Washington, DC — A delegation from two southern Africa nations, headed by Namibia's Minister for Trade and Industry Hidipo Hamutenya, has been in Washington seeking a modification in U.S. trade legislation.
The delegation, which also included Tswelopele Connie Moremi, Botswana's permanent secretary in the Ministry of Trade, Industry, Wildlife and Tourism, met with members of Congress to plead their country's case for an exemption to be added to the African Growth and Opportunity Act, or AGOA, which was adopted in 2000. During their three days in the American capital, they met Senate Majority Leader Tom Daschle, other members of the Senate and House and key legislative aides.
A new set of provisions, known as AGOA II, was added to a trade bill adopted last year by the House, but not to the version passed recently by the Senate. In an interview with AllAfrica's Ofeibea Quist-Arcton and Charles Cobb Jr., Hamutenya explained why the two governments want the changes and and why they are important to economic development.
Here is part one of the interview.
Minister Hamutenya, what is your mission?
We are here to mobilize support for the passage of the AGOA II amendments to the trade bill. Last November, the House passed the AGOA II amendments to the bill, which has got so many components. When it went to the Senate, the Senate passed the bill without AGOA II, so we got concerned. AGOA II is important in so many ways. It is meant to rectify some mistakes made in AGOA I. Above all, it is meant to provide Namibia and Botswana with the "lesser developed country" status. We have been classified by the World Bank and IMF as middle income countries. In terms of the World Bank and IMF, we don't qualify for soft loans.
Do you think that was the right classification or are you contesting it?
We have been contesting it for quite some time. We have given up contesting it as far as the World Bank and IMF are concerned, but we are now discussing it in the specific context of AGOA. AGOA as given huge opportunities to our neighbors -- to countries like Kenya, countries like Lesotho, like Malawi, like Tanzania and Mozambique to fast-track development of their garment industries and to export in large quantities to the USA. Botswana, Namibia and South Africa are classified as middle income countries, which cannot qualify to export garments to the USA, which are made out of fabrics sourced from where it is cheapest, i.e. the southeast Asian countries.
Does that mean you cannot import fabrics to manufacture clothes and then export them to the US?
Yes. Out of Taiwan, Hong Kong or Korea. We cannot import fabrics to transform them into clothing and export them as clothing to the USA, you see. So, the conditionality is that we must source the fabric from within sub-Saharan Africa, and you know there's only one country capable of producing enough fabrics, and that's South Africa. And South Africa itself is supplying its own domestic industry. They are manufacturing garments for export to the USA. So you see, South Africa is in not in a position to supply all of the factories in the region with fabrics, thereby enabling these countries to create jobs and then produce clothing exports for the USA.
So do you feel you're being unfairly penalized?
Well, fairly or unfairly, we just want to be given an opportunity to source raw materials cheaply, produce, fast track the process of development of our industry, the garment industry. That's what we are concerned about. We want to be treated equally like anybody else.
Who have you taken up this issue with and what has been the response?
Congress mainly. We have been dealing with various senators and various members of the House.
With any success?
Until I see AGOA II pass, I cannot say successfully. But I can say that yes, they were sympathetic. We haven't really run into anybody that says, "no AGOA II is not a good thing, or we are opposed to it". I think it was left out of the Bill passed by the Senate simply because there were no champions and there was no constituency in Washington pushing for this bill.
People were horse-trading and, in the process I think it was just sidelined, not because of specific opposition to the Bill, but because the Republicans are more preoccupied with the Trade Bill, the Trade Authorization Bill, that is to authorize President Bush to negotiate and sign agreements without having to refer to the Congress all the time. That is really what they are interested in most and they don't want their Bill to be overloaded with additional issues.
So you can see some of them (Bills) can be put aside for a while. We are saying, we will try to keep the AGOA II part of the Bill, to make sure that it is passed together. They say fine, okay, we did not really intend to kill it, we were just preoccupied with more urgent things but we will look at it. So we think that it will be passed, it has a chance of being passed.
Do you think that you have the support of its passage from the US adminstration and most Congress people?
Well, having been here for the past three days, I'm a little bit more hopeful now than before I came here. The administration has got no problem with it. They want to see it pass, but then they cannot push the Congress because they have their own top priority before the Senate. They want that to be taken care of fast, but they are not opposed to this one.
Why is Namibia so focused on textiles? Aren't there other opportunities opened by AGOA?
AGOA is really about fabrics and it's not a bad thing. We think that the manufacturing of clothing or garments is a strategic industry. We looked around and we know that history has shown us that everywhere, it was the manufacturing of clothing, it was the textile and garment industry, which led to the process of industrialization.
