WASHINGTON, June 30 (UPI) -- As leaders from the world's richest nations prepare to gather in the Scottish highlands next week, how the global community can unite to tackle poverty in Africa will be one of the biggest issues of concern for those watching the meetings closely.
For all the talk of debt relief and humanitarian aid to the continent, precious little has been said about the possibility of doing business in Africa and boosting technological transfer to some of the world's poorest countries, if at all.
Still, economists and even African leaders broadly agree donor aid alone will not be sufficient to get Africa's most impoverished nations back on their feet, no matter how generous the financial assistance might be. Development economists are well aware Africa and Asia were on similar income levels as recently as the 1960s, but the wealth gap has only continued to widen over the years as East and Southeast Asia keep attracting technologically advanced investments within their own borders, which in turn allows countries in those regions to adopt that knowledge for their own gains, from producing televisions to automobiles to cell phones.
"Developing countries need foreign investment in addition to public foreign investment (from international financial institutions and the governments of wealthier nations), and they need technology transfer too," Sandra Polaski, director of the trade and development project at the Carnegie Endowment for International Peace in Washington, told United Press International.
At the same time, no country is too poor to benefit from trade, particularly if it allows countries to increase its technological knowledge as well, argued Christopher Preble, director of foreign policy studies at the Cato Institute, a think tank also in Washington.
"Every country in the world has something of value to the rest of the world," Preble told UPI, adding in the case of sub-Saharan Africa, petroleum and diamond resources were highly attractive to the wealthier nations. At the same time, Preble acknowledged the lack of infrastructure, such as good roads and reliable energy supplies -- in addition to corruption and weak rule of law -- made many African countries less attractive to private investors, even though that has not necessarily kept them away from putting their money in other regions.
Indeed, even those multinational corporations that have kept Africa off their radar screens have expressed interest in putting money into conflict zones such as Iraq.
One executive at a U.S. blue-chip high-tech company told UPI, on condition of anonymity, that his company was "seriously considering" investing in Iraq, despite the continued violence and political instability, "because of the continued presence of the United States ... and potential of the Middle East."
When asked whether his company saw such opportunities in sub-Saharan Africa, he said there was not only less potential for a rapid growth in personal income in the region than in war-torn Iraq, but also the scant U.S. interest in the region made it appear "more as a charity case and not a business opportunity."
Polaski said instead of the United States and other wealthy nations from the Group of Eight industrialized countries simply boosting the amount of debt to be written off for Africa, they should consider boosting the international presence in the region and allow international organizations to take on a greater role to reassure potential investors.
She added there was much to be learned from Cambodia's experience, when the country's textile industry was allowed greater access to U.S. markets if it continued to abide by international labor regulations.
The International Labor Organization in Geneva, Switzerland, was tasked to monitor whether Cambodian factories were abiding by global standards on child labor and other issues. That action gave confidence to many foreign companies to invest in Cambodia, despite its being one of the poorer countries in the world.
Since that deal, six years ago, Cambodia's textile industry has flourished and is now the country's biggest employer, and Polaski suggested similar trade agreements could be made with African nations.
Direct international involvement in enterprise could "give more confidence to foreign investors...and do more for the country," including providing technological transfer necessary for sustainable growth, she said.
Jeffrey Sachs, a professor at Colombia University and one of the world's leading advocates for boosting aid to Africa, told reporters during a teleconference earlier this week he thinks simply sending food aid is not enough to improve the continent's economic outlook.
Building roads, supplying electricity and educating a trained workforce "are what makes a business environment attractive for the private sector," Sachs said.
Asked by UPI how technology transfer could improve Africa's growth prospects, he replied that with the right investments, "Africa would have the same kind of development that Asia is having right now."
At the same time, Sachs said, investments should be going not into areas that could lead to immediate cash gains but prolong the life of corrupt governments, such as the oil sector. Instead, the key priority areas were health, education, agriculture and infrastructure.
--
E-mail: [email protected]
