DAKAR, Senegal – Despite opposition from Africa’s developed community members, during U.S President Barack Obama’s visit to Goree Island in Senegal, he pronounced expectations of Africa’s emergence into trade. Although President Obama believes that Africa is ready to move away from foreign aid, many worry that the continent’s poorest regions are not yet ready to substitute aid for trade and investments.
The administration’s limited funds arise doubt in opponents. According to Michael Igoe, writer for Devex.com, questions about private sector partnership leverage and sufficient resources for foreign assistance are flooding Africa support programs. Igoe claims that many of the uncertainties come from both members of the Goree island community and influential American businesses.
According to Igoe, when referring to Obama’s visit to their island, Goree island community members referenced the conversation they had with Obama prior to his visit. Stressing a “hand-in-hand” relationship between trade and aid, members of the development community expressed to Obama the equal importance of both aspects of community in ensuring economic growth.
Jeremy Kadden, senior legislative manager at InterAction, a U.S based NGO network, showed his support for the hand-in hand approach in an interview with Devex. Kadden disagreed with Obama’s trade focus and expressed the importance of broad and equal economic benefit distribution. He said, “We just want to make sure the benefits are broadly distributed and they get to the smallholders.” Kadden highlighted the importance of benefit distribution to both individuals who take part in a trade system and those who will not immediately benefit from it.
However, those supporting Obama’s trade-led approach encourage donor-funded programs to take on a more “limited role,” Igoe states. Supporters and organizations like The Gates Foundation and USAID believe that the removal of assistance programs will support Africa’s transition from aid recipient to trade participant. A limited aid role could encourage official foreign assistance to operate as a stepping stone to lead to economic partnerships. Igoe adds that increasing focus on investment partnership as opposed to aid receiving, Africa could begin taking “steps to ensure investment benefit from a favorable regulatory environment.”
Dan Runde, director of the Project on Prosperity and Development at the Center for Strategic and International Studies discussed the necessity of power and infrastructure for societal development with Devex. Runde state, “The more investments in energy you have, the price of energy drops.” Runde places responsibility for this advancement on the African Development Bank and not on foreign aid donors.
Girish Menon, in his article “What Has Aid Ever Done for Growth?” questions the influence of economic growth as result of free trade. In his article Menon presented his opposition towards an Economist article associating global poverty reduction with increased capitalism and free trade. Menon states that The Economist’s article’s focus on trade “simplifies a very complicated problem.”
Menon pointed out that global poverty decreased substantially as aid increased between the years 1990 and 2008. In addition to the 1.8 billion people who gained of access to sanitation in the last two decades, 2 billion people gained access to drinking water. Utilizing data from the World Bank’s Water and Sanitation Program, Menon mentioned the annual economic detriment of aid reduction. Without adequate sanitation, in India alone costs are over 34 billion pounds. Likewise, Nigeria’s poor sanitation costs the regions almost 2 billion pounds a year.
Although aid, growth, and trade is weighed differently among individuals, the power of all three reaps more benefits than any one of them alone.
Source: Huffington Post, DevEx
Photo: Business Insider