Sunday, May 31, 2009

Africa’s Illegal Drug Burden

The Woodrow Wilson International Center for Scholars held a fascinating forum recently that was not only thought-provoking about a major trans-national crime issue, but also offered some possible answers about why some African countries remain under-developed despite hundreds of millions of dollars in aid money and numerous external and internal development plans.

Antonio Mazzitelli of the United Nations Office on Drugs and Crime presented a cycle that appears to explain a great many things we see on the continent. Organized crime cartels from Latin America, Asia, Europe and the Middle East seek vulnerable countries in Africa, especially those with inadequate governance systems and/or high poverty, to serve as conduits to markets in Europe and North America. According to Mazzitelli, heroin (mostly from Afghanistan with a bit from Pakistan) moves into Ethiopia and Kenya and on to Sierra Leone, Liberia and Nigeria. Cocaine (largely from Columbia, Bolivia and Peru) moves through Equatorial Guinea, Cote d’Ivoire Sierra Leone and Senegal.

Once the illicit drug trafficking has begun, the tremendous amounts of money it generates makes corruption inevitable. Drug trafficking produces an estimated US$400 billion annually. The amount of money it generates makes it easy to bribe officials who are poorly or even sporadically paid. Drugs also allow the entry to terrorist groups such as Al-Qaeda, who often engage in drug trafficking to raise money for their activities. The deliberate corruption of governance systems produces weak states in which the law enforcement system exists, but only to hold off the chaos that makes even illegal activities difficult. Justice is for sale to the highest bidder. Conflict from unfair, undemocratic governance produces refugees, whose instability limits economic development and whose movements can destabilize neighboring countries as well.

The question one must ask from this information is: to what extent are African governments cooperating in keeping their governmental systems ineffective and damaging legitimate, sustainable economic growth? Corrupt government officials also benefit when there are inadequate controls and oversight of their activities. Too many short-sighted officials subvert their own nations to make money today without a thought of their homeland’s tomorrows. Guinea-Bissau, Guinea, Sierra Leone and Ghana have seen political developments in recent years that are cutting into this drug cycle. Donor nations, such as the United States, must first act to cut their own demand for drugs and then help other African countries step up their efforts to curb the flow of illicit drugs, which not only poison the lives of their citizens , but dim the prospects for their future.

Thursday, May 28, 2009

Beating Up Straw Men

Noted economist and defender of development assistance Jeffrey Sachs re-ignited the age-old disagreement about the value of foreign aid in a recent essay on the Huffington Post web site. In lambasting aid critics Dambisa Moyo and Bill Easterly, he set up his straw men and knocked them down, but in doing so, he failed to get to the heart of the disagreement. He just managed to slur two people who have a valid point to make about the effectiveness of aid.

The fact that Moyo and Easterly received a scholarship or a grant does not invalidate their skepticism about the effectiveness of foreign aid. Calling them hypocrites mixes points that confuse people and doesn’t help resolve this longtime disagreement. Reasonable aid critics do not say all foreign aid is bad. The main point they make is whether the aid helps to achieve long-term self-sufficiency or whether it creates ongoing dependency. It is not cruel to suggest that much of the billions of dollars in aid that has been extended over the years never reached the intended beneficiaries. We know aid money has been misappropriated and/or stolen. So to suggest that Moyo and others are calling for suffering is disingenuous. It is the governments that fail to apply aid properly that are responsible for much of this suffering.

The prime examples Sachs and others offer as countries that have used foreign aid to become self-sufficient always seems to feature South Korea, Malaysia, Taiwan, Israel and other countries not in Africa. The best Sachs could offer of aid recipients on the continent weaning themselves from aid are Egypt, which he describes as being “on the path,” and Rwanda, Tanzania and Ghana. The issue critics raise is how long it takes to become self-sufficient and whether the aid itself or policy changes to encourage entrepreneurship is the reason for progress in eliminating poverty.

