Interview of the Month

On August 31st, 2010, posted in: sep10news by

Interview with Congressman Bobby Rush, Co-Chair of the Africa Partnership for Economic Growth Caucus (APEGc)

U. S. Congressman Bobby L. Rush is a Member of the U.S. House of Representatives from the first congressional district of Illinois and is one of the senior Members of the powerful  Committee on Energy and Commerce.  He is also the Chairman of the Commerce,  Trade and Consumer Protection Subcommittee.  Given his position and experience, he is uniquely equipped and positioned to influence U.S – Africa trade relations.  It was his leadership as Co-Chair of the recently launched African Partnership for Economic Growth Caucus (APEGc) that sparked our interest.  The primary mission of APEGc is to develop U.S. policies designed to strengthen U.S. –Sub-Saharan Africa relations by promoting growth and economic development.  Despite major successes in Consumer Product Safety and other domestic matters, we honed in on his interest in enhancing opportunities for U.S. and African businesses through trade.

AfricaBusinessSource.com: Congressman Rush thank you for taking the time to answer some of our questions.  I’d like to say that I’ve been greatly encouraged by recent statements made by you at both the Africa Partnership for Economic Growth Caucus (APEGc) launch and a recent joint hearing on U.S. – Africa Trade Relations that call for a much more aggressive and sustained approach towards trade in general and more specifically with Africa. What will you as Chairman of the new ‘Africa Trade Caucus’ do differently to facilitate more US-Africa Trade?

Congressman Rush: First of all, thank you very much for having me here. It is a privilege and an honor for me to engage with the leaders of tomorrow. I represent one of the poorest districts in the United States so I understand what African leaders are dealing with as they try to create jobs for their constituents.  Today, the world is suffering an unprecedented financial crisis – especially in Sub-Sahara Africa.  I helped create the Africa Partnership for Economic Growth Caucus (APEGc) to develop U.S. policies designed to strengthen U.S. – Sub-Saharan Africa relations by promoting growth and economic development. What makes the caucus different is the fact that we will focus not on fighting poverty like many organizations are doing but on creating prosperity. To do so, our policy has four pillars: mutual respect, engagement of the African Diaspora, economic empowerment and technology and innovation.

1. First, I strongly believe that Africa holds the key to its own development. We will therefore listen to Africans because U.S. policy should be based upon mutual respect. The U.S needs Africa as well. I recently introduced a bill H.Con. Res. 128 to recognize the importance of Africa to the U.S.  This will put an end to the paternalistic approach the U.S has used in the past toward the continent and create a mutually beneficial policy framework for our nations.

2. Second, we will engage the African Diaspora. The Diaspora represents a driving force that has not been tapped yet. Africans in America are sending billions of dollars back to their home countries every year through remittances. The cultural connection between Africa and the United States spans four centuries. These cultural ties are a tremendous asset in our quest to spur democracy and build a strong African economy. Their networks open new possibilities for trade and commerce. We can see a great example of the importance of the Diaspora in India and Taiwan.  By acting as experts and ambassadors, they contribute to the burgeoning technology industry by linking businesses with markets in their home countries.

3. Third, we will encourage private sector development on both sides of the Atlantic.  In Africa, building a strong middle class is very important for two reasons: (1) the absence of a middle class is an obstacle to trade; and (2) creating a middle class will create the economic freedom Africans need to exercise their political rights.  They will then have the ability to hold their leaders accountable for their failures. Empowering Africans is a more effective way to spur democracy.

In the U.S. only one percent of all small and medium sized enterprises (239,000) are exporters, although they represent 97 percent of U.S. export companies.  However, these small businesses account for only one percent of all small businesses and less than one-third of U.S. exports by value.  Small business trade with Africa is almost non-existent.  It is important this number increases.  APEGc also aims to create a platform for U.S. business recovery during these tough economic times.

4) We will encourage the transfer of technology in areas of importance like agriculture.  Many reports are concluding that developing economies — especially Africa — are disproportionately impacted by global warming.  The transfer will provide Africa options to manage climate change and achieve sustainable development.  It will also create numerous “green jobs.”

AfricaBusinessSource.com:  The general perception of Africa here in the United States, arguably created by the Media, is of a continent in crisis. This one sided depiction of the continent likely plays a role in the lack of interest from smaller businesses and tourists while considering Africa as an investment opportunity or vacation destination. Is there anything the APEGc could do to help “rebrand Africa” here in the United States?

Congressman Rush:  This is a very interesting point. While the media is trying to inform the public on important issues affecting the continent, they indirectly discourage investment in Africa. The public associates Africa with poverty, war, corruption and disease.  This is hardly the case.  The public needs to understand African diversity and the fact that the continent has countries with distinct socio-economic conditions.  Some African countries have made major improvements.  It is your responsibility as the media to communicate that as well.

