America and Africa
The next great disruption
Barack Obama’s ambitions for Africa will be a measure of American engagement with the world
AMERICA, an exceptional place, has long stood out for a willingness to take big bets on the rise of others. Post-war American governments devoted vast amounts of money, attention and military might to rebuilding or being the midwife of economies and democracies in Europe and Asia, with spectacular results. Of the country’s 15 largest trading partners today, 11 are former recipients of American aid.
Now Africa is set to deliver a fresh asymmetric shock to the global order, taking its place as the last great emerging market. Its population is set to double by 2050, and will be astonishingly young (see chart). Does Barack Obama’s America have the patience and confidence to welcome this change, harnessing it for mutual gain? Or is today’s America more like an old-world power, risk-averse, inward-looking and fearful of change? Africa may seem a sideshow now, but it is not a bad test of America’s standing in the world.
Speaking to The Economist on his way back from a speech in Kansas City, the president acknowledges that global balances of power have shifted since America “necessarily” moved to create a post-war order. Now, says Mr Obama, the global “ecosystem” belongs to everybody. If that brings greater competition, he argues that his country can still be “central” to the process of moving Africa into the next stage of growth. He lists America’s strengths, from the global standing of its companies to its traditions of transparency, accountability, the rule of law and property rights. America’s economy is based on ideas and innovation. “Our emphasis on developing human capital is something that Africa very much wants and we’re good at,” he says. Finally, Africa has “fascinating” opportunities to “leapfrog certain technologies and skip certain phases of development”. He recalls meeting small farmers in Senegal whose smartphones gave them profit-boosting news about the weather, market reports, even new seed technologies. America is “better than just about anybody else” at such smart applications of technology.
America has reasons to bet big. It enjoys more latent goodwill than ex-imperial Europe (Nelson Mandela said that the election of Mr Obama, the son of a Kenyan economist, was proof that people everywhere should “dare to dream”). America is more trusted in Africa than China, whose vast investments have at times sparked comparisons with colonial exploitation.
Yet critics accuse Mr Obama of all but ignoring the continent, only paying his first lengthy visit as president in 2013, after his re-election. Asian and European cities have hosted numerous summits for African leaders, ending with ceremonies to sign agreements worth billions of dollars.
From August 4th to 6th Mr Obama is finally holding his first US-Africa summit, bringing nearly 50 heads of state and government to Washington, DC. Some aid projects are expected, notably $498m in public funds for power projects in Ghana, a country hailed as a model by American officials for its recent record of democracy. Such “compacts” with poor but reasonably well-governed countries are intended as seals of approval, prodding businesses to make still-larger investments.
Officials in Washington defend the relatively modest scale of the projects that American taxpayers have funded in Africa. Quality trumps quantity, they insist. American investments come with promises to obey workplace and environmental laws, as well as the bribe-banning Foreign Corrupt Practices Act. Mr Obama has crafted a summit agenda around African priorities. It will focus on such issues as agriculture (helping farmers feed the continent, after decades of sending hungry Africans aid) and infrastructure. That means physical projects: new roads to bring crops to market before they rot and electricity for a power-starved continent. But it also involves America pushing hard for less tangible changes: more transparency and democracy to weaken the grip of kleptocrats, as well as reforms to increase trade flows globally and internally—just 12% of African trade is within the continent.
“It is easier now to send a shipment of goods from Nairobi to Amsterdam than it is to send those goods to many parts of Africa,” notes Mr Obama. The president is proud of Power Africa, his 2013 pledge to double access to electricity in sub-Saharan Africa, where over two-thirds of the population, or 600m people, are without it. Sceptics retort that Power Africa covers six countries to date, with a focus on greener forms of power. An African ambassador is scathing, arguing that his whole continent needs a vast increase in electricity production to spark a much-needed manufacturing revolution—even if that involves coal for now, or huge dams that arouse the ire of American environmental groups and some Democratic members of Congress. America struggles to build renewable energy at home, charges the ambassador, so has to “export” its low-carbon idealism.
Officials in Washington insist that African leaders prefer American investments to those from less squeamish countries like China. American firms hire Africans in Africa, then promote them and offer them global careers, they argue. Chinese firms stick with their own.
Mr Obama takes a slightly milder line. When it comes to foreign investors, “the more the merrier”, the president says: China has deep pockets. But China’s need for natural resources may colour its investments, in ways that are less true for America, he says. “So my advice to African leaders is to make sure that if, in fact, China is putting in roads and bridges, number one, that they’re hiring African workers; number two, that the roads don’t just lead from the mine, to the port, to Shanghai.”