Rwanda, for example, is now heavily dependent on foreign aid, which supports an estimated 70% of the government’s budget. Rwandan President Paul Kagame is furiously trying to lessen this dependency. As Moyo points out in her response to Sachs, if a continued high level of aid were the answer, why is Kagame trying so hard to reverse course? Moyo points out that after all the aid provided in the last couple of decades to African countries, 70% now live on US$2 a day as opposed to only 10% in the 1970s. Where is the success in that?

When many of us in the Africanist community first expressed support for the African Growth and Opportunity Act in the 1990s, we were criticized for wanting to cut aid in favor of trade. The fact that Africans wanted to be self-sufficient was lost on some U.S. government officials who thought Africans couldn’t succeed on their own without aid. There is nothing more damaging to progress for Africans trying to overcome poverty than the bigotry of low expectations. To borrow an old phrase: Africans need a hand up not an everlasting handout.

Monday, May 25, 2009

Rush to an African Market

Generally, when we speak of foreign direct investment in an African country, we’re talking about American, European, Middle Eastern or Asian investment. Increasingly, however, other African nations are investing on the continent, and this has its positive and negative aspects.

Uganda, for example, is experiencing a rush of investments from throughout Africa, but primarily from South Africa. There currently are 50 South African companies registered in Uganda – from the telecom firm MTN to Digital Satellite Television, the country’s only pay television company, to Game Store, the largest retailer in Uganda, to South African Airways.

Other African investors also see Uganda as a prime new market. Several Nigerian banks are now operating in Uganda: Bank PHB, United Bank of Africa and Global Trust. Kenyan banks also have entered the scene: Kenya Commercial Bank, Equity Bank, Uchumi and Fina Bank, as well as Kenya Airways. Investors from Botswana, the Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Sudan, Tanzania and Zimbabwe also have expressed interest in investing in Uganda.

This tide of investment comes despite Uganda’s bad roads, collapsed railway network and erratic power supply. And it doesn’t seem affected by the continued war against the Lord’s Resistance Army in the North. Sounds like a net gain for Uganda, doesn’t it? Well here’s the bad news.

Uganda’s Nile Bank and many other major firms have been bought by African investors. Meanwhile, the Uganda Development Bank has failed, and the country’s commercial banks are reluctant to give investors long-term loans. Uganda’s market is being flooded by counterfeit products, which endangers citizens, undermines investment and destroys innovation.

Still, African investment in Uganda is a positive trend for cross-border commercial partnerships. African countries just need to figure out how to nurture local companies without putting up the protectionist shield and hindering foreign direct investment. Of course, that’s easier said than done, and even countries like the United States have had difficulty managing that balancing act. If ever there was a situation in which World Trade Organization technical assistance could be useful, this is it.

Thursday, May 21, 2009

An Action of Hope

In the aftermath of President Barack Obama’s decision to make Ghana his first visit to the continent during his Administration this summer, speculation is growing about his so-called “snub” of his father’s homeland. If you look at his action as a slap at Kenya, you would be short-sighted. His action is actually one of hope for Kenya.

Since its independence in 1963, the Republic of Kenya has been a key African ally for the United States. In addition to offering rear bases for critical American military engagement in the Middle East, Kenya has been a reliable supporting vote in the United Nations and has been an anchor of the troubled Horn of Africa through the Inter-Governmental Authority on Development. The country is one of America’s top 10 trading partners in Africa, and in the recently released report by the U.S. Chamber of Commerce on what U.S. corporations think about investing in Africa, Kenya remains near the top of the list of African countries in which the corporate community is interested.

Moreover, the current leaders of the Kenyan government – President Mwai Kibaki and Prime Minister Raila Odinga – were among the leaders of the pro-democracy movement in the 1990s that produced a multi-party government in their country. Unfortunately, these heroes of the struggle for democracy have had trouble untangling themselves from years of political competition in order to come together in a fully functional coalition government. Unity governments are always difficult because one has to determine how to work together but still maintain one’s political options.