One of our goals as a caucus is to promote African achievements.  It is important that we lift up the most successful African democracies and sustain their economy.  Ghana, for example, has significantly improved its political system, but it will not be able to sustain its democracy without investment.  African governments must put forth more effort to attract investment in their countries as well. It is important that we create a synergy among the government, private sector and the media on both sides of the Atlantic. On this note, I thank you for the partnership that your website has extended to the caucus. Partnership is key.

AfricaBusinessSource.com: CMC Baird, along with the US Chamber of Commerce recently released a survey of 30 senior executives from fortune 500 companies.  The survey gave us a window into how major US corporations view Africa as an investment opportunity.  While it shows an increasing interest in Africa based opportunities, there were some concerns. These concerns included respect for the rule of law, poor access to larger regional markets, poor infrastructure and lack of skilled workforces. Will APEGc engage African Governments directly with these types of concerns voiced by US businesses? If so, how?

Congressman Rush:  The challenges to trade in Africa are important.  The concerns raised by those executives are legitimate.  These are issues that can only be resolved by African governments.  The core foundation of the caucus is partnership.  We will engage African countries on issues affecting not only our bilateral relations, but issues affecting our respective economies.  I will be leading a congressional delegation to four African nations in August.  I will seize that opportunity to discuss with all US Africa trade stakeholders about those issues which are important for both regions.  We are committed to partnering with and providing assistance to countries that abide by democratic principles.  We will support programs and legislation that will increase investment in infrastructure, electricity, telecommunications, energy, and transportation. We will work with African government to (a) identify the best U.S. export prospects to Africa; (b) identify tariff and non-tariff barriers that impede U.S. exports to Africa; and (c) undertake discussions with African states to increase market access for these goods and services. AGOA have proven to be successful in one aspect. We need to sustain our gains — especially in the textile industry — and move toward trade in value-added products and manufactured goods. The old model of selling products in a country, taking the profit and leaving should end. It is critical that investors have local partners and provide training to local workforces. If we want to be economically successful, we must ensure that the economies of Africa are equally successful.

I must also note that I am looking forward to reading a survey on the views of African’s governments on doing business with Fortune 500 American companies.

AfricaBusinessSource.com: It’s estimated that the Chinese have invested more than 100 billion dollars in African economies this decade alone. As expected they’re investing heavily in oil rich economies, but they are also buying into non-oil producing sectors across the continent. Is there a second scramble for Africa’s resources and how should the U.S. respond to this, in your opinion?

Congressman Rush:  China’s policy towards Africa is more aggressive than the U.S. policy. For instance, in 2007, China’s Ex-Im Bank guaranteed loans of $13 Billion to Chinese companies investing in Africa, compared to approximately $440 Million by the US Ex-Im Bank. U.S companies can not compete under such circumstances. Congress needs to revisit our trade and financial policies and how the U.S. private banking sector can help American companies wishing to invest in Africa.  The current recession makes it difficult, but African Banks could play an important role as well.  At present, the largest bank in Africa, Standard Bank (20 percent Chinese owned) is moving into the American market to help finance American companies wishing to do business in Africa.  United Bank of Africa, out of Nigeria, is also doing the same thing.  It is time for the American business sector to innovate and go the extra mile.  We need to strengthen the Overseas Private Investment Corporation’s (OPIC) efforts to provide jobs for Americans engaged in public-private partnership projects.  If the U.S. is to remain a major player and partner in the region, there must be a major policy shift in how financing is made available to U.S. companies seeking to do business in Africa. The European Union is also intensifying its trade relations with African nations though Economic Partnership Agreements that were recently signed with some Southern African countries. The U.S needs to move beyond AGOA, which I consider as an investment tool for Americans and a development tool for Africans. I will discuss these issues and others during my upcoming trip to the region, to Liberia, Ghana, Angola, and South Africa.

AfricaBusinessSource.com:  There is an important debate going on right now, heightened by a new book written by Zambian economist, Dambisa Moyo. The book, called “Dead Aid”, levels an indictment on the “development industry” for creating a destructive dependency on foreign Aid in Africa. In a nutshell, she asserts that government aid props up corrupt governments and, in the worst cases, has assisted corrupt regimes that have contributed to the destruction of their countries. She goes even further by proposing a phase out of all government-to-government aid in five years. Not surprising, the development industry doesn’t like her critique including well renowned economists who’ve traditionally called for more aid, like Jeffrey Sachs. Is Dambisa Moyo right about cutting aid to Africa?

Congressman Rush:  U.S. ties with Sub-Saharan Africa today far transcend the humanitarian interests that have frequently underpinned U.S. engagement with the continent. Despite the billions of dollars given by donors, foreign assistance is not providing an appropriate response to the needs of the region. Ms. Moyo, like many scholars, is questioning the effectiveness of this aid and there is a serious call for more trade and investment in the continent.  There is not a single economy that can combat poverty without sustained growth. As Oxford University Professor Paul Collier said, “growth is not a cure-all, but lack of growth is a kill-all.” Given that, I find Ms. Moyo to be very courageous.  I commend her for her book and leadership on this issue.

