said: “There is something profoundly wrong
with globalization. . . . There is more to the world than creating bigger markets. We can’t
65
5.
6.
7.
8.
ignore the human dimension.” Quoted in Ryan Smith, “Lewis Flays Globalization,”
University of Alberta Express News, January 29, 2001, on file with author. Similarly, Lori
Wallach, an anti-globalization organizer who came to prominence during the Seattle
protests, notes: “The question is, what is going on in real measures of well-being? So,
while the volume, the flow of goods, may be up, and in some countries gross national
product may be up, those macroeconomic indicators don’t represent what’s happening for
the day-to-day standard of living for an enormous number of people in the world. That
gets to one of the biggest critiques of the WTO in its first five years, which is that while
the overall global flow of trade continues to grow, the share of trade flows held by
developing countries has declined steadily. Similarly, over that five-year period, while
the macroeconomic indicators have often looked good, real wages in many countries
have declined, and wage inequality has increased both within and between countries.”
“The FP Interview.”
Zach Dubinsky, “Amid the Tears: Protesters, Police, Politics and the People of Quebec,”
Cleveland Free Times, April 25–May 1, 2001. This slogan is reminiscent of the title of a
book by Eric A. Davidson, You Can’t Eat GNP: Economics As If Ecology Mattered
(Cambridge, Mass.: Perseus, 2000).
Indur M. Goklany, Economic Growth and the State of Humanity (Bozeman, Mont.:
Political Economy Research Center, 2001), pp. 6, 10–19; and Indur M. Goklany, “The
Future of the Industrial System,” Paper presented at International Conference on
Industrial Ecology and Sustainability, University of Technology of Troyes, Troyes,
France, September 22–25, 1999.
James Gwartney and Robert Lawson with Walter Park and Charles Skipton, Economic
Freedom of the World: Annual Report 2001 (Vancouver, B.C.: Fraser Institute, 2001);
David Dollar and Aart Kraay, “Growth Is Good for the Poor,” World Bank, Development
Research Group, 2000, www.worldbank.org/research/growth/absdollakray.htm ; James
Gwartney, Randall Holcombe, and Robert Lawson, “The Scope of Government and the
Wealth of Nations,” Cato Journal 18, no. 2 (1998): 163–90; Seth W. Norton, “Poverty,
Property Rights, and Human Well-Being: A Cross-National Study,” Cato Journal 18, no.
2 (1998): 233-45; and Robert J. Barro, The Determinants of Economic Growth: A CrossCountry Empirical Study (Cambridge, Mass.: MIT Press, 1997). With respect to
democracy and economic growth, Barro, pp. 52–61, suggests that increased economic
growth tends to increase democracy (the so-called Lipset hypothesis), but democracy’s
effect on economic growth is mixed; apparently growth increases with democracy at low
levels of democracy but declines at high levels, perhaps because redistribution impulses
are harder to contain in democracies. This is echoed in William Easterly, The Elusive
Quest for Growth: Economists’ Adventures and Misadventures in the Tropics
(Cambridge, Mass.: MIT Press, 2001), pp. 265–67. See also Dani Rodrik, “Democracy
and Economic Performance,” Harvard University, Kennedy School of Government,
December 14, 1997, www.ksghome.harvard.edu/~.drodrik.academic.ksg/demoecon.PDF
; and Francisco L. Rivera-Batiz, “Democracy, Governance and Economic Growth:
Theory and Evidence,” undated, www.columbia.edu/cu/economics/discpapr/DP0102–
57.pdf.
Figure 1 is based on cross-country analyses reported in Goklany, Economic Growth and
the State of Humanity, and Indur M. Goklany, The Precautionary Principle: A Critical
Appraisal of Environmental Risk Assessment (Washington: Cato Institute, 2001), pp. 23,
66
76–78. The data used to generate this figure are from World Bank, World Development
Indicators 1999 (Washington: World Bank, 1999) except for daily food supplies per
capita, which are from World Resources Institute, World Resources 1998–1999
(Washington: World Resources Institute, 1998). Each of the curves in Figure 1 is based
on a best-fit equation generated using log-linear regression of the indicator on the (log of)
per capita income (estimated as gross do estic product per capita), with the exception of
the infant mortality curve, which was generated using a log-log regression. The curves
representing access to safe water and literacy were truncated at 100 percent, while the
child labor curve was truncated at 0 percent. The slopes of each of the regression lines
were significant at the 0.1 percent, or better, level. The number of data points (N) and R2
for the indicators were as follows: 148 and 0.645 for life expectancy, 147 and 0.745 for
infant mortality, 150 and 0.629 for daily food supplies per capita, 96 and 0.520 for
literacy, 51 and 0.549 for access to safe water, and 140 and 0.534 for child labor.
9. For example, 100 percent for literacy and access to safe water and 0 percent for child
labor (measured as the percentage of children aged 10–14 years in the labor force).
10. See United Nations Development Program, Human Development Report 2001 (New
York: UNDP, 2001).
11. Jasper Becker, Hungry Ghosts: Mao’s Secret Famine (New York: Free Press, 1996).
12. Robert W. Fogel, “The Contribution of Improved Nutrition to the Decline of Mortality
Rates in Europe and America,” in The State of Humanity, ed. Julian L. Simon
(Cambridge, Mass.: Blackwell, 1995), pp. 61–71; Robert W. Fogel, The Fourth Great
Awakening and the Future of Egalitarianism (Chicago: University of Chicago Press,
2000), pp. 74–79; World Health Organization, World Health Report 1999 (Geneva:
WHO, 1999); Richard A. Easterlin, Growth Triumphant: The Twenty-First Century in
Historical Perspective (Ann Arbor: University of Michigan Press, 1996), pp. 46, 89–91;
and Indur M.Goklany, “Saving Habitat and Conserving Biodiversity on a Crowded
Planet,” BioScience 48 (November 1998): 941–53.
13. 13. World Health Organization, World Health Report 2000 (Geneva: WHO, 2000), pp.
176–83.
14. World Resources Institute, World Resources 1998–1999.
15. 15. U.S. Department of Health and Human Services, Office of Disability, Aging and
Long Term Care, Active Aging: A Shift in the Paradigm (Washington: HHS, 1997),
www.aspe.hhs.gov/daltcp/reports/actaging.htm ; see also Eileen M. Crimmins, Yasuhiko
Saito, and Dominique Ingegneri, “Trends in Disability-free Life Expectancy in the United
States, 1970–90,” Population and Development Review 23, no. 3 (1997): 555–72, 689–
90.
16. Ibid.
17. Joel Mokyr, The Lever of Riches: Technological Creativity and Economic Progress (New
York: Oxford University Press, 1990), pp. 174–76; Gwartney, Holcomb, and Lawson;
Barro, The Determinants of Economic Growth, pp. 19–23; Robert J. Barro, Education
and Economic Growth, www.hrdc-rhc.gc.ca/stratpol/arb/conferences/oecd/education.pdf
; and Easterly, pp. 71–84.
18. Easterlin, pp. 9, 79. Barro, Education and Economic Growth, pp. 20–21, suggests that
education of women at the primary level might increase economic growth by reducing
the total fertility rate, but his analysis does not show any significant effect on economic
growth due to secondary education for women, which, he opines, might be due to gender
67
discrimination. Dean Filmer and Lant Pritchett show that infant and child mortality
rates—indicators of public health—decline with women’s education. This might be a
mechanism through which women’s education helps spur economic growth. Dean Filmer
and Lant Pritchett, Child Mortality and Public Spending on Health: How Much Does
Money
Matter?
October
17,
1997,
www.worldbank.org/html/dec/Publications/Workpapers/WPS1800series/wps1864/wps18
64.pdf.
19. Not surprisingly, expenditures on research and development increase with per capita
GDP. Linear-regression analysis of cross-country data for 1994 from World Bank, World
Development Indicators 1999, shows that the slope is significant at the 5 percent level (N
= 53, R2 = 0.506). This analysis used GDP per capita for 1994 adjusted for purchasing
power parity. See also Indur M. Goklany, “Strategies to Enhance Adaptability:
Technological Change, Economic Growth and Free Trade,” Climatic Change 30 (1995):
427–49.
20. Easterlin, p. 46. However, as Mokyr, pp. 174–75, has pointed out, this may not always be
the case. See also Easterly, pp. 71–84.
21. Goklany, “Strategies to Enhance Adaptability”; and Goklany, “Saving Habitat and
Conserving Biodiversity.”
22. Easterlin, p. 161.
23. Fogel, “The Contribution of Improved Nutrition,” pp. 61–71; Fogel, The Fourth Great
Awakening, p. 78; World Health Organization, World Health Report 1999; Easterlin; and
Goklany, “Saving Habitat and Conserving Biodiversity.”
24. Fogel, The Fourth Great Awakening; and Easterlin.
25. Goklany, “Saving Habitat and Conserving Biodiversity”; Goklany, “Strategies to
Enhance Adaptability”; and Indur M. Goklany, “Potential Consequences of Increasing
Atmospheric CO2 Concentration Compared to Other Environmental Problems,”
Technology 7S (2000): 189–213.
26. Goklany, “Saving Habitat and Conserving Biodiversity”; and Goklany, “Strategies to
Enhance Adaptability.”
27. Dubinsky; and Davidson.
28. Goklany, “Saving Habitat and Conserving Biodiversity”; see also Lant Pritchett and
Lawrence H. Summers, “Wealthier Is Healthier,” Journal of Human Resources 31
(1996): 841–68.
29. World Bank, World Development Report: Investing in Health (New York: Oxford
University Press, 1993), pp. 17–21; Fogel, “The Contribution of Increased Nutrition”;
Easterlin, pp. 89–91; World Health Organization, World Health Report 1999; and Barry
Bloom, “The Future of Public Health,” Nature 402 (Supplement 1999): C63–64.
30. Easterlin, p. 90.
31. Harvard University Center for International Development and the London School of
Hygiene and Tropical Medicine, Economics of Malaria, Executive Summary, 2000,
www.malaria.org/jdsachseconomic .html.
32. World Health Organization, World Health Report 1999; and Fogel, “The Contribution of
Increased Nutrition.”
33. Goklany, Economic Growth and the State of Humanity, Figures 3 and 7, pp. 11, 18.
34. The cycle of progress is briefly described in ibid., pp. 26–31. See also Goklany, “The
Future of the Industrial System.”
68
35. See, for example, Barro, The Determinants of Economic Growth; Dollar and Kraay,
“Growth Is Good for the Poor”; Gwartney and Lawson; and Gwartney, Holcomb, and
Lawson.
36. Jeffrey A. Frankel and David Romer, “Does Trade Cause Growth?” American Economic
Review (June 1999): 379–99; Barro, The Determinants of Economic Growth; and Dollar
and Kraay, “Growth Is Good for the Poor.”
37. Goklany, “Strategies to Enhance Adaptability.”
38. Ibid.
39. A vivid example of the importance of trade in improving human well-being comes from
Iraq whose inability, because of trade sanctions, to fully operate and maintain its water,
sanitation, and electrical systems or to obtain sufficient food for its population has
contributed to a deterioration of public health and lowered life expectancies since the
Gulf War. The need to alleviate these problems was the basis for various UN Security
Council resolutions to extend its “Oil-for- Food” program. United Nations, “Security
Council Extends Iraq ‘Oil-for-Food’ Programme for Further 186 Days,” Press release
SC/6872, June 8, 2000, www.un.org/News/Press/docs/2000/20000608.sc6872.doc.html.
40. Goklany, “Strategies to Enhance Adaptability.”
41. Figure 2 is based on cross-country analyses reported in Goklany, Economic Growth and
the State of Humanity, pp. 11, 15, using data from World Bank, World Development
Indicators 1999. In this figure GDP per capita is based on constant (1995) dollars at
market exchange rates. As in Figure 1, the life expectancy curves are based on best-fit
equations generated using log-linear regressions. The slopes of both of these regression
lines are significant, that is, economic development leads to a statistically significant
improvement in life expectancy. Equally important, the change in the intercepts going
from 1962 to 1997 is positive and statistically significant at the 0.1 percent level. That is,
the upward displacement in the life expectancy curve between 1962 and 1997 (which can
be attributed to technological change over that period) is statistically significant.
42. Goklany, Economic Growth and the State of Humanity, pp. 7, 9.
43. 43. As in Figure 1, the two infant mortality curves are based on log-log regressions using
data from World Bank, World Development Indicators 2001 (Washington: World Bank,
2001). The slopes of each of these regression lines are statistically significant at the 0.1
percent level. More important, the change in the intercepts on the log (infant mortality)
axis going from 1962 to 1997 is statistically significant for this pair as well. See Goklany,
Economic Growth and the State of Humanity, pp. 13–34.
44. Ibid.
45. Paul Ehrlich, The Population Bomb (New York: Ballantine Books, 1968).
46. W. Paddock and P. Paddock, Famine 1975! America’s Decision: Who Will Survive?
(Boston: Little, Brown, 1967).
47. Based on FAOSTAT Database, www.apps. fao.org, from Indur M. Goklany,
“Agricultural Technology and the Precautionary Principle,” in Environmental Policy and
Agriculture: Conflicts, Prospects, and Implications, ed. Roger Meiners and Bruce Yandle
(Lanham, Md.: Rowman and Littlefield, forthcoming 2002).
48. Ibid.
49. Ibid.
50. UN Food and Agricultural Organization, “Assessment of Feasible Progress,” in Food
Security Technical Background Documents 12–15 (Rome: FAO, 1996), vol. 3.
69
51. UN Food and Agricultural Organization, The State of Agriculture 1996 (Rome: FAO,
1996); and UN Food and Agricultural Organization, The State of Food Insecurity in the
World 2001, www.fao.org/docrep/003/y1500e/y1500e00.htm.
52. Ibid.
53. Goklany, “Saving Habitat and Conserving Biodiversity”; Goklany, “The Future of the
Industrial System”; and Goklany, “Potential Consequences of Increasing Atmospheric
CO2 Concentration..