Not far away from us, small countries like Mauritius, which started off 25 years ago with a textile and garment industry until they reached a stage where they went into electronics. Garments paved the way for electronics. The focus now is electronics. But they were able to jump start, they were able to prime the pump through the establishment of this industry, a substantial garment and textile industry.
asn't the world moved on though? A quarter century later, do you think there's a market for textiles from Africa exported to America?
You just have to look at yourself in the mirror and those around you. There's some textile on either him or her. People wanting to wear clothing is one thing that doesn't get saturated, because everyday we wake up, we must dress and there's a big market here in the USA...
But when you look at America, Mexico is across the border, the US is close to Central America, to Panama, to Guatemala. Why would America look to clothing from Namibia when it can buy ready made clothes nearer home?
Well they have bought clothes elsewhere. The Americans went to Asia, they went to Malaysia, they went to Mauritius, they went to Hong Kong. You go to the super markets in the US, you see clothes 'made in Hong Kong,' ' made in Thailand', 'made in Mauritius', so why not 'made in Namibia?'
Would it be right to consider it part of a larger issue which is of concern to Africa: that on the one hand African nations encouraged to engage in trade, while the industrialized nations erect barriers that handicap African countries? That the playing field is not level?
Well, right now we are not crying for market lock out. I think our fundamental problem now, as Africans, is the supply side of the equation. What is it that we are going to bring to the market? You will remember for more than 25 years we have had the Lome (African, Caribbean and Pacific) agreements, 1-4.
What difference did it make to Africa? Not much. Was it because of a market lock up? No. It was because we did not fine-tune our productive side to be able to produce goods supplied to the European market.
So I think it will be a waste of time if an African country starts crying about being locked out of the market, because we were not producing anything of consequence. When we reach the stage where we are producing significant quantities of goods then we can then complain about market access, but for now, really we are not meeting the market. Even in this AGOA thing, we are hardly meeting the quotas that are available to us.
So, why are we are talking about AGOA II is that it is a market, but it is more about production at home. We want it because investors would want to jump on it. They will say okay, if I can source my fabrics from Hong Kong, from Malaysia, from anywhere, I can immediately set up my plans, manufacture my clothing, export it to America and make money within months. That's the crux of the whole issue.
Isn't one tied to the other?
What I'm saying now is that market access is here now. It's offered by AGOA, but we are unable to take advantage of it, because production capacity is low. Hence we want AGOA II. We know that there are investors who are not going to allow us to set up their plant. But they're saying it will be a time before we able to set up our own mills to produce fabrics, to source cotton to turn into fabrics to turn into clothing, it would take us years. But if we can start now to use imported fabrics, we can export to America next year.
Using fabrics imported from Asia?
Right. Well, not specifically Asia, using fabrics from wherever they are cheapest. That's the issue really.
How does the textile industry fit into Namibia's overall economic growth plan? Have you had to change it because of AGOA?
No, I think AGOA has made a difference. I not only think, I know that it has made a difference.
We continue to put in place policies and programs to develop our private sector. We understand that the private sector is a critical element of our development efforts, that indeed it can be the agent of growth and we want it to be that. So, we are continuing to create a conducive environment for foreign direct investment to flow into Namibia. We have spent a lot of money in the development of infrastructure. We have one of the best infrastructure set-ups on the continent. We have a region that is working. If you visit Namibia now, I will show you a very huge development complex, which was not there a year ago. When Congressman Edward Royce (chairman of the House Africa subcommittee) was in Namibia in February, I took him to the new industrial complex, which was just built thanks to AGOA. He couldn't believe it.
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There are about seven factories, big, a whole stretch of about four kilometers of factories. There are thousands of people working there. If you see them you would think that maybe you are watching a huge rally of sorts.
What do the factories produce?
Clothing.
All textiles? You don't think that you are limiting yourselves by sticking to textiles and shouldn't Namibia's economy be diversifying more?
We are limiting ourselves, but it is what's available now. It is not the only thing we are doing.
What else is Namibia producing?
We are doing other things. The fundamental thing is the diversification of the economy, if I may just start from there. We are working to diversify our economy. Up until now, our economy depended very heavily on diamonds and other minerals. So we have been producing raw materials and exporting raw materials. Diamonds, fish, beef. So we now want to go into manufacturing activities. With garments, we think we can jumpstart the process of industrialization.
We are also doing other things, we are adding value to minerals and raw materials. Right now we've got five factories cutting and polishing diamonds as of the last two years. So those are valuable additional activities. We are also trying to attract things like production of pharmaceuticals and so on and so forth. So we are not just focusing on garments and textiles. But for this specific visit here, we are talking about diamonds and garments. In terms of job creation, garments are number one. There's no two ways about that one. You can employ about five hundred in five factories to cut and polish diamonds, but you can employ thousands in the garment industry.
