Treasury Secretary Paul O'Neill and rock star Bono just wrapped up a "fact-finding" tour of sub-Saharan Africa, during which they drew attention to the poverty and underdevelopment that afflict the continent. While Bono held press conferences criticizing America for being stingy with foreign aid, O'Neill tried to figure out immediate and efficient ways to put American aid to its best use in alleviating the misery in which too many Africans live. He calculated, for example, that it would require about $25 million to drill a sufficient number of wells to provide clean drinking water for 10 million Ugandans.
Unfortunately, some nongovernmental-organization types were eager to explain that what seemed straightforward to O'Neill was really complicated and required money doled out through U.N. programs by international-aid bureaucrats. The New York Times reported how one NGO bureaucrat insisted that drilling and maintaining wells was beyond the capabilities of Ugandans unless undertaken within a structured aid program funded and overseen by -- you guessed it -- international agencies. What arrogance!
Countries are poor because their governments choose bad policies and because facets of their culture and values stifle the natural inclination of individuals to better their lot by working, saving and investing in the future. It may be true that some countries have been driven to such depths of poverty and despair by corrupt, oppressive and brutal leaders that special aid and advice from the United States are required to kick-start development that otherwise would take many years to accomplish.
It is also true that America has adopted protectionist measures that not only hurt our own economy but also throw up more obstacles to the developing world's efforts to modernize. Even the positive Africa Growth and Opportunity Act of 2000 contains American domestic content rules that restrict exports of the two value-added products Africans have, textiles and agricultural products.
No wonder Africans, and most everyone else, consider it duplicitous for America to send in the IMF and World Bank to insist that everyone else lower tariffs, eliminate corporate and farm subsidies, and open their markets to foreign trade while we maintain protectionist tariffs and government subsidies on everything from steel and lumber to agricultural products and textiles.
The fundamental problem in places like sub-Saharan Africa can be traced back to what happened after World War II, when most of the European continent and England turned to highly centralized economic policies, including nationalization of industry in an effort to rebuild their societies. Trickle-down socialism dripped into African colonies, where misguided socialist growth and economic development policies persisted even after independence. When those strategies didn't work, the vestiges of colonialism was fingered as the cause, and foreign aid was taken by guilt-ridden former colonialists to be the solution.
Central planning, government ownership and a preoccupation with equality of outcomes slowed growth and impoverished these nations. Foreign aid combined with socialism to foster political corruption and prevented democratic capitalism from ever gaining a foothold.
As a Wall Street Journal editorial pointed out recently, the nations of sub-Saharan Africa have for many years been at the top of the list of foreign aid recipients while they also have the dubious distinction of continuing to be ranked at the bottom of the list in the
Heritage Foundation's Index of Economic Freedom. Thanks to leaders like presidents Abdoulaye Wade of Senegal, John Kufour of Ghana, Yoweri Museveni of Uganda and Olusegun Obasanjo of Nigeria, that's about to change.
These leaders understand that economic advancement and social improvement can only be realized through open trade and policies that promote free markets, private property and entrepreneurial enterprise. As Wade observes, "I've never seen a country develop itself through aid or credit."
Museveni is even more explicit: "For too long, Africans and their partners in the West have looked to international aid as the answer to the poverty. There is now a broad agreement that no national or international strategy for addressing poverty can be successful unless it promotes expanded trade and investment."
The goals and strategies of these new African leaders are congruent with the goals of a summit initiated before his death last year by the great civil rights leader Dr. Leon H. Sullivan. The African-African American Summit is chaired by Ambassador Andrew Young, with whom I am proud to serve as vice chairman. This month we will meet to bring together American and African business and political leaders to discuss issues crucial to sub-Sahara Africa, such as trade, investment, education and health care. We will continue to discuss ways and means to promote democratization, economic growth and social progress on the African continent, looking to these African role models to help lead the way.