54. Ibid.
55. Ibid.
56. FAOSTAT Database 2001, www.apps.fao.org.
57. Goklany, “Strategies to Enhance Adaptability.”
58. K. Hill, “The Decline in Childhood Mortality,” in The State of Humanity, pp. 37–50.
59. World Resources Institute, World Resources 1998–1999.
60. Goklany, Economic Growth and the State of Humanity, p. 14.
61. Goklany, “The Future of the Industrial System.”
62. The country groupings in this and the following two figures are taken from the
classifications used in World Bank, World Development Indicators 2001.
63. Economic data are from Angus Maddison, TheWorld Economy: A Millennial Perspective
(Paris: OECD,2001); data on life expectancy (LE) and infant mortality (IM) for the
United States in 1913 are from U.S. Bureau of the Census, Historical Statistics of the
United States: Colonial Times to 1970 (Washington: Government Printing Office, 1975);
the LE and IM data for 1998 are from World Bank, World Development Indicators 2001.
64. Samuel H. Preston, “Human Mortality throughout History and Prehistory,” in The State
of Humanity, pp. 30–36.
65. Goklany, Economic Growth and the State of Humanity, pp. 7–15.
66. World Resources Institute, World Resources 2000–2001 (Washington: World Resources
Institute, 2000).
67. World Bank, World Development Indicators 2001.
68. Ibid.
69. For example, in 1998 Zambia lost more than twice as many disability-adjusted life years
to malaria as it did to HIV/AIDS. Personal communication from Richard Tren, May 14,
2002, based on statistics from Zambia’s Central Board of Health. The malaria mortality
rate in Sub- Saharan Africa, which stood at 184 per 100,000 in 1950, had declined to 107
in 1970. That decline continued until the 1980s, but by 1997 it had rebounded to 165; by
contrast, in the rest of the world it declined from 39 per 100,000 in 1950 to 1 per 100,000
in 1997. World Health Organization, World Health Report 1999, p. 50.
70. Goklany, The Precautionary Principle, pp. 9–10 and references therein.
71. Rachel Carson, Silent Spring (Cambridge, Mass.: Houghton Mifflin, 1962).
72. Roger N. Bate, “How Precaution Kills: The Demise of DDT and the Resurgence of
Malaria,” in Perilous Precaution: The Folly of Disregarding Science, ed. Roger N. Bate
(Cambridge: European Science and Environment Forum, 2002), pp. 70–82; Wallace
Chuma, “A Renewed Role Sought for DDT in Malaria War,” Pittsburgh Post Gazette,
July 21, 2002, www.post-gazette.com/healthscience/20020721malaria3.asp ; and
Goklany, The Precautionary Principle, pp. 13–18.
73. Bate; Chuma; and Goklany, The Precautionary Principle, pp. 13–18.
70
74. World Health Organization, World Health Report 1999, p. 50. It’s unclear whether the
mortality rate was age adjusted for a standard population distribution. However, the
change in this distribution between 1990 and 1997 is unlikely to have modified the
increase in mortality rate by much.
75. Ibid. This increase in the mortality rate alone translates into an increase of more than
100,000 additional malaria deaths in 1997.
76. World Bank, World Development Indicators 2002.
77. World Bank, World Development Indicators 2001.
78. ”Emerging-Market Indicators: Net Official Aid,” The Economist, March 23–30, 2002, p.
102.
79. Amartya Sen, “A World of Extremes: Ten Theses on Globalization,” Los Angeles Times,
July 17, 2001, www.globalpolicy.org/globaliz/define/0717amrt.htm.
80. Deepak Lal has warned against rich countries imposing their values on poor countries. “If
the West ties its moral crusade too closely to the emerging process of globalization,” he
writes, “there is a danger that there will also be a backlash against the process of
globalization.” Deepak Lal, “The Challenge of Globalization: There Is No Third Way,”
in Global Fortune: The Stumble and Rise of World Capitalism, ed. Ian Vásquez
(Washington: Cato Institute, 2000), p. 40.
Edwin Meese, III, Chairman for Judicial and Legal Studies, The Heritage Foundation;
Former US Attorney General
It is a pleasure for me to be here and to join my colleagues in welcoming you here to Heritage.
I've been asked to talk about the rule of law, and I know that you've been told a lot of things both
yesterday and today, but I think two of the essential requisites for growth and opportunity of an
economy in any country is number one free markets and secondly the rule of law. These two
concepts really go together and that's what I’d like to talk about today. The free market system is
basically that the individual decisions of thousands, perhaps in some cases even millions of
people, is a better indicator of what the economy ought to do, than the command and control type
of regulation of the economy by a governmental entity or by anyone else that has what you might
call top down direction of the economy.
You've already heard, I believe, about the Index of Economic Freedom, and it talks about this
combination of rule of law and free markets, free enterprise systems. The interesting thing in the
book that you'll find in talking about a free market system the various components that have to
do with that and the criteria on which this book and the rating of the various countries is based
are things like the trade policy - the ability of a country to engage freely in trade, the fiscal
burden of government - to what extent the government taxes the businesses and the people of the
country, the amount to which the government intervenes in the economy through regulation,
monetary policy - whether it's stable or whether it is subject to ups and downs in terms of
monetary policy which can have a disastrous effect upon the economy, capital flows and foreign
investment - the ease with which money can be invested in a country and its businesses, the
banking and finance system, wages and prices, property rights, regulation and whether or not
there's a black market. It's really a systematic analysis of these various factors that demonstrate
that the countries with the highest levels of economic freedom are also those that have the
highest living standards. Corollary to these different components of a free market system is, of
71
course, this rule of law, and just like the free market system imposes constraints and limitations
on government, the rule of law also imposes certain constraints and limitations on government.
When we say that we're talking about the rule of law, we're talking about a rule that is opposed to
such things as arbitrariness, favoritism and unfairness. Basically, what is essential is that the
kinds of things that are necessary for a successful economy depend essentially on the rule of law.
Whether people are investing money in an economy in one way or another (through business, the
banking system or otherwise) and also the people themselves in terms of investing their own
labor, rule of law is critical in order to have the kind of investment of both capital in the sense of
financial capital and also of human energy and contribution. People are not going to want to
work vigorously and produce for a system that does not have essential fairness, which is the
essence of the rule of law. The key to the rule of law and its relationship to investment is
predictability. Before someone is going to risk their money by putting it into a business or by
investing in a particular country in a business, they want to know what's going to happen to that
money. They want to be able to predict what's going to happen in terms of various criteria.
Some of the principles of the rule of law that are important are (1) Consistency - the same rules
apply across the board and will apply on a continuing basis; (2) Continuity - the fact that ten
years from now or five years from now, people will be under basically the same rules and if there
are changes in rules, they are done in a way in which people can have input as to the direction
that change is going to go, so that you're not subject to arbitrary changes in rules from one day,
week or month to another. All of which is a key to this element of predictability; and (3)
Impartiality - the important requirement in a fair economy and for the rule of law is equal
application of the law. There's not one favorite group or one favorite individual, or that the law
is not going to be applied differently to one person who comes before a court or before some
other regulatory body against another. So that people can be confident that they will be treated
impartially. Now, what are the components of rule of law? Well one of the most important which is critical again to this predictability and the willingness to invest - is the sanctity of
contracts. The idea that if people make an agreement (usually in writing), that contract will in
fact be enforced, so that a person can depend upon the agreement they made on this date,
throughout the term of the contract. Without that confidence and predictability, very few people
are going to enter into agreements particularly when they are risking something (whether it be
their labor or their money) and enter into that contract unless they know in fact that that contract
will be respected, not only by the other parties to the contract but by government and those that
might be in a position (like courts) to enforce the contract. A second component has to do with
property rights. Property rights are absolutely critical to the rule of law. When the founders of
the United States came together as to what were the three essential ingredients of liberty, they
were life - the ability for a person to live without being attacked by government, liberty - the
ability to go about your business in a way unhindered by others, and property - the right to own
property, to dispose of property, to utilize property for your benefit, the benefit of your family
and so on. So that's why property rights become a very important component. In this book, the
Index of Economic Freedom, it says it very well. It says, "the ability to accumulate private
property is the main motivating force in a market economy, and the rule of law is vital to a fully
functioning free market economy. Secure property rights give citizens the confidence to
undertake commercial activities, to save their income and to make long term plans because that
they know that their income is safe from expropriation. A key to whether an economy is sound or
not is the extent to which the government protects private property by enforcing the laws and
72
how safe private property is from expropriation." Private property then becomes one of the
critical things that is a part of the rule of law. Some of the factors regarding property rights that
are mentioned in the Index are the freedom from government influence over the judicial system,
that is an (1) independent judiciary. A judiciary that is not subject to whatever body may be
ruling the country at a particular time, but will enforce the laws in the same way no matter who
the rulers happen to be; (2) A commercial code defining contracts, that is a body of law that
explains how contracts will be protected and how they'll be enforced. The sanctioning of foreign
arbitration of contract disputes, and this is particularly important to developing countries because
most developing countries are absolutely dependent upon foreign investment for at least a
portion of their ability to function as an economy, and some system for the arbitration of disputes
with people from other countries is an important protection of property rights; (3) Protection
against government expropriation of property - I mentioned that earlier, but the whole idea is the
critical aspect of the government not being able under this rule of law and under this system of
law in a particular country to go in and simply take other people's property from them without
due compensation or some legal process that enables them to do so with the sense of fairness and
impartiality. The protection of the right to private property so that it cannot be taken away either
by government or by someone that's stronger than you - your neighbor or someone else that
wants to infringe on your private property. Besides contracts and besides private property,
another aspect is also the ability to obtain and keep or repatriate profits, particularly if you're a
foreign investor. The confidence that if your business that you've invested in a particular country
is making a profit that you will benefit from those profits and be able to take those profits out of
the country to wherever you happen to be, or if you're in the country to move the profits from
wherever they are earned into whatever part of the country you plan to live in and do business in.
This is the general concept of the rule of law. An important part of the rule of law is an effective
judiciary. There needs to be a body that will enforce the law and will apply the rule of law to
specific situations and will stand up for the rights of individuals whether it be under contracts or
private property concepts or wherever it happens to be. That's where you need a judiciary. In
the United States, we're very proud of the fact that we developed one of the first independent
judiciaries. A judiciary that was not subject to the President and not subject to the Congress. We
had two protections written into our constitution for judges to secure their independence from
whatever the political situation might be at a particular time. One is a lifetime appointment or as
the constitution says appointment during good behavior. As long as the judges do not
themselves violate the law, they have essentially lifetime appointments. The second is that the
judge's compensation (their salary and benefits) cannot be reduced during their term in office
because our ancestors had an experience back in the 1700s with the way in which the King of
England was able to control the judges. If he didn't like the decisions they were making, he
would stop paying them so it was written into the Constitution that you can't decrease the
compensation of the judge during the term in office. These two elements lifetime appointments
and no reduction of compensation have made for our independence. There are a lot of different
ways it can be done. The states do it differently. They have elections of judges and so on, but
the fact that you have a judiciary that is sufficiently constituted that it can protect the rule of law
and that it is immune essentially from political forces is a very important part of the rule of law.
The judiciary needs to be reliable. You need to be able to rely again on it putting forth the
components mentioned earlier of consistency and continuity. It has to be impartial obviously,
and it should be efficient which means that the courts should make its decisions without undue
delay. We have a saying that justice delayed is justice denied. Even if you win a case and it's
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taken you five years to get that judgment. In that period of time, the amount of money have been
deprived of or rights you've been deprived of during the time prior to that decision in itself can
defeat the ultimate decision because by that time it might not make any difference. So, effective
and efficient judiciary courts are very important as well. They should operate with a minimum
of cost (particularly cost to the litigates) as well as a timely fashion so that you can obtain a
decision and have your rights vindicated in a prompt manner. One of the key things that is
absolutely critical to the rule of law is the prevention of corruption and the necessary steps to
both prevent corruption occurring and to rapidly get rid of corrupt officials. A corrupt court or a
court that can be influenced by a bribe or by political people and anything that relates to
corrupting a fair and impartial decision is absolutely anathema. It's not just the courts, it needs to
be removed from the entire governmental system and from any institutions or people that have to
do with the economy. There needs to be a lack of corruption throughout the governmental
bureaucracy. If a person has to put money under the table in order to get a permit to do business
or if a person who is stopped for a traffic infraction can buy his or her way out of it by bribing
the officer, the concept of the rule of law is destroyed because then one person will get privileges
that another person won't. It also destroys the integrity and the honesty of the system,
particularly those that are in a position to render services in customs, police and those other kinds
of situations where they have a great deal of power over the individual or over a business.
Finally, let me say that there is also a relationship between regulation and the rule of law. The
less regulation that a government imposes upon its people and its businesses, beyond that
necessary for a reasonable protection of the health and safety of the population, the more
regulation there is the more opportunity there is for corruption and the more opportunity there is
for the violation of the rule of law. So when we talk about a free market system as a necessary
component of a fair economy, the two go hand in hand. The absence of regulation - besides
being one of the criteria that indicates the freedom that a business has - is very important in terms
of having the obedience and the probability that the rule of law will be followed. All of this has
to do then with the basic foundation for good business opportunities and for the chances of
growth, expansion of the economy and the betterment of the society, which it serves. When you
get right down to it, it is indeed first freedom and secondly as a part of that freedom the rule of
law as a means of sustaining it. The rule of law is one of the absolute essentials to any economy
which is looking towards growth and providing an opportunity for its expansion.
Thank you.
Aleta Williams, Education Advisor, Bureau for Africa, USAID
Distinguished guests, ladies and gentlemen. First. I would like to begin by thanking Fred
Oladeinde and the Foundation for Democracy in Africa for inviting me to speak today.
I am not a trade expert or versed in the intimate details of AGOA, but I know that you have had
two days of stimulating presentations from many experts in this field and rich dialogue on a
myriad of issues. So, I will gladly refrain from quoting statistics or risk boring you with
repetitious facts and unsolicited advice. Instead, I would like to talk to you about two things I do
know-----first, the role of NGOs in promoting economic development and in facilitating Africa's
transition into the global market economy. Second, I’ll begin my remarks with a brief
examination of the challenges facing Africa today, then give you a glimpse of what we are doing
at USAID's Africa Bureau in the field of education for Africa to respond to the many
opportunities before them.