President Obama made clear long before he took office how important good governance is to him. In a survey produced by a civil society coalition led by the Leon H. Sullivan Foundation in 2007, Obama said: “I will make improved governance a priority for foreign assistance.” This message has been reiterated this year to Kenya directly by Secretary of State Hillary Clinton and Assistant Secretary of State for African Affairs Johnny Carson.

Rather than take the easy negative view, we must look at this as President Obama saying to two feuding cousins: “Stop the infighting and work together for the sake of the family.” Most of us have been in that situation when dealing with fractious family, and we took our action with hope and not a punitive spirit. Kenya has been and remains important to us, and the U.S. government is not saying otherwise by selecting Ghana as his first stop in Africa. There is plenty of time for the Kenyan leaders to resolve their differences so this Son of Kenya can return to a nation that has regained its customary place as one of Africa’s success stories.

Wednesday, May 20, 2009

Still the Dark Continent

In more ancient times, Africa was known as the “Dark Continent,” more for its mystery than for its people. There was little fact and much fiction. Historically, Europe was awash in legends about Africa. For example, the European quest for Prester John, the fabled African Christian king, led to the exploration of Africa and eventually to the trans-Atlantic slave trade. One would think that with all the travel to Africa and enhanced communications today, more would be known about the birthplace of mankind, but that apparently is not the case.

The U.S. Chamber of Commerce commissioned a study of American corporate views on Africa, and among the many interesting insights that survey reveals is that many American corporate leaders have been to Africa, but they still don’t know enough about the continent to feel comfortable about investing. According to the survey of senior executives in 30 leading multi-nationals, 41% of them have visited Africa often, 22% feel they have made extensive visits to Africa and 14% have visited Africa at least a few times. One corporate leader said, “Africa is very complex – culturally more diverse than Europeans of Americans think. I feel I know Africa ‘somewhat.’”

So why do these corporate leaders who largely have been to African nations, still feel they have a lack of understanding of the continent? The study found that U.S. corporations are often disinclined to consider doing business in Africa because the news about the African continent is mostly of chaos and unrest. So while the survey indicates that there is more knowledge about Africa than ever before among U.S. corporations, these leaders remain leery of investment even though they have seen for themselves what is on the ground in African nations.

Many Americans, lacking the colonial familiarity of Europeans, continue to feel uncomfortable in the unfamiliar terrain of Africa. Not even seeing is believing if there is no confirmation of what is seen in the American media. The Asian and European media report on commercial accomplishments in Africa as well as its failures; American media only sees war, famine and natural disaster. So corporate leaders evidently go expecting to see the worst rather than expecting the best.

If our media doesn’t change its tune, Americans will miss out on commercial opportunities others run to see. As the old adage goes: there are none so blind as those who will not see.

Friday, May 15, 2009

Clearing the Way for 2010

In the preparations for the next national elections in Ethiopia, the government of Prime Minister Meles Zenawi is preparing for what looks like change, but what is more likely to end up with the same power structure as today. This is despite a seemingly dramatic political action by Meles.

A few weeks ago, Meles told Africa Confidential newsletter that it was time for the old guard to step aside in his dominant Tigray People’s Liberation Front (TPLF) and the broader Ethiopian People’s Revolutionary Democratic Front (EPRDF) coalition through which it rules. He reportedly said he would leave it up to his ruling coalition and his party whether he would run again, but no change was agreed to at the quarterly EPRDF meeting in February, which ultimately is not expected to ask him to step aside. Even if he were to step aside, his most often cited successors (Minister of Foreign Affairs Seyoum Mesfin, Deputy Prime Minister Addisu Legesse, Federal Affairs Minister Abay Tsehaye and Health Minister Tewodros Adhanom) are not considered to advocate positions that represent a break in policy with the current government. However, it is those very policies with which many Ethiopians take issue.

