Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 29, 1993 TAG: 9401220007
SECTION: EDITORIAL PAGE: A11 EDITION: METRO
SOURCE: RICHARD E. SINCERE, JR.
DATELINE: LENGTH: Long
Some U.S. leaders are already on the African bandwagon. In May l993, some 5,000 business executives, government officials, and politicians took part in the Second African/African-American Summit in Libreville, Gabon. Among those who participated from the United States were the Rev. Jesse Jackson, Virginia Gov. Douglas Wilder, Assistant Secretary of State for African Affairs George Moose, and members of the Congressional Black Caucus.
The summit, which featured targeted workshops on trade and investment, also attracted a dozen African heads of state as well as numerous Cabinet ministers, business owners and diplomats. All the participants came away from the meeting with a firm belief that U.S.-African trade has great potential, perhaps especially because its levels are so small now. (U.S. exports to and imports from Africa amount to less than 5 percent of all U.S. foreign trade.)
More recently, a group of former U.S. ambassadors and business leaders have formed the Corporate Council on Africa, a nonprofit foundation designed to "strengthen and facilitate business relationships between African and American individuals and organizations." The founders of the CCA include former Assistant Secretary of State Chester Crocker and former U.S. Ambassador to Zimbabwe David C. Miller. Its corporate members include such giants as Coca-Cola, Mobil Oil and General Motors.
The Corporate Council on Africa had its official ``coming out'' at a State Department reception this monthDec. 9. The event attracted diplomats, entrepreneurs and journalists from both sides of the Atlantic, and for good reason: Africa promises to be the next region of substantial economic growth and development.
Why is that? Africa has a population of more than 500 million. This may seem to be a lot, but in many ways the continent is underpopulated. Many African countries, such as Chad, the Sudan and Zaire, have huge territories but low population densities. This underpopulation has contributed to low economic development because traditional manufacturing industries have been unable to find the critical mass of skilled workers they need to succeed.
For most of the past 300 years, Africa has mainly served as a reservoir of natural resources to be exploited, first by the Arabs, then the Europeans, and finally North Americans and Asians. Iron ore, gold, diamonds, tin, zinc, coal, timber, petroleum - these resources exist in abundance in Africa. European colonists and monopoly trading blocs created vast agribusinesses in cocoa, coffee and rubber. During the 30 years since independence, many of these commodities fell in price on world markets, leading to the collapse of various African economies that had failed to diversify under socialist governments.
Today, however, that situation has changed (or is changing). Economic collapse led, in turn, to the collapse of socialist regimes. Country after country in Africa has adopted democratic, accountable, constitutional structures and has elected presidents and parliaments who are more dedicated to free enterprise and free trade. State-owned industries are being sold off or closed down. Countries like Swaziland and Burundi have declared "tax holidays" for foreign investors - in essence, a company that starts business in Swaziland on Jan. 1, 1994, can operate tax-free until Dec. 31, 1999. Isn't that an incentive to invest?
African governments are recognizing the benefits of free trade as a means to attract investors, create jobs and lay the groundwork for future prosperity.
While for years the countries of southern Africa - Botswana, Lesotho, Namibia, South Africa and Swaziland - have participated in a customs union that erases all tariff barriers between those five countries, their neighbors are starting to get into the act. Fifteen African countries joined together in November in the Common Market of Eastern and Southern Africa. This new common market aims to reduce tariffs and non-tariff barriers to promote the free movement of goods and services, which in time should promote economic growth and prosperity.
U.S. companies that invest in these countries stand to benefit substantially. Advantages include inexpensive local resources, fairly stable governments, access to ports and railroads, and - perhaps most important - proximity to the gigantic South African market without the dangers of risky investment while South Africa goes through a long period of political turmoil.
The simultaneous birth of this common market and the Corporate Council on Africa cannot be simple coincidence. Both are evidence of Africa's increasing importance in the global economy and acknowledgment that savvy political and business leaders on both continents know that the future is in free enterprise, not centrally commanded economies. The 21st century for Africa is looking brighter each day.
\ Richard E. Sincere Jr., an Arlington writer and member of the Libertarian Party of Virginia, is author of "Sowing the Seeds of Free Enterprise: The Politics of U.S. Economic Aid in Africa."
by CNB