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When one talks of important issues such as trade or economic development and global market
economies, it is impossible not to mention the inextricable link to education. After all, education
is key to all development. It is the foundation and the main ingredient in sustaining democracies,
improving health conditions, increasing per capita income, and reducing inequalities. The
individual and social impacts of these gains are absolutely essential to a country’s economic
growth. In fact, education may be the highest yielding investment a country can make because
the knowledge and confidence generated by this investment enables individuals and societies to
be creative in developing new opportunities for economic development as education levels rise,
thus continuing a virtuous spiral that reinforces and deepens the benefits.
However, the education challenge in Africa is significant--- centering primarily on issues of
access and quality. Sub-Saharan Africa has the lowest rate of primary school enrollment in the
world; with 40 percent of children aged 6 - 12 not in school and 60 percent of these children not
able to attend school are girls. Half of those who do attend drop out before completing primary
education. Studies show that of those who do complete, only one-fourth of them acquire the
basic competency in reading, writing and math. The system is challenged with severe teacher
shortages, inadequately trained teachers and administrators, lack of appropriate learning
materials and is further crippled by the HIV/AIDS pandemic. What this all means is that
Africans are disadvantaged in an increasingly fast-paced and technologically driven world and
they will continue to suffer on the margins of the global economy unless access to a quality
education is improved. A quality education imparting literacy, numeracy and critical thinking
skills is essential to promote good health and life opportunities, build national prosperity and
stability, and allow Africans to participate in the global economy.
What has USAID done to address these challenges and opportunities? Over the past decade,
USAID has invested in basic education programs in 16 countries in sub-Saharan Africa. As a
result of these investments, since 1990, we have witnessed significant enrollment gains and
greater equity for girls. In 2000 there were 12 million more children enrolled in primary school
than in 1990.
I’d like to give some examples of support under the Education for Development and Democracy
Initiative (EDDI):
The American and African Business Women’s Alliance to create a network to support and
facilitate linkages and business opportunities for women on the continent.
The Economic Entrepreneurial Development Center – a regional project for Sub-Saharan Africa
which is building African human capital to help increase business, trade and commercial
interactions between Africa and the United States and to better integrate Africa into the global
economy. This program includes internship opportunities for African youth, a women's
fellowship program, the International Business Academy for entrepreneurs eager to market their
services/goods internationally; an Innovation Award, which recognizes creative business
ventures; and a newly established business incubator program, which assists small business
owners to hone their skills and develop their businesses. The program has a target to ensure that
one third of all participants are women. Of the $5 million dollars invested, $2 million was used
to establish an endowment to ensure the long-term sustainability of the center.
Four
distinguished African fellows have been selected to enroll at Georgia State University in January
2004 to receive special training in operating the Center as part of the plan to transition to African
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management. This program has done a tremendous job of leveraging support from the private
sector and various NGO partners in all of the countries that it has implemented programs.
As you all know, the AGOA/NGO forum in Mauritius in December 2002 brought together
business leaders, NGOs and policymakers to explore various topics, including the Role of
Women in Benefiting African Society. The Ambassador Girls Scholarship Program provided
more than 26,000 scholarships as well as mentoring for African girls in 38 countries, including
many affected by HIV/AIDS, some with physical handicaps and from other marginalized
communities---all with the assistance of local NGOs as implementers. I would like to share with
you two very quick examples of the creative ways in which the programs have built in
sustainability and are planting the seeds for budding entrepreneurs. First, the MICA project in
Niger, in addition to offering scholarships to needy girls also teaches entrepreneurship through
its mentoring component. This program has a micro-business component---one ox and a cart
provided to villages to use as an ambulance or transport to get goods to and from local markets.
The money earned from this enterprise helps to sustain the scholarship and mentoring program.
Second example is the Masaai Education Discovery program in Narok, Kenya. Through its
Community Resource and Technology Center, MED's program includes a girls' scholarship and
mentoring program supporting 300 recipients; a continuing education program, with information
technology training, Internet access and distance learning; a community library with over 20,000
books; and an arts center, which contributes to the sustainability of its scholarship program. I
would like to just briefly read to you an excerpt from a recent article on MED:
Valentine Nkoyo, 18-year-old Maasai girl who survived an early marriage when she was 12
years old, has nearly completed her high school education in a nearby school. She comes often
to the center to access the Internet, go through social mentoring and career counseling sessions,
among other educational programs offered at the center.
Her self-esteem is high. "My future is now very secure because I know what I want in life," she
said, brimming with a confidence not common among the average girls of her age in Africa.
Nkoyo wants to be a pilot and she believes the computer -- tucked away 80 miles from the
Kenyan capital Nairobi in a remote, semi-urban African village -- will facilitate her achieving
the ambitious dreams.
Hellen Masiyio has completed high school. She is now in charge of the facility's Arts Center,
where students do beading work for sale to enable the sustainability of the project. Hellen wants
to be a diplomat. "I want to study international relations," she told me.
Once the center's distance learning program starts in early January, students and the people of
Narok area will be able to study degree programs from the comfort of their classrooms, their
homes and in open savannahs while herding their cattle, sheep and goats.
It has also enabled the Maasai girls to have a positive attitude towards education and expanded
their understanding of modern day life dynamics and how they can be participants rather than
just onlookers.”
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Continuing with our investments in technology---We’ve supported Community Resource
Centers (CRCs), which are multi-faceted technology centers that have provided out-of-school
youth, members of the business community, teachers, parents, and civil society groups access to
computer training, the Internet and business services. For example, in Zambia, through
collaboration with the US Department of Agriculture, a local NGO is working with women
farmers to use the technology at the satellite centers located in rural communities for pricing
commodities, improving crop production and accessing information on potential markets.
Finally, I would be remiss if I did not mention the tremendous collaboration of judicial
professionals in the U.S. and Africa. The African Judicial Network (AJN) - made up of African
and American jurists and judicial professionals promotes dialogue and collaboration for
improving court systems and promoting the rule of law, thus creating a enabling environment for
business to grow.
As you may know, in June 2002, President Bush acknowledged “literacy and learning” as the
“foundation of democracy and development" and announced the creation of a $200 million
program, the Africa Education Initiative (AEI). Through this initiative, over the next 5 years,
more than 160,000 new teachers will be trained and the skills of 260,000 existing teachers will
be improved through in-service training. In addition, more than 4.5 million more textbooks and
other learning materials will be provided to schools in Africa and 250,000 scholarships will be
awarded to girls and other vulnerable children. Central to these programs will be HIV/AIDS
mitigation and prevention, and increasing the role of parents and communities in children's
education.
Now---a few thoughts on the role of NGOS. AGOA is designed to favor trade and investment
between Africa and the US, and by so doing, in some cases boost and in other cases jumpstart
some African economies. As a trade initiative that works essentially government to government,
and then drills down to the private, for-profit sector, it might seem difficult at first glance to see a
clear role for NGOs. One role for NGOs is clear, and it centers on capacity building for small
and medium-sized African businesses, to help them take maximum advantage of AGOA’s
provisions. However, I believe that there is an equally important role for NGOs to use their
competitive advantage to attract and sustain the active participation of a wide range of actors in
society, thereby creating a dynamism that makes people more inclined to be involved---whether
in social, political or economic affairs. NGOs, regardless of their focus provide an accessible
mechanism for engaging, training and facilitating, as illustrated by the few examples that I
provided earlier.
So, I think it is safe to say that the work that we do to create an enabling environment for trade
and economic prosperity centers on providing the requisite human and institutional capacity. In
doing so, we are reaching out to marginalized communities to ensure that the net has been cast
widely enough to tap the full potential of a country’s resources. Condoleeza Rice, appropriately
stated that, “Information and knowledge are powerful tools, and prosperity flows to those who
can tap the genius of their people.” The challenge for all of us---business--NGOs---government
is to ensure that we continue to support the foundation that will provide a constant stream of
educated and capable actors. And just as education has "enabled" the environment for economic
prosperity and for Africa to begin to reap the full benefits of the global marketplace, so too must
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the business community continue to invest in education. It is a self-serving, win-win proposition
that has the potential to transform individual lives and entire societies.
Thank you.
Dr. Lynette Lashley, Chair – Communication Arts, Indiana University-South Bend
Publicizing Sub-Saharan African Trade and Investment Opportunities in the United States Via
Public Relations
Public relations is an organization's efforts to win the cooperation of groups of people through
publicity. In the 21st century, public relations practice has become an international phenomenon.
The opportunities for public relations are increasing because of the growth in information
technology, which increases interaction among organizations, and publics in the world,
necessitating the need for international public relations (Seitel 2004).
The expansion of communications technology has increased the
dissemination of information about products, services, and
lifestyles around the world, thus creating global demand (Seitel,
2004) p. 378.
Public relations methods, therefore, are viable for disseminating valuable information costeffectively, internationally.
In recent times, there has been the realignment of economic power, caused by the formation of
multinational trading blocs, such as the N. American Free Trade Agreement (NAFTA), Asia
Pacific Economic Conference (APEC), Organization of African Unity (OAU), and the European
Economic Community (EEC). These alliances have brought global producers and consumers
closer, many times through using public relations methods. The move to form trading alliances
has focused new attention on public relations (Seitel, 2004) AGOA and other organizations,
therefore, can use Public Relations methods to assist in expanding trade and investment
opportunities with the United States through publicity. How publicity works will be explained
later on in the paper.
Africa has recognized the power of public relations, and the practice has been growing. "In
1990, the largest public relations meeting in the history of the continent was held in Abuja,
Nigeria with 1,000 attendees from 25 countries." (Seitel,2004) p.385. Through public relations
methods, organizations in the United States could be informed about the products and services of
sub-Saharan African countries cost-effectively.
In the US, public relations and the media have a symbiotic relationship. The media must have
material and ideas from public relations sources, and public relations practitioners must have the
media as a place to send information that can be converted to stories for publicity (Wilcox et. al,
2003). They depend on each other. From this, one can see how using public relations methods
can help disseminate information about trade and investment opportunities in sub-Saharan
African countries. Such information, if properly packaged in news releases, has the potential to
be used by the United States media and publicized.
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If news editors deem the information newsworthy, it is published. This publicity appears as
news, and is regarded as objective. This information is much better than advertising, which is
self-serving and costly. (With advertising, the organization controls what is said, how much
space is needed, where the advertisement should appear, how many times it should run).
Information via advertising suffers from low credibility. On the other hand, when information
appears in the media via public relations methods, it is more believable (Seitel, 2004).
Public relations can therefore, be used to support the marketing of goods and services from subSaharan countries, as well as publicizing investment opportunities. Although public relations
differs from marketing, though their boundaries sometimes overlap.
For example, both
marketing and public relations deal with an organization’s relationships, and employ similar
communication tools to reach the public. They both have the important task of assuring an
organization’s success and economic survival. However, they approach this task differently.
Their goals are different. (Wilcox et. al, 2003).
The goal of public relations is to harmonize long-term relationships among individuals and
organizations. An organization depends on public relations to achieve its mission, and its
fundamental responsibility is to build and maintain a hospitable environment for an organization
(Wilcox, et. al., 2003).
The goal of marketing however is to attract and satisfy customers or clients on a long-term basis
in order to achieve an organization’s economic objectives. Its fundamental responsibility is to
build and maintain markets for an organization’s products or services (Wilcox, et. al., 2003)
As you can see, public relations is concerned with building relationships and generating goodwill
for the organization. Marketing is concerned with customers and selling products and services.
How then can public relations be used to support the expansion of African markets in the United
States? (Wilcox, et. al., 2003).
Thomas Harris, a public relations researcher, summarizes how public relations can support
marketing. He states:
In its market-support function, public relations is used to achieve a number
of objectives. The most important of these are to raise awareness, to
inform, and educate, to gain understanding, to build trust, to make friends,
to give people reasons to buy and finally, to create a climate of consumer
acceptance (Wilcox, et. al., 2003) p.16.
Another leading public relations scholar cites eight ways in which public relations activities can
contribute to fulfilling an organization’s marketing objectives.
It can:
• develop new prospects for new markets, such as people who inquire after seeing or
hearing a product release in the news media.
•
provide third-party endorsements - via newspapers, magazines, radio, and television through news releases about a company’s products or services, community involvement,
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inventions, and new plans.
•
generate sales leads, usually through articles in the trade press about new products and
services
•
pave the way for sales calls
•
stretch the organization’s advertising and promotional dollars through timely and
supportive releases about it and its products.
•
provide inexpensive sales literature, because articles about the company and its products
can be reprinted as informative pieces
•
establish the corporation as an authoritative source of information on a given product.
•
help to sell minor products that do not have large advertising (Wilcox, et. al., 2003)
All these are capabilities when public relations methods are used to support marketing.
Before employing the use of public relations methods to publicize African trading products, it
should be remembered that honesty, ethicalness, integrity, candor, and credibility are the
hallmarks of public relations practice. Good public relations practice harmonizes long-term
relationships between individuals and organizations. To “harmonize”, certain principles are
required.
1
Honest communication for credibility
2
Openness and consistency of actions for confidence
3
Fairness of actions for reciprocity and goodwill
4
Continuous two-way communication to prevent alienation to build relationships
(Wilcox, et. al., 2003)
In addition to the adherence of these principles, organizations in sub-Saharan Africa will have to
become conversant with the procedures needed to get information about their products and
services, and investment opportunities publicized in the United States media.
It is necessary to be familiar with the United States culture and business practices, in order for an
organization or corporations to communicate information that will be palatable to, and
acceptable by the United States media. To achieve this, that organization will have to know
how public relations is practised in the United States. Initially, it will be imperative that the
organization hires a native American, who is well-acquainted with the United States media, and
the practice of public relations. Although this is a great advantage, it is advisable that an African
organization not hire a major United States public relations firm or agency. Most times these
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firms or agencies use formula, prepackaged information, which is adapted. This means that the
individual, original, and specific requirements of an organization will be sacrificed.