In the aftermath of a 2005 election process that was considered to be a distinct improvement over past elections, suspicions of a manipulated vote count provoked demonstrations in which nearly 200 people were killed by government forces. The Government claimed seven policemen were killed by armed demonstrators, but could never produce any weapons as proof. Thousands of Ethiopians were jailed without charge or without trial for more than a year. Even now, four years after that election, the Ethiopian government continues to harass and jail political opponents, such as Birtukan Mideksa, head of the Unity for Democracy and Justice party, who was rearrested for allegedly saying she didn’t apologize for her part in the 2005 violence in order to get out of jail. She has been sentenced to serve the previous life term. More than 30 other prisoners of conscience, as Amnesty International calls them, have been in custody since April 24.

Meanwhile, the Government of Ethiopia has virtually criminalized most human rights work in the country, according to a Human Rights Watch report, and has made it almost impossible for local civil society organizations to function in any meaningful way to monitor the next elections. The Charities and Societies Proclamation, enacted in January of this year, considers any civil society organization to be foreign if it receives more than 10% of its support from outside the country. In a poor country like Ethiopia, that means almost all such organizations would be considered foreign and forced to operate under limitations that would choke operations with red tape, cripple it with fines or place leadership in danger of jail terms.

The post-election mess of 2005 led to legislation in the U.S. Congress that would end some military assistance (except for peacekeeping and self-defense materials) and place very limited sanctions on those government officials involved in the violence. Republicans in the House blocked it when they were in control of Congress, but Democrats passed it in the House, though not in the Senate. It remains to be seen if former supporters such as Congressmen Donald Payne or Chris Smith will reintroduce legislation to spur electoral and human rights reform in Ethiopia in this session of Congress.

Wednesday, May 13, 2009

Beyond Pirate Sympathy

Looking at young Mr. Abduhl Wali-i-Musa being brought into court in handcuffs, it is natural to feel sympathy for a teenager lured into criminal activity. As the only survivor of four pirates who tried to hijack the American Maersk Alabama and did take ship captain Richard Phillips hostage last month, he has become, in the minds of some observers, yet another symbol of American brutality. Yet the image of poor Somali fishermen merely protecting their territorial waters and trying to eke out a living in a war-torn nation is a false one.

The United Nations envoy to Somalia, Ahmedou Ould-Abdallah, is a man to be trusted. So when he states that nuclear material and heavy metals are being dumped in Somali waters, that is a claim to be believed. Nevertheless, the pirate attacks are mostly taking place beyond the 12-mile limit set by international law as a nation’s nautical boundaries. That is not defending one’s own waters, especially when well-equipped “mother ships” even farther out to sea are tracking vessels to be hijacked and those vessels sometimes contain humanitarian supplies for Somali people.

Someone said to me recently that the pirates haven’t killed anyone and that Somali elders from Puntland should have been brought in to engage in negotiations before force was used. It is true that the pirates have not shown a bloodthirsty streak, and in fact, feeding the hostages reportedly has become an industry unto itself in the port of Eyl. Special restaurants are said to have been established to prepare food for the crews of hijacked ships. However, when you hold loaded weapons on crews, hijack vessels and hold them for ransom, you have crossed a line that places your own life in jeopardy.

More than 30% of the world’s oil passes through the now-endangered Gulf of Aden, and there is little patience in feeding a growing piracy industry. Besides, the Somali pirates last year earned an estimated US$30million, while the Puntland budget was only US$20 million. How likely is it that Puntland leaders have the ability or the will to stop the pirates? They haven’t done much to stop the pirates thus far, and the port town of Eyl has been a safe haven for pirates who build fancy houses and drive expensive cars without concern for being arrested.

Still, this is a situation created by the neglect of Western nations, which saw the country devolve into chaos in the early 1990s and have done little to end the strife many Somalis have endured for nearly two decades. At an April 23 donor conference in Brussels, more than US$200 million was pledged to support the 4,000-troop strong African Union Mission in Somalia and strengthen the Transitional Federal Government security forces. Even as the pirates are brought to justice, these donors must be serious about helping to restore Somalia to the community of nations, or those who pray for our help today will turn against us and toward the criminals tomorrow. Young Mr. Musa is only an example of what the future could look like if we fail.

