Doing Good for Africa in AfricaCommentary by Pete du Pont
August 28, 2002
Johannesburg, South Africa provides the perfect setting for the World Summit on Sustainable Development running from the last week in August through first week in September.
Why? Because, South Africa, in its gleaming cities and resorts, provides an example of the tremendous wealth and economic and social progress that all Africans could obtain if only the economic and political institutions in their countries were stable, democratic and economically open. In its unsightly, impoverished shanty towns, it also symbolizes the very problem the forum is meant to address: How to bring sustainable economic progress to the poor and malnourished in developing countries - of which African countries are the poorest.
Starvation and malnourishment, illness and mortality from treatable diseases, and lack of access to safe-drinking water and medical care plague billions of the worlds poor. By some estimates as many as 2.8 billion people live on less than $2.00 a day, 800 million people - including more than 150 million children - are undernourished, 1.1 billion people lack access to safe drinking water and 2.4 billion lack improved sanitation. Thus, the Johannesburg summit is rightly focused on helping underdeveloped countries improve their lot. The question is how.
Anti-globalism protesters and politicians have nothing to offer the world's poor. This motley collection of religious zealots, environmental extremists and anti-immigrant isolationists, each reject free trade, the spread of advanced agricultural biotechnology and natural resource development in non-industrialized countries. Yet, these are the very things that offer the only real hope for material improvement in developing countries. Nothing would be more morally repugnant and politically objectionable than would be if the developed world actually followed the advice of the anti-globalists.
Certainly, developing countries will push for financial and technological aid, in one form or another, from industrialized countries. Ten years ago, at the Rio Earth Summit, industrialized countries pledged to contribute .7 percent of their GNP to development aid. Yet even during the relatively good economic times of the 1990s, no developed country met its commitments. Now, when economic times aren't so rosy, developed countries are unlikely to substantially increase aid, though President Bush did announce a $4.5 billion dollar aid plan for Africa.
More importantly, it is trade, not aide that underdeveloped countries need to raise the fortunes of their people. And that's something Western leaders can do something about. Among the policies of industrialized countries which stifle economic progress in developing countries, few are more pernicious than trade barriers in the form of discriminatory tariffs and duties placed upon goods entering the country and subsidies and tax breaks favoring producers in developed countries.
Agriculture is one area where subsidies, tax breaks and tariffs have an especially negative impact on economic progress in the developing world. For instance, the $190 billion Farm Security and Rural Investment Act of 2002, passed by Congress and signed by President Bush, authorizes federal price supports for commodities and expanded agricultural trade. This bill undercuts support of freer trade in the ongoing Doha round of trade negotiations, where the United States is seeking to reduce agricultural subsidies and tariffs worldwide. Currently, a quarter of U.S. farm income is generated from exports. Access to foreign markets is crucial for agricultural profitability. However, increasing subsidies to U.S. agriculture may provoke retaliatory tariffs by other countries. The increased subsidies have been criticized by the World Trade Organization and European Union countries, which argue that farm subsidies are currently three times higher in the United States than in Europe.
Furthermore, exports of subsidized crops increase poverty in developing countries. Crop subsidies allow developed countries to flood poor countries with cheap imported food. Farmers in developing countries cannot compete domestically or on the world market with their subsidized competitors.
The U.S. is not alone in providing agricultural price supports, however. The European Union also provides subsidies and erects other trade barriers to protect its agricultural sector from competition with foreign farmers. Overall, wealthy countries' export subsidies and import tariffs cost poor countries $100 billion a year in lost income, the World Bank estimates - more than twice the amount of aid they receive from the developed world each year.
There is no "magic bullet" solution to poverty in the developing world. But if developing countries at the summit could simply convince recalcitrant industrialized nations to actually act upon their rhetoric and open their borders to free trade, they will have taken a major step on the road to improving the economic prospects for the world's poor.