It is better to hire either a consultant, or small public relations firm that can guide and direct the
organization through the maze of complex public relations issues in the United States, on a more
individualized level. A large agency will not take the time to do this (Guth and Marsh, 2003).
Whoever is selected to help the organization, ought to be conversant with the culture and peoples
of that particular country in sub-Saharan Africa.
The United States practitioner should point
out to the host organization how to deal with the United States media. One cannot pay a reporter
or an editor to publish or broadcast a news release, as is common practice in many countries in
the developing world. It has been alleged that in some African countries, graft is offered by
certain people and organizations in order to get favorable publicity in the media. This should not
be attempted with the US media. An organization should be told that no one can guarantee
publicity in the US media, through public relations methods. The news editor decides whether
the information in a news release will be used as a news item.. It is therefore, necessary for
African organizations to understand US media relations.
It is crucial to look at each of the media to get an idea as to how to match the information with
appropriate audiences and media. In the US news releases are sent both to the print and
electronic media.
Print media are the most effective for delivering a message that
requires absorption of details and contemplation by the receiver.
Printed matter can be read repeatedly and kept for reference. The
Internet perhaps is more like traditional print sources than like the
broadcast media. It is the fastest to deliver breaking news.
Newspapers are also fast, with the most widespread impact.
Magazines, while slower, are better directed to special interest
audiences. Books take even longer, but can generate strong impact
over time (Wilcox, et. al., 2003) p. 241.
For instance, organizations can disseminate information about their historical and contemporary
trading activities.
"Television has the strongest emotional impact of all media. Its visual power makes situations
seem close to the viewer. The personality of the television communicator creates an influence
that print media cannot match. Video news releases can be used, but it is very expensive to
create." (Wilcox, et. al., 2003) p. 241. However, if an organization has a dramatic and visual
story, using video news releases may be a most effective and compelling way to cover its
message to millions of people (Seitel, 2004).
Although not widespread in every African country, online media are used in the United States.
"The online media are usually used as a supplemental method, reaching a generally welleducated, relatively affluent audience interested in new ideas and fresh approaches." (Wilcox, et.
al., 2003) p.242. This can be considered for generating trade information in the United States.
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An African organization can establish a website with relevant links for the information that is to
be disseminated. .
Besides familiarity with the areas of the media, the question of timeliness in relation to publicity
of information is important. When dealing with the United States media, timeliness is critical.
Countries in Africa, and other cultures have different attitudes about time - more flexibility. In
dealing with the United States media, therefore, news releases must be sent on time. If a news
release is to reach the media at a certain day and time for publicity, it is imperative that these
times be adhered to strictly. The news release should be delivered well in advance of the desired
date for publicity, in order to provide time for processing, and editing. In addition to adherence
of time, it is also necessary to have the release sent to the appropriate editor, according to the
subject in the release.
A knowledge of how to disseminate press releases to the United States media, therefore, is
essential. This, in conjunction with adherence to the aforementioned pointers, if utilised properly,
will enable sub-Saharan African countries to be successful in gaining publicity in the United
States media about their trade and investment opportunities.
REFERENCES
Guth, D. W., & Marsh, C. (2003) Public Relations: A Values-Driven Approach, 2nd
Edition. Boston: Allyn and Bacon
Seitel, F. (2004) The Practice of Public Relations, 9th Edition. Upper Saddle River, New
Jersey: Prentice Hall
Wilcox, D. L., et. al. (2003) Public Relations: Strategies and Tactics, 7th Edition.
Boston: Allyn and Bacon
Stephanie Childs, International Projects Coordinator, Senior Advisor to the National
Director, Minority Business Development Agency, US Department of Commerce
At the Minority Development Business Agency, my national director - Ron Langston and I really
saw an opportunity to try address the issue of the Diaspora. How do you get more African
Americans engaged in doing business in Africa, and even beyond that, how do you get the US
minority community more engaged in doing business worldwide. Now there's a lot of minority
groups that we find that already have very close ties to their home markets - Asians, Latin
Americans - but because of historical reasons African Americans typically don't have the same
ties to Africa, and we're trying to work on finding ways to develop more interest and to develop
stronger business to business linkages between not just African Americans, but the US minority
community and Africa. We're the only federal agency that really focuses in on minority business
development, that's our mandate. It's not small or large businesses; it's just the US minority
business community. Our goal is to try to grow US minority businesses from small to large so
that we can really be players at the global table as many of those in the majority are. My first
point on Doing Business in America is it's just like any other market. You've got to do your
homework. I mean the US is many markets within one market, just like Africa is. There's the
US minority market and that in itself is broken down into many distinct sub-divisions. The first
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point is - Identify the need, do your market research. Find out what products there is a demand
in the United States, and in that where is the demand. It might be different in Detroit than it is in
Chicago or Los Angeles. So, it’s just like starting anything else, and I'm probably telling you
guys something that you already know, but there are some US government tools that you can use
even though a lot of folks here aren't US citizens and that are free on the internet that the US
Department of Commerce provides to help do market research. You can do some of that
research at www.export.gov - it's really geared towards US people looking to export abroad, but
there's a lot of information about the US market on that website as well. There's a lot of
information about almost every country around the world that the US has normal trade relations
with.
Also, brand your product. As we were just discussing, demand really can be created. There are
some amazing African products out there. What's traditionally happened is, the coffee grown in
Uganda gets sold to the French, the French come in and take the coffee and then they rename it
French Roast and nobody actually knows that that coffee was actually grown in Uganda. Now,
hopefully through AGOA with the preferences and the import duties being held to zero for a
significant number of products, there's an opportunity for Africa to sell directly into the US and
to brand and to create a demand for the African product. There are a couple of stumbling blocks.
One is financing. In the countries that I've visited in Africa, there's not a strong financing
mechanism or banking system that supports financing small businesses like the SBA. I think
several countries are looking at SBA and looking at the model that SBA has created to try and
imitate that model as people realize that small business is really what fuels economies. It creates
jobs. It's a great way to combat poverty and get people to hold a stake in their communities. A
lot of the economies are really informal. There's bartering going on, but there's no way to go to a
bank and take out a loan. One of the things the Minority Business Development Agency is
doing, we're looking at a couple of test cases. For instance, we were just in Senegal and they
have a bunch of local banks that are interested in looking into this concept of micro financing.
What we're trying to do is put together an access to capital training seminar to work with a
specialized group of banks that are interested in this, then we'll hand pick some companies, some
folks with excellent business plans and work to develop a pilot program so that we can show the
banks that this is not an undue risk. It can be done and it has to be done in Africa in order for
people to really grow their businesses.
Finding a distributor. This is a tough nut to crack in the United States. You've got to be able to
find a distributor for your products. One of the things I would offer to you is that the Minority
Business Development Agency is really set up as a decentralized organization. Because we have
significant amounts of the minority population outside of Washington, we have regional offices
that are in Chicago, New York, San Francisco, Dallas and Atlanta. Each of these areas also has
district offices to reach out to places like Miami and Los Angeles - places that have significant
numbers of minorities living there. What we're trying to do is work with those regional offices
to try to find distributors for people in the area. If LA is the target market, then you can get in
touch with our LA district director and they can help try to find a distributor. It's not just having
the product; you have to find a way in here, and its certainly not easy. It's not easy for African
Americans to find ways to distribute their products here in the US. So what we're trying to do at
the Minority Business Development Agency is to start from the beginning, look at the basic
problems of financing, teaching people who haven't necessarily had an entrepreneurial culture or
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know how to put together a business plan, how to focus on marketing and promotion. We do
some technical assistance programs and we're looking at partnering with certain countries in
Africa to try to develop programs to help that training. We're a really small agency; we're
always strapped for cash. If it were up to my boss, we would go full boar on these training
programs, but we just don't have the money so we're working with USAID and we've build a
strategic partners approach to work with other agencies that are interested in development of the
business sector in Africa.
Finally, I should say that - for the first time since Ron Brown was the Commerce secretary we're going to have a minority business trade mission to Botswana and South Africa later on this
year. It's to bring US minority-owned companies over to Southern Africa, but unlike the
commercial service and other agencies, we are allowed to really look at two-way trade. The US
Commercial Services really focus on US exports, whereas we see AGOA as more of a
partnership. Its got to be attracting US investors to sub-Saharan Africa. We see a role in trying
to help develop distribution networks.
So we're really looking at business-to-business
partnerships and all the various forms that it takes, and looking at ways to facilitate those links.
We really feel that no matter what the policy makers decide to do in terms of how far they want
to extend AGOA, the real promise and the real jewel is if we are able to us this opportunity to
build business to business linkages. We're not going to say that we have all the answers, but
what we're trying to do is break it down into pieces, looking at the issues and trying to develop
partnerships to facilitate the growth of business between the US minority community and the
sub-Saharan African community.
Thank you.
Sam Smoots, Regional Manager – Investment and Economic Growth, Overseas Private
Investment Corporation (OPIC)
Your business is the business of helping others so when you ask the question how do you do
business in the US that means one thing to you as an NGO and something else to someone who's
purely private sector and looking at a private sector transaction. It means something else if you
want to know about how to access US government business. All of those questions have
different answers depending on your approach. Within those categories, you have different sets
of US government agencies that you may want to engage. My colleagues on the panel have
spoken eloquently on some issues that I was going to touch on in terms of marketing and public
relations and strategic alliances as well as financing and how to present your opportunity.
I've been promoting US-Africa business since 1988 and there's consistently been the question of
how do you identify US partners. There are a number of matchmaking programs now to try and
capture business opportunities and disseminate that to the US communities with the hopes of
snag a fish out of this big ocean. As Stephanie said, it's tough finding a distributor. You have to
do your homework and all that to say that you need to know the US market. The type of
business that you do is going to define the type of market that you're going to communicate with
and to assess. As you would expect any American coming to Ghana not to think it's Kenya. You
need to know the elements of the US market. There are obstacles that many of your potential
partners in the US may be facing that you face as well such as lack of access to credit and so on,
so you need to be aware of this. This is not to discourage you, but help you be aware of the
84
filtering that must be done in your search for partners in the US. There are many organizations
that can help you weed through that. One of the things associated with former President Reagan
that seems to be a phrase that stands the test of time is, "Trust, but verified".
I remember when South Africa eliminated apartheid and you had a bunch of Americans
including African Americans running to South Africa trying to sell something. In this [the US]
market, they are not people that would have been taken seriously. So you have to be able to use
all the tools that you can to make sure that this person who is saying, "Yes. You have a product
that you're producing that is AGOA-eligible, and stands to gain a big market share in the US."
Well, who is this person and what is there track record in representing these types of products
that they're saying they can sell for you? In figuring out how to do that, we have services such as
the Better Business Bureau on the internet, you can just put in somebody's name and see what
comes up. You'd be surprised. There are ways to search public records to see if people have
been in bankruptcy and if you're overseas and have identified a potential partner, I believe, that
Commerce can help you as well. So the key is do as much homework as you can about this
market before you get there.
My job on a day-to-day basis is the job of filtering. I cover 48 countries in terms of trying to
identify projects that OPIC can either lend money to or provide insurance to attract US investors.
On average, I probably get somewhere around 100 phone calls a week. I've got to filter out the
real from those that aren't ready yet for full consideration. A key element to me in weeding it out
is how you present your opportunity, either on the phone or in writing. At OPIC, I help with
foreign direct investment. If you call me saying you're looking to sell sugar to the United States,
that's not what I do. You haven't done your homework. I absolutely can't help you in any way
with that type of project. So, you have to be able to package and present your information in a
way that will get the response from a financing institution, from a media institution or from
whatever type of institution that you're trying to engage.
Target marketing versus shotgun approach. You don't want to be in a situation where you're just
trying to have any American company that can latch onto you to be the company that you go
forward on a joint venture or some partnership arrangement with. That's one method in
streamlining who you interact with. Try to market your opportunity specifically. Look at the
three M's that I use on a day to day basis to filter businesses: (1) look at the management- who's
running whatever it is that's being presented to me, (2) Money - how much they have to put on
the table. There's a lot of talk about funds and venture capital, but there's just not enough activity
of people financing ideas anymore. Unfortunately, it takes money to make money; and (3)
Market - those of us that travel to Africa and other developing countries and those from the
continent that may have done business with Europeans and Asians recognize that the typical
American has a different approach than those of us that have had those experiences on the
ground. We go there and we can see with our eyes a kid selling a plastic toy on the side of the
road. We can see a kiosk with a little better presentation would really be a profitable business,
but me saying that to the person that would assess the credit at OPIC means nothing. I need to
gather enough data to justify what you may believe in your heart is a good business. At the end
of the day, lending is not an emotional business. No matter how much I want to promote
business in Africa, it comes down to the real data. How you capture it and how you present it
will make a difference not only in trying to do business with the US, but also in trying to do
85
business amongst your own regional countries. One thing I would say on this point is that as you
are investigating US partners to pursue exporting an AGOA eligible product, if there is a US
firm that has the capacity to distribute your product for you, but they are short of funds for
importing, there is an inventory financing program at SBA where the US company - based on a
solid order or series of orders from the African entity – can approach SBA to finance the
acquisition of the order. They will need to have a good business plan on how they will
effectively distribute this product, but that is another way to link up. If you can build upon this
trading partnership, then OPIC can get involved. When there will be an investment on the
ground in the AGOA-eligible country. . In terms of financing, the minimum load that OPIC does
is $100,000, and typically for a new project we’ll only look at 50% of the total project cost. This
means that at a minimum you need to be working with is $200,000. We also provide political
risk insurance that you can reference to potential partners to help mitigate the risk and encourage
them to make that step to invest in your countries.
While my focus is mainly .on private sector business development, knowledge of business and
business plan development is also important for NGO’s to be aware of in their proposals for
funding from foundations and other philanthropic groups. So this is something that you should
also keep in mind in your endeavors.
Thank you.
Colleen Dyble, Associate Director – Institute Relations, ATLAS
Good afternoon.