Balancing idealism and commerce will be a theme at the summit. In Washington, support for Africa draws on a curious coalition, spanning conservative members of Congress, often linked to Christian groups active on the continent, leftist Democrats interested in development and pro-business moderates from both parties. Mr Obama’s predecessor, George W. Bush, earned his legacy in Africa by launching the President’s Emergency Plan for AIDS Relief. Bill Clinton earned his legacy by working with Republicans to pass the African Growth and Opportunity Act (AGOA), removing tariffs on most exports to America from about 40 countries. AGOA trade remains small (it represents about 2% of American imports) and is dominated by crude oil. Still, a few firms do well from it, from Kenyan clothes exporters to German companies that build cars in South Africa for the American market.
I’m one of you
Mr Obama’s summit will begin with an event honouring religious activism, and devote a whole day to a business forum at which American chief executives will tell African leaders which reforms they think are needed to trigger a surge in investment (and a surge is needed: in 2012 Africa took just 1% of America’s overall foreign direct investment).
Yet Washington politics may yet complicate Mr Obama’s bold aspirations. There is pressure to revisit the terms of AGOA when it comes up for renewal in 2015, amid grumbling that some countries, such as South Africa, have offered better trade terms to Europe, for instance, putting American firms at a disadvantage. Mr Obama must also hope that Congress reauthorises the Export-Import Bank when its mandate expires in September. The bank, a once-obscure source of loans, loan guarantees and credit insurance to foreign buyers of American goods, is under fire from Tea Party conservatives who call it “corporate welfare”.
Mr Obama is confident AGOA will be reauthorised, though it may need to be “refined”. If the Export-Import bank is axed, he is sure that American firms will suffer, as the void is filled by companies from China, Germany, India and other countries. “There is no doubt that a thread has emerged in the Republican Party of anti-globalisation that runs contrary to the party’s traditional support for free trade,” he says. With six of the world’s ten fastest-growing economies in Africa, he believes that business is on his side.
The American public is weary of military engagements overseas. But Africa hands worry about what they see as America’s inattention to the violence—often tinged with religious extremism—that grips many regions. European leaders grumble that America has done too little to help France and other ex-colonial powers in some nasty conflicts, as in Mali. Some Africans complain about American drones and special forces operating in such hotspots as Djibouti, Ethiopia and Niger.
Mr Obama says that right now, America has the security balance “about right”. He calls America “the one indispensable power that is willing to spend blood and treasure” to defend universal values. But America “cannot do it alone”. America wants to help African peacekeepers do more. But he also sees a special role for European powers and the NATO alliance.
“We need to have a much more intentional, explicit plan for NATO to engage with African countries and regional organisations. Not because the United States is not prepared to invest in security efforts in Africa, but rather to ensure that we are not perceived as trying to dominate the continent,” says the president. France can “obviously” do some things in Francophone Africa that America cannot, he adds.
Africa gets a vote, of course. South Africa, notably, has butted heads with Mr Obama when defending the brutal regime of Robert Mugabe in Zimbabwe. As a big African power, South Africa can either invest in the kind of international or regional order that helps ordinary Zimbabweans thrive or face a flood of migration from that country, Mr Obama says. “Ultimately, those chickens will come home to roost.” He suggests that a culture steeped in the old “non-aligned” movement stops some African leaders from intervening in each other’s affairs: it may take “a new generation of leadership” to change that.
Is that enough? European leaders, among others, worry that Mr Obama is willing to be helpful in Africa, and to explain to African leaders why it is in their interests to follow the liberal, free-trading principles that America champions—but that deep down he sees Africa as Europe’s, not America’s, backyard.
Africa policy remains a bit of a backwater in official Washington. Many in the capital may notice Mr Obama’s summit mostly for snarling the traffic. But a great global disruption is coming. America has a lot of advantages, from entrepreneurial drive to its lack of a colonial past. The task ahead requires effort and persistence. Asia and Europe were transformed by their own people and leaders, but also because of the extraordinary things that America did. It is not at all clear whether a more insular America will do the same for Africa this century—or if it has ambitions to try.
http://www.economist.com/news/united-states/21610323-barack-obamas-ambitions-africa-will-be-measure-american-engagement
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