The topic of “aid vs. trade” is an important one and I am sure many are perplexed about the role each of these concepts plays. It is undeniable that aid is important. You cannot look at an orphan whose parents died from HIV/AIDS and say aid is not important.  I am sure Ms. Moyo understands this.  It is also undeniable that aid does not create an economy.  Ms. Moyo’s critics understand this as well. It is time for Africa to activate its creativity and remove herself from the dependence on aid.  The U.S is doing everything it can to be less dependent on foreign oil.  Africa should also be doing everything it can to be less dependent on foreign assistance. In that sense, the debate created by Ms. Moyo’s book is timely. However, it is too ambitious to say we should cut off aid in five years? Absolutely! Africa holds the key to its own development. I hope that the dialogue on this topic will give birth not to another political game, but will give rise to a U.S. – Africa policy renaissance that will focus on what is best for both the African and American people.

AfricaBusinessSource.com: There are 4 countries in East Asia that were coined ‘Asian Tigers’ due to their rapid growth and expansion in a relatively short amount of time. The Four Asian Tigers which include South Korea, Singapore, Hong Kong, and Taiwan, have a highly educated and skilled workforce and have specialized in areas where they had a competitive advantage. For example, Hong Kong and Singapore became world leading international financial centers, while South Korea and Taiwan became world leaders in information technology and manufacturing. Their economic success stories became known as the Miracle on the Han River and Taiwan Miracle and have been considered role models for many developing countries. Do you think there are some ‘African Lions’ that exist or will likely emerge in the next few years or decades? If so, which countries do you think are most likely to emerge as economic powerhouses? And what circumstances do you think will contribute to that success, if any?

Congressman Rush:  Each region has it strength and its weakness. I am confident that Africa will create its own phenomenon and is on the verge of doing so.  Some countries are still going through challenges while others have made tremendous progress. It is apparent that Africa plays a significant role in meeting the world’s energy needs, supplying new technologies, and providing vital mineral resources. Africa is also at the forefront of countering the transnational threats of terrorism, piracy, global health issues, and trafficking in illegal narcotics and persons. Africa’s natural and human resources, if carefully managed, will contribute to global prosperity and expand economic growth in Africa. For example, the Gulf of Guinea region accounts for over 19.5% of U.S. oil imports in 2008; a share greater than what the U.S. gets from Persian Gulf countries!  The amount of U.S. oil imports from Africa is expected to grow to 25% over the next decade. The Gulf of Guinea region is expected to generate a GDP of $350-billion dollars by the year 2019.  That is more than the current GDP of Russia and close to the current GDP of all Sub-Saharan African countries. On one hand, countries that heavily rely on oil exports are extremely vulnerable to events that disrupt the oil market. On the other hand, rises in prices restrict economic growth in net importing to countries like the U.S. Lasting global prosperity requires a stable energy market. As president Obama said, “In the 21st century, we know that the future of our economy and national security is inextricably linked to one challenge: energy.”  Africa is an asset in this global economy, not a liability.  Members of the caucus fully recognize how exceptionally rich Africa is in human and natural resources. It is time to change the paternalistic approach in dealing with Africa and partner with the continent.

AfricaBusinessSource.com:  If you’d permit me, I’d like to ask about your relationship with your most famous constituent and current U.S. President, Barack Obama. Prior to running for the US Senate, he ran against you for Congress and lost. Considering he’s a former political opponent, are you comfortable working with the Obama administration on issues relevant to the Committees you sit on and chair and more specifically on U.S. Africa trade issues? Do you feel the Administration has the same right level of commitment to improving trade relations with Africa?

Congressman Rush: I sent a letter to the president regarding the formation of APEGc and our agenda.  We are ready to work with his administration to increase trade with Africa.  President Obama is committed to the well being of the African people.  His visit to Ghana is an acknowledgement of the progress being made in young African democracies.  Other U.S. presidents have traveled to sub-Saharan Africa while in office, but none have prioritized a trip to the continent so early in their term.  I am sure he will define a new relationship with the continent and take another step in establishing a new policy based upon mutual respect and collaboration between the nations of Africa and the U.S. This is APEGc’s mission.  We will work in phase with the Obama administration. We will not say “we can” but “we must.”

AfricaBusinessSource.com: Finally, Congressman Rush, How do U.S. and African businesses benefit from the creation of the the Africa Partnership for Economic Growth Caucus (APEGc) and where can they go to get more information?

Congressman Rush:  On both sides of the Atlantic, companies are unaware of the business opportunities available to them.  Members of the caucus will advocate for businesses operating in Africa.  Our office doors are open to them.  They can contact our office for information, request materials, and bring our attention to issues that affect them. We are all committed to African empowerment and economic growth.  With President Obama’s leadership, we have an historical opportunity to make a difference in the lives of African people. With God’s favor, we will participate in this transformational moment and create a zone a security and prosperity in Africa.

Finally, thank you for taking the time to answer our questions. We look forward to your leadership on U.S. Africa trade issues in the U.S. Congress and wish you every success.

Source: Africa Business Source     Image: Africa Business Source

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