I want to thank Fred Oladeinde at the Foundation for Democracy in Africa for the opportunity to
speak before such a distinguished group of individuals. I am delighted to be here today because I
am a firm believer that if U.S.-Africa trade through AGOA is to achieve its most positive impact,
then civil society needs to play an informed role. According to Section 105, subsection 2A of the
AGOA legislation, the President, in consultation with Congress, “shall encourage United States
nongovernmental organizations to host annual meetings with nongovernmental organizations
from sub-Saharan Africa in conjunction with the annual meetings of the (AGOA) Forum.”
Last January, in Mauritius, the FDA along with The African Union, MACOSS, Bread for the
World, the Government of Mauritius and a multitude of other NGOs, breathed life into that
statement by holding the first ever AGOA civil society meeting. The goals of that meeting were
numerous: to empower civil society organizations to work with governments and businesses to
take maximum advantage of AGOA; to monitor AGOA eligibility and compliance issues; to
track the impact of trade, and most importantly, to develop a civil society network to make sure
that momentum continues. I want to discuss with you today how such networks are formed, the
role of individuals as key components and how to keep those networks growing.
Civil society can be defined as: all the natural and voluntary associations (and informal
networks) in which individuals and groups engage in activities of public consequence. I what to
stress that the key characteristic of these associations is that participation is voluntary. For more
than 20 years, the Atlas Economic Research Foundation has been in the business of helping to
create, enhance and mobilize such voluntary associations. The types of voluntary associations
86
that Atlas works with are free market institutes, or commonly known as ‘think tanks.’ These
institutes work to promote freedom around the world through a variety of avenues including:
generating independent research, conducting educational programs, and promoting ideas to the
media. There are close to 150 institutes that have received Atlas help in their beginning stages
and another 100 that have been involved in various Atlas programs. In addition to funding its
own operations and programs, Atlas has raised more than $20 million in private contributions
that it has given directly to institutes located across six continents. Our experience in helping
young institutes makes Atlas an attractive partner for organizations that also believe in the
importance of civil society organizations and the promotion of classical liberal values. This year
alone, we have worked with over 70 new institute leaders from 37 countries. We believe that
human capital is the most important asset in the emerging global economy and as a result, we
have become a major repository, training ground, and networking hub for human capital
involved in the world of ideas.
I am encouraged by the development of the AGOA Civil Society Network because the history of
Atlas shows that such networks can have a significant impact over time. The research institutes
(or “think tanks”) in the Atlas network have proven that they can have far more influence in
changing the climate of ideas within their own country than can much larger programs
developed from the outside.
Atlas has been making small investments in the climate of ideas in Africa, through free market
institutes, since 1983. Atlas’s founder, Sir Antony Fisher, began building bridges with the Free
Market Foundation in South Africa in the early 80s while Atlas was still a young organization. In
1989, the Institute of Economic Affairs in Ghana was founded by a former Atlas fellow and has
become a role model for many new institute leaders across Africa. These are just a couple of
examples to show Atlas’s history of involvement in Africa.
As I mentioned previously, the key to building solid networks of institutes or voluntary
associations, lie in the individuals. At Atlas, we refer to the individuals that develop institutes as
intellectual entrepreneurs. These intellectual entrepreneurs are part of a greater ‘network’ that
promotes the principles of freedom which includes- free enterprise, individual liberty, limited
government under a rule of law, personal responsibility, voluntary action and respect for private
property. By disseminating these values and ideas across a multitude of continents, these
institutes are striving to affect long term change. These ideas are important not only for institutes
dedicated to promoting freedom, but for African countries that are interested in AGOA. Under
the AGOA legislation, in particular Section 104, African countries are eligible for AGOA if they
have established or are making progress toward: developing a market-based economy that
protects private property rights, minimizing government interference, establishing sound rule of
law, promoting the development of private enterprise and enacting economic policies to reduce
poverty. Atlas’s institutes and AGOA qualified countries are clearly working on promoting
similar ideas and policies.
So, we know that these ideas are important for promoting freedom and for helping African
countries to be eligible for AGOA, but how do they impact trade and business development? To
give you one example, let’s take one of the ideas that I mentioned previously- respect for private
property. In his book, The Mystery of Capital, Peruvian economist, Hernando de Soto theorizes
87
that the absence of a legal property rights system is the reason why many developing countries
experience persistence poverty. While he acknowledges that many developing nations have
property rights, they are not legal, so they are not effective in proving ownership, thus inhibit
free enterprise and trade from occurring.
His book gives many illustrations to show the magnitude of the obstacles that exist in creating a
legal property rights system in a developing country. For example, in Peru, de Soto and his
research team calculated the amount of time it would take somebody in a shanty town around
Lima to get a title to a land so the police would no longer disturb them. They drew up a flow
chart of the steps necessary to get a property title and it came out to 207 bureaucratic steps! In
other words, they had to sign 207 documents before they could get their title. They then
calculated the amount of time it would take to process these documents among the various
offices and, based on an 8 hour work day, it ended up being 21 years. In Egypt, to get a license to
set up a bakery, once the shop was set up and the ovens were in place, was 549 days (based on an
8 hour workday). In a city outside of Manila in the Philippines, a titled required 168 steps and
13-25 years and in Haiti, 111 steps and 11 years.
De Soto’s study clearly shows that barriers to business development are universal across
cultures, and that the solutions, secure property rights, are universally applicable and essential to
free enterprise. At Atlas we believe that the principles of freedom transcend country borders and
serve as building blocks in creating societies where free enterprise can flourish.
In Africa there are several thriving institutes that work unceasingly to promote these principles.
Some of you may know James Shikwati Shikuku of Nairobi, Kenya. In 1997 he read an article
from an institute leader in Michigan and after many dialogues with institutes in the Atlas
network, in June of 2001, he left his teaching job and launched a free market institute in Nairobithe Inter Region Economic Network. He has accomplished too much for me to mention in this
short period of time, but there is one event that I would like to highlight. His institute recently
held a meeting in Mombasa, Kenya that attracted over 100 delegates from more than 18 African
nations. The purpose of the meeting was to start a campaign for market reform and free trade as a
means to sustainable development and the elimination of poverty, disease and war. James is
known for advocating ‘trade, not aid,’ and is a firm believer, that trade leads to prosperity and
that "the future of Africa is in the hands of entrepreneurs; the creators and consumers of wealth.”
In the fall of 1999, Thompson Ayodele, a journalist in Nigeria read an op-ed from an institute in
the United Kingdom that changed his life. He said that contact with Atlas and its networks
helped to crystallize his worldview and as a result in 2001, Thompson launched the Institute of
Public Policy Analysis in Lagos, Nigeria. He has received extensive media coverage for his
institute’s events and ideas and has been successful in educating students on many of the ideas
we have discussed today- free enterprise, rule of law, property rights, effective institutions and
the like.
These are just two examples of the individuals that run free market institutes in Africa that form
that have formed the backbone of the free market network there.
88
When working with institutes from around the world, particularly those in challenging
environments, we try to remind institute leaders that they are part of a bigger, collaborative
movement of institutes that are each working to secure and promote free markets. By seeing
themselves as part of a thriving industry, it helps to hedge their risks with donors and allows
them to see their institute’s activities in a wider perspective.
Although the institutes we work with are newly developed, they are building upon years, if not
decades of experience earned and shared by the work of other institutes. Many of the institutes in
our network are generous about sharing resources—this can include giving advice on running
programs or working with the media or by allowing them to utilize their policy studies to help
them take their first steps in promoting ideas and establishing credibility as an institute. Atlas
also has many resources on its website that provide advice from industry experts on many of
these issues.
However, when working with new institutes, we sometimes find that they have the tendency to
close themselves off to other institutes for fear of having to compete with them for donors. When
it comes to seeking out donors, we encourage them to see funding as a piece of pie and that
contrary to the popular belief, the pie grows bigger, not smaller, when more people pursue a
goal.
Networks, consisting of strong and dedicated individuals are essential to creating an informed
and empowered civil society.
We have seen the significance of individuals, their role in networks and how their ideas are
important, but I think to fully understand the nature of what they do, it is helpful to look at some
policy impacts. And before I begin, I want to stress that although the institutes in our network
exist within different cultures, there is nothing specific to these institutes that would prevent
these successes from occurring in other countries.
In South Africa, the Free Market Foundation, of which there are representatives here today,
published books that allowed South Africans to grasp the importance of the role that a
constitutional democracy plays in a peaceful transition. Leaders at that Foundation also played a
particularly important part in the final constitution of 1996, including successfully negotiating
with the government and other political parties to make sure the property rights clause was
included in the Bill of Rights in the Constitution.
The F.A. Hayek Foundation, a free market think tank in Bratislava, Slovakia has been
instrumental in influencing tax policy. Thanks to their work and persistence, in October the
Slovakian government implemented numerous key reforms, such as flat taxes and the
elimination of the inheritance tax that will allow for greater foreign investment in Slovakia.
In Lithuania, the Lithuanian Free Market Institute has worked to postpone the introduction of
progressive taxes, promoted the deregulation of businesses and introduced the currency boards,
which the government accepted, and of which they will be celebrating their 10th anniversary next
year.
89
And lastly, in Latin America, the Libertad y Desarrollo based in Santiago, Chile, played a pivotal
role in promoting the bilateral Free trade agreement between Chile and the US this past summer.
The Instituto Ecuatoriano de Economia Politica in Guayaquil, Ecuador, was instrumental in
setting up dollarization in 2000 and 2001.
These are only a few examples of the impact that ideas, individuals and networks can have on
influencing policy and spreading ideas to civil society.
As critical masses of institutes and strong networks develop, coalitions can be built to strengthen
existing members and bring together new ones. In the U.S., the State Policy Network and the
Heritage Foundation's Resource Bank serve this function; the Red Libertad network has emerged
in Argentina; and in Europe, the Centre for the New Europe in Belgium and the Fundacion
Internacional para la Libertad in Spain have been successful in these efforts.
In Africa, in addition to the AGOA Civil Society Network created in Mauritius last January, the
African Freedom Network was also launched as a facilitator of coalition building. This is a panAfrican network open to likeminded individuals that believe in the liberal values of personal
freedom, rule of law, property rights, democratic values and institutions and market economies.
Several domestic and international think tanks have started weekly or monthly ‘coalition
meetings’ that are modeled after Grover Norquist’s Wednesday meetings as a way of bringing
people together on a regular basis to discuss ideas.
Michigan’s Mackinac Center for Public Policy holds biannual ‘leadership conferences’ at their
headquarters in Midland where they share with other institute leaders what they have learned
about management, planning, personnel, communications and fundraising. These conferences
have attracted more than 150 individuals from over 30 states and 20 countries.
These are all ideas that can be replicated in your own countries and can be helpful models for the
AGOA Civil Society Network. In fact, just last month, the Inter Region Economic Network
launched the Joseph P. Overton Leadership Center, named after the late Senior Vice President of
the Mackinac Center for Public Policy, that will replicate the leadership training model
developed by Mackinac to facilitate the building of a constituency of people in Africa that are
dedicated to economic freedom.
As you can see, networks are fundamental in enabling civil society to have a voice and a strong
hand in taking advantage of AGOA’s opportunities. Individuals and their ideas, like each of you
sitting in this room, are the driving forces behind these networks. As you have seen, ideas and
networks can have significant impacts on free enterprise and can be replicated across cultures
and geographic borders. Most importantly, I hope that I have given you a sense of not only the
importance of the AGOA Civil Society network that was created, but how fundamental your role
is in sustaining it.
Thank you.
90
i
See Gregory Simpkins, Africando, The Foundation for Democracy in Africa Report on the Fifth Annual
International Symposium on Democracy, Trade, Investment and Economic Development in Africa, May 2002, pp
40-41)
ii
Joseph Schumpeter “ Capitalism, Socialism, and Democracy.”
iii
See AGOA site: < www.agoa.gov/index.html>
iv
They are , by 2003, the followings: Benin, Botswana, Cameroon, Cape Verde, Central African Republic, Chad,
Congo, Cote d’Ivoire, Democratic Republic of Congo, Djibouti, Eritrea, Ethiopia, Gambia ( The), Ghana, Guinea,
Guinea- Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger,
Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania,
Uganda, and Zambia.
v
Maroo, Aaditya, Devesh Roy,and Arvind Subramanian ,The Africa Growth and Opportunity Act and its Rules of
Origin:Generosity Indetermined?, International Monetary Fund, Washington DC, IMF Working Paper number
02/158, September 2002.
vi
Thierry Latreille : Les relations commerciales Etats-unis / Afrique: qui beneficie reellement de l’AGOA? Afrique
contemporaine, Automne 2003.
91
APPENDIX B: SUPPLEMENTAL POWERPOINT PRESENTATIONS
Impact of AGOA – Tariff Lines Liberalised
- In
The Initial and Potential Impact of
Preferential Access to the US Market
under AGOA
Agriculture
Little impact for LDCs
AGOA adds only 26 lines/products for duty free preferences
Potential impact for non-LDCs much greater
AGOA adds 626 lines (about 1/3rd of total agricultural products)
Significant number of products excluded from preferences
Paul Brenton
Trade Department, World Bank
Around 220 products excluded from AGOA preferences (meat, dairy,
sugar, chocolate, prepared food products)
Excluded products have high duties
Average duty on GSP agricultural products – 3.5%
Average duty on AGOA agricultural products – 6.7%
Average duty on excluded agricultural products – 30.7%
Impact of AGOA
Impact of AGOA – Tariff Lines Liberalised
- In manufacturing
Impact on individual countries depends upon
Importance of preference receiving products in exports
Key distinction between those eligible or not for apparel benefits
Utilisation of available preferences
For those not eligible main impact on non-LDCs
For LDCs AGOA liberalises 199 products(2% of total manufacturing lines)
For non-LDCs, AGOA adds 1249 tariff lines for preferences
Around 1500 lines remain excluded from preferences
Margin of preference and costs to firms of obtaining
preferences
Extent to which export diversification is encouraged
For those eligible for apparel benefits
AGOA adds a further 542 lines for preferential treatment
Around 950 (high duty) lines remain excluded from preferences
(Textiles, headgear, glass and glassware)
Excluded products have high duties
Average duty on GSP products – 3.8%
Average duty on AGOA products – 6.1% (apparel 12.1%)
Average duty on excluded products – 10 %
The Extent of Preferences
Summary of trade coverage of AGOA in 2002 ($mill)
Non- Non-Oil
LDCs Non-LDCs
LDCs Non-LDCs
+ Apparel
LDCs + Apparel
Total Exports 8050
627
277
5092 (666)
686
GSP
26
25
146
586 (25)
17
AGOA
6686
131
0
1238 (342)
437 (406 apparel)
↑Excl Mauritius + S.Africa
Utilisation of Preferences
Brenton -
1
The Value of Preferences
AGOA: Issues for the Future
1. How to deepen and broaden impact across a larger number of
countries?