Monday, May 11, 2009

Looking at South Africa Clearly

Now that the Republic of South Africa has inaugurated its third post-apartheid elected president, it is time for the United States to accurately assess its relationship with this southern African cornerstone. One can look at a thing or a person and not really see clearly because of misconceptions and misunderstandings, and this describes the U.S. relationship with majority rule South Africa.

Most often when we look at South Africa, we see the industrial powerhouse of Africa – a nation with modern cities that are electrified, a strong currency with international standing, a global-ready stock exchange and products that sell in American stores. While all of that is true, there are other images we don’t seem to recognize. For example, there is the South Africa comprising the millions of poor people without sufficient, electricity, potable water, health care, roads or jobs. This South Africa erupted in violence last year against both illegal and legal immigrants they saw as taking their jobs and consuming scarce social services. It is this South Africa that President Jacob Zuma must satisfy soon because they are losing patience with what many see as government excuses for not meeting their needs. This will encourage solutions that are contrary to free market policies.

There is the South Africa that is seen by its neighbors as dominating the southern African region. This, of course, began during the apartheid era, when white-run South Africa attacked its neighbors in pursuit of African National Congress freedom fighters. While the South African government is run by blacks, its economy is still largely controlled by whites. Other Africans see companies such as South African Breweries and Shopright Checkers as interlopers who take over their companies and expand South African control. So when regional trade agreements are being negotiated, South Africa is often not as helpful as we would expect because of their concern over being seen as a bully state.

Nelson Mandela was certainly a preeminent liberation movement leader, but regional leaders, primarily Zimbabwe’s Robert Mugabe, were jealous of his international standing and influence. Mugabe had been the region’s liberation hero before Mandela’s ascension to power, and he and others never accepted Thabo Mbeki (son of Mandela contemporary Govan Mbeki) as an equal able to make demands and likely won’t see Zuma as an equal either. This has led to a diplomatic style that sometimes has South Africa taking a back seat when we think the country should use its political and economic muscle, such as in leading the effort to reform Zimbabwe.

Much will be made in the coming months about Zuma being a polygamist. We see South Africa as a modern state, a member of the G20 in which polygamy is not the norm. In fact, one recent poll showed most South Africans oppose polygamy, but we must not forget the exception to that view contained in the same poll. South Africans said they will accept a polygamist if that is his tradition, and if his wives willingly accept their arrangement, as the three Mrs. Zumas apparently do. President Zuma is a Zulu traditionalist, and the sooner we understand all that entails, the sooner we will be able to form a mutually beneficial relationship.

If we truly learn to recognize South Africa’s genuine position in Africa, then we can understand how and when our mutual interests coincide, and that will ensure a more successful partnership.

Friday, May 8, 2009

Between a Rock and a Hard Place

Those of us who want to see Zimbabwe resurrected from virtual economic death and its people provided with the services and opportunities they so urgently require face a dilemma. Despite the existence of a government of national unity, the ruling ZANU-PF still effectively controls the reins of power in the country, and that party is responsible for driving the country to ruination in the first place. So how do you help Zimbabwe and its people without strengthening ZANU-PF?

While the opposition MDC party holds posts in the government, they are stymied by a ruling party that is dragging its feet on revising the constitution or making most significant reforms. The next election is not expected for at least two years. The concern in the international community is that any improvement in the disastrous Zimbabwean economic situation will help the ruling party in its next election campaign. It is pointed out that while the MDC’s Tendai Biti has performed well as Finance Minister, reducing the country’s almost immeasurable inflation rate to -2% the last two months, the government of President Robert Mugabe could spin any improvement as being caused by its decision last fall to “dollarize” the economy, that is, suspend use of the Zimbabwe dollar in favor of the U.S. dollar, the South Africa rand and the Botswanan pula.

