[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
U.S.-AFRICA TRADE RELATIONS: CREATING A PLATFORM FOR ECONOMIC GROWTH
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON COMMERCE, TRADE,
AND CONSUMER PROTECTION
OF THE
COMMITTEE ON ENERGY
AND COMMERCE
AND THE
SUBCOMMITTEE ON AFRICA
AND GLOBAL HEALTH
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
JUNE 24, 2009
__________
Serial No. 111-55
(Committee on Energy and Commerce)
Serial No. 111-79
(Committee on Foreign Affairs)
__________
Printed for the use of the Committee on Energy and Commerce and the
Committee on Foreign Affairs
Available via the World Wide Web: http://energycommerce.house.gov
and http://www.foreignaffairs.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
HENRY A. WAXMAN, California, Chairman
JOHN D. DINGELL, Michigan JOE BARTON, Texas
Chairman Emeritus Ranking Member
EDWARD J. MARKEY, Massachusetts RALPH M. HALL, Texas
RICK BOUCHER, Virginia FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida
BART GORDON, Tennessee NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky
ANNA G. ESHOO, California JOHN SHIMKUS, Illinois
BART STUPAK, Michigan JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York ROY BLUNT, Missouri
GENE GREEN, Texas STEVE BUYER, Indiana
DIANA DeGETTE, Colorado GEORGE RADANOVICH, California
Vice Chairman JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California MARY BONO MACK, California
MIKE F. DOYLE, Pennsylvania GREG WALDEN, Oregon
JANE HARMAN, California LEE TERRY, Nebraska
JAN SCHAKOWSKY, Illinois MIKE ROGERS, Michigan
HILDA L. SOLIS, California SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York PHIL GINGREY, Georgia
JIM MATHESON, Utah STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont
(ii)
Subcommittee on Commerce, Trade, and Consumer Protection
BOBBY L. RUSH, Illinois
Chairman
JANICE D. SCHAKOWSKY, Illinois CLIFF STEARNS, Florida
JOHN P. SARBANES, Maryland Ranking Member
BETTY SUTTON, Ohio RALPH M. HALL, Texas
FRANK PALLONE, Jr., New Jersey J. DENNIS HASTERT, Illinois
BART GORDON, Tennessee ED WHITFIELD, Kentucky
BART STUPAK, Michigan CHARLES W. ``CHIP'' PICKERING,
GENE GREEN, Texas Mississippi
CHARLES A. GONZALEZ, Texas GEORGE RADANOVICH, California
ANTHONY D. WEINER, New York JOSEPH R. PITTS, Pennsylvania
JIM MATHESON, Utah MARY BONO MACK, California
G.K. BUTTERFIELD, North Carolina LEE TERRY, Nebraska
JOHN BARROW, Georgia MIKE ROGERS, Michigan
DORIS O. MATSUI, California SUE WILKINS MYRICK, North Carolina
KATHY CASTOR, Florida MICHAEL C. BURGESS, Texas
ZACHARY T. SPACE, Ohio
BRUCE L. BRALEY, Iowa
DIANA DeGETTE, Colorado
JOHN D. DINGELL, Michigan (ex
officio)
------
COMMITTEE ON FOREIGN AFFAIRS
HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American CHRISTOPHER H. SMITH, New Jersey
Samoa DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey ELTON GALLEGLY, California
BRAD SHERMAN, California DANA ROHRABACHER, California
ROBERT WEXLER, Florida DONALD A. MANZULLO, Illinois
ELIOT L. ENGEL, New York EDWARD R. ROYCE, California
BILL DELAHUNT, Massachusetts RON PAUL, Texas
GREGORY W. MEEKS, New York JEFF FLAKE, Arizona
DIANE E. WATSON, California MIKE PENCE, Indiana
RUSS CARNAHAN, Missouri JOE WILSON, South Carolina
ALBIO SIRES, New Jersey JOHN BOOZMAN, Arkansas
GERALD E. CONNOLLY, Virginia J. GRESHAM BARRETT, South Carolina
MICHAEL E. McMAHON, New York CONNIE MACK, Florida
JOHN S. TANNER, Tennessee JEFF FORTENBERRY, Nebraska
GENE GREEN, Texas MICHAEL T. McCAUL, Texas
LYNN WOOLSEY, California TED POE, Texas
SHEILA JACKSON LEE, Texas BOB INGLIS, South Carolina
BARBARA LEE, California GUS BILIRAKIS, Florida
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
Subcommittee on Africa and Global Health
DONALD M. PAYNE, New Jersey, Chairman
DIANE E. WATSON, California CHRISTOPHER H. SMITH, New Jersey
BARBARA LEE, California JEFF FLAKE, Arizona
BRAD MILLER, North Carolina JOHN BOOZMAN, Arkansas
GREGORY W. MEEKS, New York JEFF FORTENBERRY, Nebraska
SHEILA JACKSON LEE, Texas
LYNN WOOLSEY, California
C O N T E N T S
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Page
Witnesses
Florizelle Liser, Assistant U.S. Trade Representative of Africa,
Executive Office of the President, Office of the United States
Trade Representative........................................... 2
Prepared statement........................................... 4
Answers to submitted questions \1\...........................
Leocadia Zak, Acting Director, U.S. Trade and Development Agency. 10
Prepared statement........................................... 13
Answers to submitted questions............................... 160
Holly Vineyard, Deputy Assistant Secretary for Africa, Middle
East, and South Asia, International Trade Administration....... 18
Prepared statement........................................... 20
Answers to submitted questions \2\...........................