Extend apparel preferences to all
Include all products
Identify and address reasons for under-utilisation of preferences
2. Whither rules of origin for apparel?
Extend special rule in time and coverage
Brenton -
2
AGOA GSP Provisions
Overview
ƒ Title 1 of the Trade & Development Act of 2000 is the African
Growth and Opportunity Act (AGOA)
December 8, 2003
ƒ The Act provides for the duty-free treatment of certain nontextile articles previously ineligible for preferential treatment
under the Generalized System of Preferences (GSP) (19
U.S.C. 2461 et seq.)
ƒ GSP benefits are in addition to the AGOA duty-free and
quota-free treatment of certain textile and apparel articles.
Leon Hayward
AGOA Beneficiary Countries
for GSP Articles
Dec. 8, 2003
2
AGOA Beneficiary Countries
for GSP Articles
ƒ GSP is extended to SSA countries until September 30, 2008
ƒ The President Has Designated 38 Countries As Beneficiary
Sub-Saharan African Countries (SSA)
ƒ GSP benefits for the rest of the world expire on December 31,
2006
ƒ For SSA, President allowed all 4,600 items on standard GSP
product list
ƒ ALL of These Countries Are Eligible for GSP (Non-textile)
Benefits.
ƒ PLUS for SSA an additional 1,800 tariff line items not part of
GSP product list which were considered import sensitive
ƒ Currently, a Pending Bill would Extend AGOA benefits until
2015
Leon Hayward
Dec. 8, 2003
3
“Import Sensitive” Articles
Leon Hayward
Dec. 8, 2003
4
GSP Articles Under AGOA
ƒ 2001: Total Value of US Imports From SSA Under the GSP
and AGOA = US $7.5 Billion
ƒ Examples of Articles previously ineligible for GSP
treatment which can now be entered duty free
under AGOA if made in a SSA country:
ƒ Watches
ƒ 2002: Total Value of US Imports From SSA Under the GSP
and AGOA = US $8.3 Billion
ƒ Electronic Articles
ƒ Footwear, Handbags, Luggage, Flat Goods,
Work Gloves, and Leather Apparel
ƒ 2003, January through September: Total Value of US Imports
From SSA Under the GSP and AGOA = US $9.6 Billion
ƒ Certain Semi-Manufactured and Manufactured
Glass Products
ƒ Other Miscellaneous Articles
Leon Hayward
Dec. 8, 2003
5
Leon Hayward
Dec. 8, 2003
6
Hayward -
1
GSP Articles Under AGOA
GSP Articles Under AGOA
Value of US Imports from Sub-Saharan Africa
Value of US Imports from Sub-Saharan Africa
Imports
2001
2002
Agricultural Products
Chemicals & related Products
Energy-related
Textiles & Apparel
Footwear
Minerals & metals
Machinery
Transportation Equip.
Electronics
58,990
3,812
6,827,422
355,906
242
91,207
13
241,200
0
77,562
4,140
4,861,343
610,036
256
77,568
8
371,198
1
Imports
Agricultural Products
Chemicals & related Products
Energy-related
Textiles & Apparel
Footwear
Minerals & metals
Machinery
Transportation Equip.
Electronics
2001
2002
2003 (Jan-Sep)
58,990
3,812
6,827,422
355,906
242
91,207
13
241,200
0
108,913
4,705
6,824,776
799,694
300
138,532
8
483,353
4
91,591
5,859
8,157,083
866,796
513
90,840
3
452,955
66
Value = 1,000 dollars
Value = 1,000 dollars
Source: US ITC/Dept. of Commerce
Leon Hayward
Dec. 8, 2003
7
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
8
GSP Requirements Under AGOA
“Product of” Requirement
ƒ Requirements for Duty Free Entry of GSP Articles
ƒ The Article Must be the Growth, Product, or Manufacture
of the Beneficiary Sub-Saharan African Country
ƒ Product of SSA Beneficiary Country
ƒ 35% Value Requirement
ƒ Article Must Either be Made Entirely of Materials
Which Originate in 1 or More SSA, or
ƒ Imported Directly into US
ƒ 19 CFR 10.175; 10.176; 10.178a
ƒ If Made of Materials imported into SSA from 1 or
more Non-Beneficiary Country, Those Materials Must
be Substantially Transformed into a New and
Different Article of Commerce
Leon Hayward
Dec. 8, 2003
9
Leon Hayward
Dec. 8, 2003
GSP Requirements Under AGOA
GSP Requirements Under AGOA
Substantial Transformation For “Product of” Requirement
Substantial Transformation for “Product of” Requirement
ƒ Foreign Materials Must Undergo A Single Substantial
Transformation In Order to Qualify for the “Product of”
Requirement
ƒ Example 1
ƒ Leather made in Argentina is imported into RSA
ƒ In RSA, leather is cut, sewn and assembled
ƒ Metal buckles made in RSA added to produce
finished belts
ƒ Substantial Transformation Results When a New or
Different Article Emerges with a New Name, Character
or Use
Leon Hayward
Dec. 8, 2003
10
ƒ The processing in RSA results in a single substantial
transformation of the imported leather into a new and
different article of commerce—the finished belt, which is
a “product of” South Africa
11
Leon Hayward
Dec. 8, 2003
12
Hayward -
2
GSP Requirements Under AGOA
GSP Requirements Under AGOA
Substantial Transformation for “Product of” Requirement
Double Substantial Transformation for Foreign Materials
ƒ Example 2
ƒ Foreign Materials Must Undergo A Double Substantial
Transformation In Order To Qualify To Be Counted
Toward The 35% Value Requirement
ƒ Raw rubber made in India is imported into Mauritius
ƒ In Mauritius, rubber is melted and formed by a mold
into a finished rubber boot
ƒ There Must Be A Finding That There Is An Intermediate
Article In Order For A Double Substantial Transformation
To Occur
ƒ Producing the finished boot results in a single substantial
transformation of the imported rubber into a “product of”
Mauritius
Leon Hayward
Dec. 8, 2003
13
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
14
GSP Requirements Under AGOA
Double Substantial Transformation
Double Substantial Transformation Example 1 (Cont.)
ƒ Example 1
ƒ Cutting the leather to shape to create bag components
substantially transforms the leather into intermediate
materials which are substantially transformed a second
time when assembled into the finished bag. Because
the leather is substantially transformed twice in
Tanzania, its cost or value may be counted toward
satisfying the 35% value-content requirement
ƒ Leather from Korea is imported into Tanzania
ƒ In Tanzania, leather is cut to shape to create 6
components comprising the outer surface of a travel
bag
ƒ The components are assembled with 20 other metal,
plastic and vinyl components to create the finished bag
Leon Hayward
Dec. 8, 2003
15
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
16
GSP Requirements Under AGOA
Double Substantial Transformation
Double Substantial Transformation Example 2 (Cont.)
ƒ Example 2
ƒ Producing the PCBA results in one substantial
transformation, and the subsequent assembly of the
PCBA with other components to create the printer
results in a second substantial transformation of the
Chinese PCBA components
ƒ 50 fabricated components from China, including
resistors, capacitors, diodes, transistors, and integrated
circuits, are imported into Kenya
ƒ In Kenya, they inserted into and soldered to a Chinese
printed circuit board
ƒ The finished printed circuit board assembly (PCBA) is
then assembled with numerous other components to
produce a printer for a personal computer
Leon Hayward
Dec. 8, 2003
17
Leon Hayward
Dec. 8, 2003
18
Hayward -
3
GSP Requirements Under AGOA
GSP Requirements Under AGOA
Value-Content Requirement
Value-Content Requirement (Cont.)
ƒ At Least 35% of the Full Appraised Value of the Article
Must be Attributed to:
ƒ For purposes of determining compliance with the 35%
value content requirement, an amount not to exceed
15% of the full appraised value may be attributed to the
cost or value of materials produced in the US
ƒ The Cost or Value of Materials Produced in One or
More Beneficiary Sub-Saharan African Countries;
plus
ƒ The Direct Costs of Processing Operations
Performed in a Beneficiary Sub-Saharan African
country
Leon Hayward
Dec. 8, 2003
19
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
20
GSP Requirements Under AGOA
ƒ Example
Direct Cost of Processing
ƒ 50% of Value Is Attributed to Leather Imported From
Argentina
ƒ Costs Either Directly Incurred or Reasonably Allocated to
the Growth, Production, Manufacture, or Assembly of
Article
ƒ 30% of Value Is Attributed to Metal Imported From US
ƒ Actual Labor Costs
ƒ 20% of Value Is Attributed to Processing and Assembly
in Mauritius
ƒ Such as Fringe Benefit; On the Job Training; Cost of
Engineering; First Line Supervisory; Quality Control
ƒ Dies, Molds, and Tooling
ƒ Research and Development
ƒ Cost of Inspecting and Testing (19 CFR 10.178)
Leon Hayward
Dec. 8, 2003
21
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
22
GSP Requirements Under AGOA
Imported Directly Requirement
Imported Directly:
ƒ The Article Must be Imported Directly from a SSA
country to the US
ƒ Direct Shipment from SSA to US without passing through
the Territory of any Non-Beneficiary Country
ƒ Three definitions of “Imported Directly”
ƒ Shipment from SSA to US through a Non-Beneficiary
Country
ƒ May not enter commerce and US is Final Destination
ƒ Shipment from SSA to US through a Non-Beneficiary
Country and US is not Final Destination on Documents
ƒ May not enter commerce and must remain under
Customs Authority
Leon Hayward
Dec. 8, 2003
23
Leon Hayward
Dec. 8, 2003
24
Hayward -
4
GSP Requirements Under AGOA
GSP Requirements Under AGOA
“Imported Directly:
Imported Directly
ƒ Direct shipment from SSA to US without passing through
the Territory of Any Non-beneficiary Country
ƒ Example
ƒ Oranges Grown in Uganda
ƒ No limitation to the Number of SSA Countries which
may “Contribute” to Production of a Product
ƒ Oranges Sent to Tanzania Where They Are Sorted
and Packed
ƒ Merchandise can undergo operations such as sorting,
grading, testing, packing, affixing labels, preservation,
etc. in any SSA country
ƒ Oranges Are Sent Through Mozambique to South
Africa
Leon Hayward
Dec. 8, 2003
ƒ Oranges Shipped Directly From South Africa to the
US
25
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
26
GSP Requirements Under AGOA
Imported Directly
Imported Directly
ƒ Shipment from SSA to US through a Non-Beneficiary
Country only if:
ƒ Example
ƒ Lemons Grown in Ethiopia
ƒ The merchandise does not enter into the commerce of
any Non-Beneficiary Country, and
ƒ Lemons Sent to Kenya Where They Are Loaded on a
Ship Going to France
ƒ Invoice, Bills of Lading, and other Shipping
Documents show US as the Final Destination
ƒ In France the Lemons Are Transferred to a Ship
Going to the US
ƒ The Invoice and Bill of Lading Accompanying the
Shipment From Ethiopia Show US As the Final
Destination
Leon Hayward
Dec. 8, 2003
27
GSP Requirements Under AGOA
Leon Hayward
Dec. 8, 2003
28
GSP Requirements Under AGOA
“Imported Directly” (Cont.)
“Imported Directly”
ƒ Shipment From a SSA to US Through a Non-beneficiary
Country and the Invoices and Other Documents Do Not
Show US As the Final Destination Only If:
ƒ Shipment From a SSA to US Through a Non-beneficiary
Country and the Invoices and Other Documents Do Not
Show US As the Final Destination Only If:
ƒ The Transaction That Causes the Goods to Be Imported
Into the US Must Be Between the US Importer and the
Producer or the Producer’s Agent
ƒ Goods Remained Under the Control of the Customs
Authority of the Intermediate Country
ƒ Goods Did Not Enter the Commerce of That
Intermediate Country
Leon Hayward
ƒ Goods Were Not Subjected to Operations Other Than
Loading and Unloading or Preservation
Dec. 8, 2003
29
Leon Hayward
Dec. 8, 2003
30
Hayward -
5
GSP Requirements Under AGOA
GSP Requirements Under AGOA
ƒ Example
ƒ Answer
ƒ A Producer of Baskets in Lesotho Ships Baskets to
Hamburg, Germany for Storage in a Bonded Warehouse
ƒ The Baskets Are Considered “Imported Directly” Under the
Third Definition
ƒ Shipping Documents Do Not Show U.S. As the Final
Destination and The Baskets Are Only Loaded and
Unloaded
ƒ Because the Baskets Are Stored in a Bonded
Warehouse, They Are Considered to Be Under the
Control of Customs in Germany
ƒ Orders Are Received by the Producer’s Agent in Germany
From Buyers From Various Countries, Including the US
ƒ The Baskets Did Not Enter the Commerce of Germany
Except for a Sale Other Than at Retail
ƒ Baskets Are Shipped From Germany to the U.S.
ƒ The Transaction Which Caused the Merchandise to Be
Imported Was Between the U.S. Importer and the
Producer’s Agent?
ƒ Does This Transaction Qualify?
