Committee on Ways and Means, Subcommittee on Trade, 7-15-98 Testimony

Statement of the Honorable Andrew Young, Chairman
Good Works International, LLC

Testimony Before the Subcommittee on Trade
of the House Committee on Ways and Means

Hearing on U.S. Trade Relations with Sub-Saharan Africa

February 3, 1999

In the past year, it seems that I have spent more time on the African continent than I have at home in Georgia and I always return with an increasing sense of urgency. Africa seems to be teetering on the pinnacle of her history. There can be a slow but rational descent into a valley of glorious peace and prosperity or the continent can plunge into a chasm of violence, disease and famine.

A millenium of colonial domination, exploitation, naïve cold war machinations, and greedy despotism has been countered by the determined efforts of missionary educators, enlightened administrators, and United Nations' efforts to end apartheid and the injustices of colonialism, while strengthening the social and technical infrastructure needed to secure sustainable development.

For every African tale of horror that emblazons our media, I have also seen leaders emerge with vision and the determination to proclaim the dawn of new possibilities. The fear of bloodshed and destruction under apartheid has been replaced by the creative power of truth and reconciliation. The corruption and tyranny of Nigeria's military dictatorship has moved towards successful elections and a hopeful transition to civilian rule. The ruthless repression of the independent press in Zimbabwe is paralleled by a new generation of young entrepreneurs in the private sector and the continued presence of an aging Ian Smith freely walking the streets of Harare. Tanzania and Kenya survive the shameful embassy bombings and continue to struggle toward stable and prosperous democracies. Mozambique seems to be recovering from the cold war destruction and now attracts billions of dollars in private investment from Europe and South Africa while Angola continues to struggle with the results of a misguided U.S. policy that empowered the Savimbi war machine. Oil flows daily towards U.S. shores from Cabinda as the Angolan people suffer the legacy of contradiction. Growth and stability in Senegal and Cote d'Ivoire exist side by side with chaos in Sierra Leone and Liberia. Ghana is seen as a small miracle, as hope and despair wrestle in Uganda, Ethiopia and Eritrea.

Africa's future is in the balance but the future of the global economy may be swaying in that same balance. We have the opportunity in the 106^th Congress to help sway that balance toward the expansion of peace and prosperity through the passage of the Africa Growth and Opportunity Act. This Act could be passed at a crucial time for Africa. The global economic crisis, combined with bad weather and weak prices for commodity exports, slowed the growth in total output in Africa during the last two years. The world's leading economic experts do forecast a renewal of growth in Africa in the next few years, but there are concerns about the timing and the quality of this growth. Important sources of foreign investment, particularly from Asia, are now less dependable, and some commodity export prices remain weak. Africa's share of global exports remains at less than 3 percent, and there is precious little by way of investment capital in these countries. Now is a special time when US assistance can make a difference.

At the present historic moment, this Bill would send a signal of concern and commitment that Africa needs. It is not the whole answer, but it is enough to activate private investment, which will bring much needed capital, technology, management and training. It would be a sign that the new macroeconomic policies followed by some African countries are looked on with favor by leaders in this country. It would signal US approval of structural reforms that support economic discipline, and it could signal approval and support for the successful resolution of armed conflicts. And it would show a willingness to help African economies through a development bump, the Asian financial crisis that was not of their own making.

Africa may be the world's richest continent. Its oil reserves, mineral resources and a market of some 700 million people provide a missing link in the equation of the global economy. Africa's need for transportation, communication, food security, clean water and health care offers an absorptive capacity, which is available in very few places on the globe. The requirements of the Africa Growth and Opportunity Act of good governance and fiscal responsibility are simply basic necessities if Africa is to compete favorably for investment and trade. Corruption must be replaced by transparency and accountability. Government policies must compete for capital by assuring an equitable return on investment and providing a work force that is free to develop the best of their abilities in an honest marketplace.

We have seen the folly of "crony capitalism" in Asia as well as greed and corruption in past governments of Africa, Europe and the Americas. The guidelines of the World Bank, International Monetary Fund and World Trade Organization are attempts to help nations learn from the mistakes of the past. Now we must all help these great international agencies as they take the next step in the evolution of their policy advice and recognize that there are many paths to economic policy discipline. Let us use the cultural differences among countries to form a stronger and even more disciplined policy process, and let the Africa Growth and Opportunity Act be a statement of the United States' intention to recognize good African economic policy.

We must help nations to evolve and negotiate their way into the global economy. These institutions (World Bank, IMF, and World Trade Organization) are designed to help in that process. Only when there is a refusal to negotiate a plan or process of reform and financial rectitude do these institutions appear to be authoritarian. At the Georgia State University School of Public Policy we have been quite successful in working with governments from more than 30 countries in assisting them with their negotiations and with reaching agreements that are both acceptable to the IMF and responsible to the citizens that governments represent. The governments we have worked with at the Georgia State Policy Studies School have ranged from in size from Russia to Jamaica.

Africa needs the growth and opportunity that this act intends, but it is equally true that the United States needs Africa.

I am quite anxious about the present stalemate in the Middle East, both with regard to Israel and the Palestinians; but, even more so, with Iraq. This situation remains explosive in a region of aging monarchs and volatile masses. During the Arab oil embargo of the late 70's, it was African oil that provided the safety valve for the U.S. economy. The African Continental Shelf, from Senegal to Angola, is absolutely vital to the U.S. economy and military security. African oil is more abundant and defensible than is the oil in Kuwait. In fact, more recent geological surveys estimate reserves comparable to those in the Arabian Gulf. Yet, the investment of diplomacy, finances and military resources in the entire African continent would barely equal the expenditure in one week in the Middle East.

The Africa Growth and Opportunity Act may be just the effort we need to begin a mobilization of conscience, concern and commitment to our vital interests on the African continent.

Respectfully submitted,

Andrew Young