Public Agenda (Accra)
Charles Abugre
10 July 2009
(Page 2 of 2)
An associated issue of resource outflow is the renewed debt problem. The limited debt relief delivered by the multilateral debt relief initiative has all but reversed by the combined effects of the food and financial crisis. Two things need to happen. Obama should support the UN call for debt servicing moratorium using the US bankruptcy legislation as a guide. This is only fair and will signify that Obama is listening to the UN when it comes to economic matters. Secondly, there is a crying need for a structural solution. This should be in the form of an independent debt arbitration panel operating under the auspices of the UN, to mediate between debtors and creditors rather than the current system in which debtors are totally at the mercy of creditors. This is not only fair, but it is also necessary for a stable international system benefitting rich and poor alike.
In relation to value added production, Obama is already one step in the right direction, by pushing for agricultural productivity up on the international agenda. First a few cautions. A focus on agricultural productivity should not become a cover for foreign private companies to grab lands or impose expensive, input intensive methods in the name of modernisation. The issue of land-grab is particularly worrying. A recent study by the FAO of 5 African countries, including Ghana showed that in the name of promoting foreign direct investment 2.5mn hectares of land of sizes exceeding 1000 hectares have recently been sold off to foreign investors in 5 countries, with single acquisitions as large as 450,000 hectares (Madagascar), 400,000 (Ghana) , most of it used for biofuel production. Total investment commitments for land acquisitions of over 1000 hectares have exceeded $1bn from 2004 to date. The myth that Africa is a continent of land abundance, with no claimants is dangerous for the future peace but also for social equity.
On the more positive side, Obama has the means in the form of AGOA and the Millennium Challenge fund to demonstrate his support for a focus on value added production. To do so however will require a radical review of both instruments. As they currently stand they achieve the opposite goals. The eligibility criteria discourage and undermine Africa's capacity to produce by imposing US intellectual property rights protection regimes, imposing privatization, insisting that governments are not directly engaged in economic activities, by discouraging them from using industrial policies to move out of commodity dependence and by using technical assistance as a means to cajole governments to implement trade liberalisation policies which directly undermine the goal of diversifying their economies. The view that liberalisation at all costs is good for the economy has now been shown to be false. This applies even more to African countries. If Obama does really mean to promote value added production in Africa he should indicate that the era of the extremes of economic ideology is over; that Africans are unlikely to ever break out of primary commodity production and joblessness without an active but balanced role of the state in investments, manufacturing and in enhancing their share of the value chain.
Such a strategy already exists in Africa. In 2004, the African Union, the African Ministers of Industry, and NEPAD adopted an African Productivity Capacity Initiative (ACPI), aimed precisely at a wise use of industrial policy and public/private investments aimed at value added production. Such a strategy cannot succeed without targeted and time bound infant industry protection, including more pragmatic use of trade policy. Obama should indicate support for such approaches and align his strategy for agriculture with this African-driven initiative. Such a support, even with modest financial means, will be invaluable politically and in terms of the policy space. He should indicate to the IMF and the World Bank that the neoliberal development model they work with has been put out of date by the global poverty, financial and trading crisis.
Obama must continue to emphasise the personal responsibility of African leaders and African people. He should ask them to do more with what they have, mobilise more resources from within, stamp out corruption and live less lavishly. He should commend Prof Mills for the small size of his motorcade; for not moving into the ridiculously luxurious new presidential palace built with huge loans (as people hungered). He should remind African and all other parliamentarians that they do not have a right to a standard of living several times the average of their populations. He should discourage African politicians from being businessmen- a clear root to conflict of interest and corruption. They should make a choice between public service and personal profit seeking. He should remind them that the only way to measure their worth to their citizens is the extent to which citizens have jobs, have access to healthcare, education, water and personal protection - not the sophistication of their limousines and life styles.
Above all, he should remind himself and us all that the wind of change that began in Accra in 1957 sweeping across the African continent, suppressed for several decades, may well be on the rise again. Who better to understand this, than Barrack Hussein Obama.
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