Leon Hayward
Dec. 8, 2003
31
Electronic Ruling Requests
Leon Hayward
Dec. 8, 2003
32
Electronic Ruling Requests
ƒ Determine Applicability of Trade Programs
ƒ eRuling Request Procedures
ƒ Must Concern Prospective Shipments
ƒ binding.ruling@dhs.gov
ƒ Follow Up Questions Referred to (646) 733-3056/3063
ƒ Excludes Requests Requiring a Sample
ƒ Legally Binding
ƒ Provides for Uniformity Across Ports
Leon Hayward
Dec. 8, 2003
33
Leon Hayward
Dec. 8, 2003
34
Hayward -
6
The Library of Congress
African and Middle Eastern Division
The African Section in the
Library of Congress
The African Section
The African Section in the Library of Congress
is one of three units of the African and Middle
Eastern Division (AMED).
Established in 1960, the Section is the focal
point of the library’s reference and
bibliographic activities for the countries of subSaharan Africa (excluding the North African
countries of Algeria, Egypt, Libya, Morocco,
and Tunisia).
The African Section in the
Library of Congress
The African Section plays a vital role in supporting the
Library’s acquisition and collection development
activities. Additionally, the Section performs the
following functions:
Provides reference and bibliographic services to
members of Congress and other government
agencies, commercial organizations, the scholarly
community and the general public
Prepares general and topical bibliographic guides to
the Library’s vast Africana resources
Develops cultural and scholarly programs, special
events, and other outreach activities.
Maintains liaison with scholars and librarians in the
United States, Europe, and Africa
The African Section in the
Library of Congress
For historical as well as contemporary research
studies on the sub-Saharan African countries,
the Library’s Africana (materials from or
relating to Africa) collections have long been
recognized as one of the most comprehensive in
the world.
The African Section in the
Library of Congress
The African Section in the
Library of Congress
Research materials on sub-Saharan Africa
include every major field of study representing
the humanities, arts, and social sciences
(excluding technical agriculture and clinical
medicine).
Subject strengths within the Africana
collections are in languages, literature, history,
politics, government, and economics.
The collection’s diverse formats include:
Monographs
Newspapers
Periodicals
Official government and international
documents (including legislative and
parliamentary documents, statistical reports,
policy and administrative documents, etc.)
Batiste -
1
The African Section in the
Library of Congress
In addition, the collection contains:
Films, video and sound recordings
Manuscripts
Maps and atlases
Microforms
Prints and photographs
CD-ROMs and other materials in electronic
formats
The African Section in the
Library of Congress
Materials are acquired via several channels,
including:
Purchase
Copyright
Exchange
Gift
The Library’s field office in Nairobi, Kenya
acquires materials from Eastern, Central and
Southern Africa and the Indian Ocean Island.
The African Section in the
Library of Congress
The African Section in the
Library of Congress
Services of the African Section are
provided by area (country) specialists
who have responsibilities for providing
assistance in locating research materials
for a particular linguistic or geographic
region.
Staff members consult with researchers and
visitors, answer queries received by telephone,
fax, and electronic mail, and reply to
correspondence from all over the world
The African Section in the
Library of Congress
Researchers are able to access the Library’s
Africana holdings through various online
utilities such as the Research Libraries
Information Network (RLIN) and OCLC
WorldCat, or by directly accessing the Library
of Congress Online Catalog through the
internet.
http://www.catalog.loc.gov
Additionally, staff members offer, via
appointment, group and individual briefings on
countries and subjects (both onsite and on
location).
The African Section in the
Library of Congress
Guides and Reference Tools
In the African and Middle Eastern
Reading Room, researchers may consult
an extensive collection of specialized
guides and reference materials which
provide brief factual information or
references to more detailed sources of
information.
Batiste -
2
The African Section in the
Library of Congress
The African Section in the
Library of Congress
Guides and Reference Tools
These resources include:
General and subject bibliographies
and indexes
Dictionaries and encyclopedias
Handbooks and directories
Catalogs of library collections
Current Issues of Selected Periodicals
Additionally, the reading room offers
access to the Library’s online catalog,
various databases providing sources of
information on the African countries,
and Internet access.
Guides and Reference Tools
A sampling of selected African business
information reference and research tools
accessible in the African and Middle
Eastern reading room follows:
Batiste -
3
Batiste -
4
Batiste -
5
The African Section in the
Library of Congress
African and Middle Eastern Reading Room
Website
http://lcweb.loc.gov/rr/amed
Batiste -
6
African and Middle Eastern
Reading Room
Batiste -
7
Conducting Research on Trade and
Commerce in Africa
December 09, 2003
„
„
„
„
„
Dr. Abdul Quader Shaikh, Senior
International Economist
U.S. Department of Commerce
Abdul_Shaikh@ita.doc.gov
1-800-872-8723 or 202-482-0543
www.export.gov/tic
Country & Industry Market
Reports
Market Research Library
Finding Information
http://export.gov
Trade Development
http://export.gov
Example: Africa - Agribusiness
Shaikh -
1
International Partners and Trade
Leads
Trade Events and Trade
Mission
How to Reach World Customers?
www.buyusa.com
„
Register your company on line
„
Find New Buyers on buyusa.com
„
Search Buyers, agent distributors and joint
venture partners in 90 countries
Locating Qualified Buyers and
Partners
Export Counseling
Customer Oriented One StopShop for Trade Information
Trade Information Center
Shaikh -
2
Trade Information Center
(continued)
The Trade Information
Center
TPCC Agencies
EX IM
C o m m e rce
TD A
O PIC
U STR
Labo r
Tre asury
C o uncil o f
Eco no m ic
A dviso rs
•
Federal, State, Local and Private Sector
Resources
•
Export Process from A to Z
•
Regulatory and Documentation Requirements
•
Trade Promotion Events
•
Financing, Market Research, and Information
Resources
A griculture
Transpo rt at io n
EP A
General Counseling:
SBA
Trade
Information
Center
U S IA
O MB
U SA ID
Ene rgy
D e fe nse
S tat e
Int e rio r
N atio nal
Eco no m ic
C o unc il
The Trade Information
Center
http://export.gov/tic
Country Information
Africa Database
Botswana
Shaikh -
3
Export Resources
U.S. Exports to Africa
Trade Leads and Matchmaking
How to Find Foreign Buyers and
Trade Leads Online?
„
NTDB Global Trade Directory: Stat-USA
„
Website:http://www.stat-.gov/
„
Telephone:1-800-STAT-USA(800-782-8872)
„
STAT-USA has partnered with WAND Inc., created a
international trade directory to offer this online businessto-business opportunity to find buyers and sellers who
meets their specific requirements. To register:
http://www.statusa.gov/tradtest.nsf/Keyed/ntdbgtd_go?OpenDocument
African Growth & Opportunity Act
Three-pronged approach
„
Grant Sub-Saharan Africa unprecedented
access to the U.S. market
„
Improve Africa’s “business infrastructure”
„
Increase U.S. investment in Africa
Shaikh -
4
Trade Leads and Matchmaking
Making Contacts: Visiting the
Markets
Making Contacts:
Visiting the Market
Trade Missions
- Commercial and Market Access Missions
- Matchmaker Trade Delegation Program
- Women-In-Trade Business Development Missions
Trade Fairs
- 80 to 100 per year
Gold Key Service
-
http://www.countrywatch.com/
Making Contacts: Finding Business
Partners From Home
International Partner Search
- receive a tailored list of agents, distributors and potential
strategic partners
International Company Profiles
- provides information on potential trading partners
Video Gold Key Service
- meet qualified international business partners
- cost varies by country
MyExports.com (Exporter’s Yellow Pages)
- buyer’s guide to U.S. products and services
Africa
Shaikh -
5
Benin
Benin
AGOA Provisions
„
Apparel: Requires approved visa
system
„
U.S. fabric, yarn and thread:
Duty-free/quota-free access to U.S. market
without limits
„
Regional (African) fabric:
Volume cap for apparel made from fabric made in AGOA region
or, for lesser developed beneficiary countries from fabric made
anywhere.
Sub-Saharan Africa
Shaikh -
6
U.S. International Trade
Commission
„
Interactive tariff and trade data web:
http://www.dataweb.usitc.gov
„
Current Tariffs
2002 Tariff Database
2002 U.S. Tariff Online by Chaper
Shaikh -
7
Cereal yield vs. income, 1961-1999
The Globalization of Human Well-Being
10000
Based on a Policy Analysis piece published by the
Cato Institute in 2002, available from:
http://www.cato.org/pubs/pas/pa-447es.html
cyp61
cyp99
cy61
cy99
8000
cereal yield (kg per hectare)
Indur M. Goklany
Independent Scholar
E-mail: igoklany@cox.net
6000
4000
2000
0
0
10,000
20,000
30,000
40,000
GDP per capita (1995 US$, MXR)
Source: Based on data from World Bank (2001).
Fig 2-2: Food supplies per cap vs. income, 1961-1997
Malnutrition prevalence vs. income, 1987-1998
90
4000
malp87
% of children under 5 yrs
kcals/capita/day
3500
3000
2500
fs61p
2000
fs97p
fs61
fs97
mal87
mal98
60
30
0
1500
0
10,000
20,000
30,000
40,000
0
50,000
3,000
Source: Based on data from World Resources Institute (2000).
Access to sanitation vs. income 1985-1995
100
80
80
% population with access
100
60
40
swptob70
swptob95
sw70
sw95
9,000
Source: Based on data from World Bank (2001).
Fig 2-7: Access to safe water vs. income 19701995
20
6,000
GDP per capita (1995 US$, MXR)
GDP per capita (1995 US$, MXR)
% population with access
malp98
60
sanit85p
sanit95p
sanit85
sanit95
40
20
0
0
0
10,000
20,000
30,000
40,000
0
7,000
14,000
21,000
28,000
GDP per capita (1995 US$, MXR)
GDP per capita (1995 US$, MXR)
Source: Based on data from World Bank (1999).
Source: Based on data from World Bank (1999).
35,000
Goklany -
1
Infant mortality vs. income, 1960-1999
Health expenditures vs. income, 1990-1998
350
13
im60p
10
he90p
7
he98p
he90
he98
4
deaths per 1000 live births
Health expenditures (% of GDP)
300
im60
im99
250
200
150
100
50
0
1
0
10,000
20,000
30,000
40,000
0
50,000
10,000
20,000
30,000
40,000
50,000
GDP per capita (1995 US$, MXR)
GDP per capita (constant 1995 US$)
Source: Based on data from World Bank (2002).
Source: Based on data from World Bank (2001).
Tertiary schooling vs. income, 1965-1996
Life expectancy vs. income, 1960-1999
90
enrollment (as % of eligible pop.)
100
80
Life expectancy (yrs.)
im99p
70
60
50
LE60p
40
LE99p
LE60
LE99
ter65
ter96
ter65p
ter96p
90
80
70
60
50
40
30
20
10
30
0
10,000
20,000
30,000
40,000
50,000
0
5,000
10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
GDP per capita (1995 US$, MXR)
GDP per capita (1995 US$, MXR)
Source: Based on data from World Bank (2001).
Source: Based on data from World Bank (2001)
Human well-being vs. wealth, 1990s
Child labor vs. income, 1960-1999
80
70
child labor
(% of children 10-14 yrs old)
60
50
40
Life Exp, Inf Mort, Tert
Sch, Safe H2O, Ch Lab
cl60ptob
cl99ptob
cl60
cl99
30
20
150
3500
125
3000
2500
100
2000
75
1500
50
1000
25
500
0
10
0
$0
0
0
5,000
10,000
15,000
GDP per capita (1995 US$, MXR)
Source: Based on data from World Bank (2001).
Daily Food Supply
(kcal)/capita
0
$8,000
$16,000
$24,000
$32,000
$40,000
per capita income
20,000
Life Expectancy, 1999
Access to Safe H2O
Inf Mortality, 1999
Child Labor, 1999
Tertiary School, 1996
Food Supply, 1997
Source: World Resources Institute (2000); World Bank (2001).
Goklany -
2
per capita income
Sub-Saharan Africa
Low income
Middle income
Child labor (%)
High income: OECD
50
15,301
9,969
$10,000
$1,000
30,114
Sub-Saharan Africa
45
660
612
259
218
587
374
299
2,005
1,929
1,594
1,459
1,016
575482
564459
$100
37
35
1960
1970
1980
1990
2000
2002
29
25
Sub-Saharan Africa
19
20
15
10
6
4
3
Low income
1970
24
25
28
25
22
22
21
19
20
15
18
11
10
6
5
5
0
1960
1970
1980
1990
2000
Sub-Saharan Africa
80
69
70
40
43
46
44
48
33
29
27
23
26
26
23
21
10
10
8
20
19
19
20
8
9
9
0
1960
1970
1980
1990
Source: World Bank (2003)
70
59
59
57
50
48
78
78
69
68
53
40
High income: OECD
76
66
60
50
Middle income
74
61
47
46
30
20
10
1960
1970
1980
1990
2000
2002
2000
2002
Infant mortality
160
Infant motality (per 1,000 live births)
Gap in life expectancy (yrs)
Middle income
31
26
2002
Source: W orld Bank (2003)
40
30
0
2000
0
2002
Gap in life expectancy, relative to hi-income
OECD
Low income
1990
Low income
71
Source: World Bank (2003)
Sub-Saharan Africa
1980
5
0
100
90
29
26
0
Life expectancy at birth (yrs)
Middle income
32
29
30
0
Source: World Bank (2003)
34
34
18
11
0
Life expectancy (yrs)
Gap in child labor (%)
35
22
21
Gaps in child labor, relative to hi-income OECD
35
28
25
24
Source: World Bank (2003)
40
High income: OECD
32
28
28
1960
45
Middle income
35
33
30
5
$10
Low income
39
40
725
475
29,871
25,174
19,736
Child labor (%)
GDP per capita (in 1995 US$, MXR)
$100,000
151
148
Sub-Saharan Africa
140
120
Low income
134
128
Middle income
118
118
110
100
91
82
79
80
60
40
High income: OECD
106
105
110
81
54
40
35
32
29
22
20
12
8
5
5
1990
2000
2002
0
1960
1970
1980
Source: World Bank (2003)
Goklany -
3
Gap in infant motality (per 1,000 live births)
Gap in infant mortality, relative to hi-income
OECD
Cycle of Progress
C
160
Sub-Saharan Africa
140
120
Low income
Middle income
Human
Capital:
Education,
R&D
B
117114
100
112
106
106
98
102
83
101
83
99
76
80
N
O
75
Technology
57
60
A
P
Crop
Yields
D
Food
Supplies
E
F
Health
Economic
Growth/
Wealth
G
42
40
32
26
J
23
20
I
K
H
L
0
M
Trade
1960
1970
1980
1990
2000
2002
Q
Source: World Bank (2003)
Fig 2-1: Food supplies vs. time, 1936-1999
Figure 2-11: Global economic development, 1800-1999
4000
World
China
France
per capta GDP (1990 Int. $)
$25,000
US
Japan
W. Europe
L. America
World
E. Europe
FSU
China
India
Africa
Daily Food Supplies
(kcals/capita/day)
$30,000
$20,000
$15,000
$10,000
Developing
India
Europe
Developed
Brazil
United States
SS Africa
S. America
3500
3000
2500
2000
$5,000
1500
$0
1800
1850
1900
1950
1930
2000
1940
1950
1960
1970
1980
1990
2000
Year
Source: Goklany (1999), FAO (2002)
Source: Maddison (2001).