Only the Europeans are considering providing direct government support. The United States is looking for “work arounds” to provide a mechanism to meet Zimbabwean needs with as much as US$90 million without trusting any of it to the still-dominant ZANU-PF. Approximately 70% of the country needs food assistance, the formal and informal economies remain in shambles and crises such as the recent cholera epidemic have become sadly commonplace. The people of Zimbabwe desperately need our help.

All too often, we face the decision on how to help people in need without working through corrupt and evil regimes. We agonize over the choice, always promising to come up with a plan to avoid being placed in this situation the next time. Well we need to come up with a plan now that will finally answer our questions because they will return until we do.

Thursday, May 7, 2009

African Origin Confirmed

The debate has raged for years between the “out-of-Africa” theory of how humankind spread across the world and the “simultaneous development” theory that bands of humans developed separately but more or less at the same time in various parts of the world. The out of Africa theory has always reasserted itself, and a new, comprehensive study may have finally confirmed mankind’s African origin once and for all.

According to a report published recently in the journal Science Express, a 10-year study involving more than 3,000 DNA samples from throughout Africa showed that the continent is the most genetically diverse place on Earth. That means that the human gene pool began in Africa and that all humankind originated on what used to be called “the Dark Continent” – the continent of mystery – and spread outward.

Even though no less than former U.S. President Bill Clinton acknowledged that fact, there have always been efforts to discredit the out of Africa hypothesis. Even now, some scientists continue to push the theory that the breaking apart of Pangea and Gondwanaland, the earlier combinations of our current continents, led to populations that were initially Negroid due to climatic similarities, but which developed independently.

What if it could finally be acknowledged that we all originated from a small band of Africans who for some reason left the continent and headed north into the Middle East and then Europe and Asia or east into the Pacific islands or even West toward the Americas? Perhaps we would all realize we had a stake in Africa’s development and that the plight of Africans is the plight of our family too. Maybe then, helping Africa would seem more like keeping up the family home and not doing a favor for strangers.

Monday, May 4, 2009

AGOA’s Truest Champion

When the African Growth and Opportunity Act (AGOA) was conceived in the mid-1990s, its intention was to help small and medium enterprises in Africa and America do business with one another and build their mutual wealth together. Of all those who have backed this trade process, none understood that goal better than the late Jack Kemp. He was a strong supporter of entrepreneurial opportunity and was an AGOA champion from the beginning.

He is perhaps best known for his tireless support for tax cuts, which he firmly believed would provide lower and middle-income Americans more of their own money with which to build a life of their own making. However, Kemp also was the originator of the enterprise zone program to revitalize areas in which poor Americans live by encouraging investment that would create jobs. Some of those jobs would be in support of trade.

In testifying before the House Subcommittee on Trade in 1999, Kemp explained why he was so bullish on AGOA: “Much of Africa is growing dynamically today – growing economically, politically, socially and most of all in the attention of the United States and the world. Shifts toward political and market liberalization are revitalizing and energizing the continent,” he said. “We see a new generation of leaders implementing democratic reforms, expanding economic growth and unleashing the human spirit that will help bring greater prosperity and democracy to African nations. Problems and challenges abound, but the potential of both human and physical resources in enormous.”

The former Secretary of Housing and Urban Development and member of Congress was tireless in his effort to help Africans and Americans succeed in trade-related business. When Mel Foote asked him to join the Board of the Constituency for Africa, Kemp did so and took on whatever task he was asked to in order to build support throughout the country for helping Africa to become a more important facet of U.S. foreign policy. When Rosa Whitaker asked Kemp to join her as co-chair of the AGOA 3 Action Committee, he did so and helped pass a subsequent version of AGOA.

Kemp wanted to join the Board of the Leon H. Sullivan Foundation at the request of its founder, Hope Masters, but had to withdraw his bid earlier this year when he learned he had cancer. It would have been just the latest in his efforts to help Africans and Americans through self-help – in the tradition of the late Leon H. Sullivan. Those of us the congressman and the pastor left behind must see that their efforts continue and help make AGOA more than a promise.