Figure 2-10: Life expectancy, selected countries, early 1950s1999
Average income vs. economic freedom index
$80
per capita income
(PPP, 2000 US$)
Life expectancy (yrs)
$60
$50
$40
$30
1950
$23,450
25000
$70
20000
15000
$12,390
10000
$6,235
5000
$2,556
$4,365
0
1955
1960
1965
1970
1975
1980
1985
1990
1995
Bangladesh
Brazil
China
India
Indonesia
Mexico
Nigeria
Russia
South Af
Egypt
2000
1st
2nd
3rd
4th
5th
Economic freedom index quintile
Source: Gwartney et al. (2002).
Source: World Resources Institute (2000); World Bank (2001).
Goklany -
4
3500
125
3000
2500
100
2000
75
1500
50
1000
25
Avg. Economic Freedom Index
Figure 2-16: Global economic freedom, 1975-2000
150
Daily Food Supply
(kcal)/capita
Life Exp, Inf Mort, Tert
Sch, Safe H2O, Ch Lab
Human well-being vs. wealth, 1990s
500
0
0
$0
$8,000
$16,000
$24,000
$32,000
$40,000
per capita income
Life Expectancy, 1999
Inf Mortality, 1999
Tertiary School, 1996
Access to Safe H2O
Child Labor, 1999
Food Supply, 1997
8.0
6.0
5.1
5.2
5.3
5.6
1975
1980
1985
1990
6.2
6.6
4.0
2.0
0.0
1995
2000
Source: Gwartney and Lawson (2002).
Source: World Resources Institute (2000); World Bank (2001).
Figure 3-1: Global poverty, 1820-1992
8
90
1200
70
60
900
50
40
600
30
300
headcount
20
percent
10
percent in absolute poverty
80
tfr1960
tfr2000
tfr1960p
tfr2000p
6
children per woman
1500
headcount of absolutely poor
(in millions)
Total fertility rate vs. income, 1960-2000,
uses dumslp
4
2
0
0
1800
1850
1900
1950
2000
0
Year
0
10,000
20,000
30,000
40,000
50,000
60,000
GDP per capita (1995 US$, MXR)
Source: Bourgignon and Morrisson (2001).
Source: After Goklany (2001), based on data from World Bank (2002).
Fig 4-2: Health expenditures per capita
(HE) vs. income, 1998
5,500
health exp (current US$) per capita
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
GDP per capita (PPP-adjusted, current International US$ )
Source: Based on data from World Bank (2002).
Goklany -
5
APPENDIX C: LIST OF PARTICIPANTS
Last Name
Agne
Aiyegoro
First Name
Abdoulaye
Ademola A., Phd
Akpatcha
Almeida
Amen, Esq.
Ambroise
Ray
H.M.K.
Organization/Affiliation
Consultant
Howard University School of Business, Department of
Finance
Ecole Superieure D'Economie ET Gestion (ESEG)
Bread for The World
NYS Summit on Africa & Assoc. of the Bar of City of NY
African Affairs Committee
Amirthanayagam Aruna
Department of State - AF/PD
Andela
Christine Ngo Ndjeng NGO Network on Food Security & Rural Development,
Coalition of African Organizations for Food Security
Anderson
Rory
World Vision
Anieboneru
Manny
George Washington University
Asfaw
Tidu
Technical Cooperation & Resource Mobilization
Aster
Tessema
Volunteer
Asueze
Reginald Akobunkzu (WIAFOD)
Ayittey
George
Free Africa Foundation
Azubuike
Anselem Okwudil
Rotary Club of Coal -City
Bahati
Modeste Lukwebo
National President, Congolese Civil Society
Baidoo
Kwesi
GM, Finance and Administration, Pambros Salt Ltd.
Balde
Thierno
Embassy of Guinea
Baptiste
Angel Dr.
African & Middle Eastern Division, Library of Congress
Blyden
Gerswhin Dr.
Institute for Democracy in Africa
Boolell
Satish
Forensic Pathologist, Ministry of Health, Member,
Committee on Poverty Alleviation, National Economic and
Social Council, National Children's Council
Breton
Paul
International Trade Department, The World Bank
Bronstein
Harvey
SBA
Carroll
Anthony
Manchester Trade, Ltd.
Chetwynd
Frances
Childs
Stephanie
MBDA, US Department of Commerce
Cobb
Charles
AllAfrica.Com
Cory
Charles
Washington File - US State Department
Dawson
Horace G.
Ralph J. Bunche International Affairs Center, Howard
Ambassador
University
De Caspers
Amy
The Heritage Foundation
Derryck
Vivian Lowery
Academy for Educational Development (AED)
Duffy
Stacey Plaskett
Office of the Deputy Attorney General
US Department
of Justice
Dunlop
Becky Norton
The Heritage Foundation
Dyble
Dyson
Ebo
Collen
Joe
Chinedu Uche
Ellis
Etta
Fane
Ferrao
Feulner
Fisher-Thompson
Flanagan
Ford
Francis
Frazer
Susan
Maru
Sambou
Joao Luis
Edwin Dr.
James
Colleen
Norma
Ronn
Jendayi Dr.
French
Gadio
Gaya
Johanna
Cheikh Tidane Hon.
Leonie Ida
Gebhardt
Goklany
Gordon
Greenburg
Gutherie
Haile
Hamilton
Hampo
Harinirina
Anne
Indur M.
Clarence
Bruce
Vernice
Daniel
Connie
Tamru
Lydie
Harvey
Hayward
Herelle
Iris
Leon
Cornelius
Hixson
Kay
Houseman
Husband
Imoukwuede
Jackson
Jazayeri
Jones
Kaferapajira
Charmaine
Mike
Imoukwuede, Nogi
John W.
Maryam
Chimere
Chancellor Laison
Atlas Economic Research Foundation
Virtual Export
Special Adviser to the President, Manufacturers Association
of Nigeria (MAN)
Washington File - US State Department
USDOE BIE Grant, Howard University
APCMM
Consultant, Manica
The Heritage Foundation
Washington File - US State Department
Washington File - US State Department
Graduate School -USDA
Office of Language Services, US Department of State
Senior Director for African Affairs, National Security Council
World Vision
Minister of State & Foreign Affairs, Republic of Senegal
Secretary General, Association For Defending The Rights of
The Consumers in Congo
Women in Entrepreneurship and Business
Independent Scholar
Philavon Distributors (AG&O)
Washington File - US State Department
American Bar Association, Africa Law Initiative
Eritrean National Chamber of Commerce
Office of the US Trade Representative
Voice of America
Secretary General, Grouping of Export Processing Zone
Companies and Partners
Chair International Committee, DC Chamber of Commerce
US Customs and Border Protection (CBP)
The Jay Malina International Trade Consortium of Miami Dade County
Chair, Africa & Caribbean Committee, DC Chamber of
Commerce
Alticor, Inc.
Project Coordinator, Women's Rights Watch Nigeria
Universal Negro Improvement Association
Kinetica Media, contractor Department of State
Center for International Rehabilitation
Chief Executive, Malawi Confederation of Chambers of
Commerce and Industry
Kane
Karangwa
Larson
Lashley
Laurent
Lenoir
Liser
Long
Lucas
Mabuza
Madell
Mageto
Mahone
Makalou
Adam
Evariste
Alan Under Secretary
Lynette Dr.
Bertrand
Juliette
Florizelle B.
Carmen
Sarah
Zodwa Florence
Mary Lisa
Elias
Charlie E. Jr. Dr.
Omar Dr.
Makanga
Mashabela
Proscovia
Victor
Maykowski
Mc Dermott
Jack
Jim Honorable
McDonald
McLeod
Meer
Jim Dr.
Roberta
Iqbal Sharma
Meese
Edwin III
Mehari
Milton, JD
Seifu
John W.
Mitchell
Mkandawire
Mohamud
Moloi
Motshwarakgole
Ethel
Watipaso
Hanad
Lehlonono Cyprian
Lucky
Johnson
Moudou
Muncy
Linord
Donald
Mungroo
Mungwa
Murta
Bissoon
Alice
Jose Antonia
Mwai
Helen
IBEX, Inc.
InterAction
US Department of State
Indiana University South Bend
Africa - America Institute (AAI)
AFL-CIO
Office of the US Trade Representative
DC SBDC at Howard University
Center for Global Development
Upper Asathe House
APHIS, US Department of Agriculture
Congressional Black Caucus Foundation, Inc.
USDOE BIE Grant, Howard University
Center of Studies & Research for Democracy , Economics &
Social Development (CERDES)
KDN/George Washington University
Department of Trade and Industry, Republic of South Africa
Graduate School USDA/International Institute
Co - Chair, Congressional Africa Trade & Investment Caucus
US House of Representatives
Bread for The World
Blackburn Center, Howard University
Department of Trade and Industry, Republic of South Africa
Chairman, Center for Judicial & Legal Studies
Former Attorney General
World Bank Institute
John W. Milton & Associates
Senior Investment Promotion Officer
President, Pietermaritzburg Chamber of Business
National Amalgamated Local & Central Government
Spotlight on Africa
International Accreditation Registry (IAR)
Assoc. Small & Medium Hotels
CSSDCA, African Union
Exi-Socimo
Mwencha
Nakibuule
N'diaye
Ndumo
Erastus
Aisha
Mody
Nqobamadoa Jeffrey
Newman
Njohn
Nolutshungu
Nookadee
Connie
Lawrence
Temba Anthony
Ram Sambung
Nwaogu
Nyagah
Nkechi Hon.
Simon
Nyathando
Beatrice Pumulo K.
Obaso
Millicent A.
Okomo
Okonmah
Okumu
Michael
Anthony
Lomah Akwiri
Oladeinde
Oladeinde
Fred
Moremi
Olaniyan, Prof.
Olaniyan
Omar
Abdalla Abass
Onwukwe
Ouologuan
Pauling
Peterson
Rangwala
Robinson
Rosales
Samen
Scott
Emmanuel
Adam
Sharon
Dave
Shehnaz Ms.
Leonard
Manny
Salomon
Harold
Seabolt
Shaikh
Shangali
William Toney
Abdul Dr.
Mary Simbo
Shiner
Sidibe
Josette, Ambassador
Antou
Secretary General - COMESA
Namibia Development Trust
Secretary General, Ministry of Mali
National Researcher, National Union of Mine Workers of
South Africa
Bureau for Africa, USAID
Director, Free Market Foundation Parliamentary Office
Executive Secretary, Mauritius Council of Social Service
(MACOSS)
Women in Action for Development (WIAFOD)
US African Economic Growth & Opportunities Assoc. (USA-EGOA)
Chairperson, Zambia Federation of Associations of Women
In Business Board
Adventures in Health Education & Agricultural Development/
Kenya Diaspora Network
Kenyan Diaspora Network
The Foundation for Democracy in Africa
Sr. Trade Development Officer, Ministry of Trade and
Industry
The Foundation for Democracy in Africa
The Foundation for Democracy in Africa
Permanent Observer Mission to New York, African Union
Managing Director, Tarabeni Investments, Secretary General,
Zanzibar Chamber of Commerce, Industry and Agriculture,
Urban West Region
Media
Bureau for Africa, USAID
National Endowment for Democracy
Bread for The World
Africa Society of the National Summit on Africa
Office of International Trade, SBA
The World Bank
Ralph J. Bunche International Affairs Center, Howard
University
Office of Language Services, US Department of State
International Trade Division, US Department of Commerce
Director of District Courts, Court of Appeal, Secretary, Law
Reform Commission
Deputy US Trade Representative
Savanna Tours
Simemba
Simon
Singh
Smith
Smith
Smith
Smith
Smoots
Smoots
Tankeu
Tape
Tarmu
Thomas-Lake
Tietcheu
Toure
Traoure
Valenzuela
Vollenhoven
Wagner
Walzack
Whitaker
Whithurst
Williams
Wright
Xavier
Zanini
Moses
Anthony
Rajnish
Tanya
Robin
Albert E. Dr.
Frances B.
Sam
Keisha Haughton
Elizabeth
Joe
Hampo
Hillary
Jeanne
Omar
Ibrahima Sory
Marisol
Jan van
Bridgett
Carrie
Rosa
Lori
Aleta
Ann
Marie-Lourdes Sonia
Gianni
Corporate Council for Africa
The Foundation for Democracy in Africa
The Foundation for Democracy in Africa
Small Business Administration
Department of State - AF/PD
President, Florida Memorial College
Consumer Alerts
Overseas Private Investment Corporation (OPIC)
RESCCUE
Commissioner for Trade and Industry, African Union
Voice of America
LTL Strategies
Afrique Education
Secretary General, OMAES
Embassy of Guinea
International Accreditation Registry (IAR)
Department of Foreign Affairs, Republic of South Africa
The Heritage Foundation
US Trade and Development Agency
The Whitaker Group
Customs and Border Protection
Bureau for Africa, USAID
Portfolio Management Group, Ltd.
Mauritius Council of Social Service (MACOSS)
Lead Economist, The World Bank