Stephen Hayes, President and CEO, The Corporate Counsel on Africa 41
Prepared statement........................................... 43
Answers to submitted questions \3\...........................
Greg Lebedev, Senior Advisor to the President, U.S. Chamber of
Commerce, Chairman, Center for International Private Enterprise 49
Prepared statement........................................... 52
Answers to submitted questions \4\...........................
Lisa D. Cook, Assistant Professor, James Madison College,
Department of Economics, Michigan State University............. 59
Prepared statement........................................... 61
Karen Tandy, Senior Vice President, Public Affairs and
Communications, Motorola, Inc.................................. 64
Prepared statement........................................... 66
Submitted Material
``A Conversation Behind Closed Doors,'' publication of May 2009
by Africa Business Initiative, U.S. Department of Commerce..... 84
``The United States and Africa,'' publication of March 4, 2009 by
The Corporate Council on Africa................................ 100
----------
\1\ Ms. Liser did not respond to submitted questions for the
record.
\2\ Ms. Vineyard did not respond to submitted questions for the
record.
\3\ Mr. Hayes did not respond to submitted questions for the
record.
\4\ Mr. Lebedev did not respond to submitted questions for the
record.
U.S.-AFRICA TRADE RELATIONS: CREATING A PLATFORM FOR ECONOMIC GROWTH
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WEDNESDAY, JUNE 24, 2009
House of Representatives,
Subcommittee on Commerce, Trade,
and Consumer Protection,
Committee on Energy and Commerce,
joint with Subcommittee on Africa
and Global Health
Committee on Foreign Affairs
Washington, DC.
The subcommittees met, pursuant to call, at 3:35 p.m., in
room 2322 of the Rayburn House Office Building, Hon. Bobby Rush
(chairman of the Subcommittee on Commerce, Trade, and Consumer
Protection) presiding.
Present from the Subcommittee on Africa and Global Health:
Representatives Payne, Woolsey, Watson, Lee, and Smith.
Present from the Subcommittee on Commerce, Trade, and
Consumer Protection: Representatives Rush and Radanovich.
Mr. Payne [presiding]. We will bring this delayed hearing
to order. This is a hearing of the Subcommittee on Africa and
Global Health and the Subcommittee on Commerce, Trade, and
Consumer Protection. Chairman Rush, hopefully, will be here
soon. Our votes have just ended temporarily. This is abnormal,
but for the last several days, there have been political
procedural votes being done by the opposition. And its
purpose--to delay and disrupt the workings of the House. So I
apologize. It is something beyond our control. A member can
call for a vote to adjourn any time they want to, and that is
what has been happening.
So, at this time, I will not make any opening statement. We
will move right to the first panel, panel one. We have our
Assistant U.S. Trade Representative for Africa, Ms. Liser; our
acting Director of the U.S. Trade and Development Agency, Ms.
Zak; and the Deputy Assistant Secretary, Africa, Middle East,
and South Asia, International Trade Administration, Ms.
Vineyard.
We will begin. I won't take time to read the background.
Normally we do that in our committee, but because of the time,
we will go right into witness testimony and begin with Ms.
Liser. If you would start, we would be pleased. Thank you.
STATEMENTS OF FLORIZELLE LISER, ASSISTANT U.S. TRADE
REPRESENTATIVE FOR AFRICA, EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE; LEOCADIA ZAK,
ACTING DIRECTOR, U.S. TRADE AND DEVELOPMENT AGENCY; AND HOLLY
VINEYARD, DEPUTY ASSISTANT SECRETARY FOR AFRICA, MIDDLE EAST,
AND SOUTH ASIA, INTERNATIONAL TRADE ADMINISTRATION
STATEMENT OF FLORIZELLE LISER
Ms. Liser. Chairman Payne, thanks to you and to Chairman
Rush and the other members for holding this hearing. I am
pleased to be here to appear before you on U.S.-African trade
relations and to share some successes and challenges we face in
promoting African economic growth through expanded trade and
investment.
President Obama and U.S. trade representative Ron Kirk are
committed to a new approach on trade. So, we are seeking ways
to sharpen U.S. trade policy and to shore up the foundations of
global trade today. Strengthening the rules-based system will
boost trade and promote development for the long term for
America, for Africa, and the world. That is why President Obama
and Ambassador Kirk are committed to a successful conclusion of
the World Trade Organization's Doha Round, an outcome that is
ambitious and opens new markets for all, including for
Africans.
We are also looking at our trade-preference programs,
including the African Growth and Opportunity Act with an aim to
make them more effective and to ensure that the developing
countries that need them the most are the beneficiaries.
Africa's share of global trade is declining. Sub-Saharan
Africa's share of global trade is less than 2 percent, down
from 6 percent in 1980. If that share were to increase by just
one percentage point to 3 percent, it would generate additional
export revenues of $70 billion annually, which is nearly three
times the amount of annual assistance to Africa from all
donors.
Also, exports from the continent are concentrated in
primary commodities, such as petroleum, minerals, cocoa, and
coffee. There is little of the manufacturing engine in Sub-
Saharan Africa that has fueled economic growth and reduced
poverty in other regions of the world.
Even in agriculture, which many see as Africa's strong
suit, the recent trend lines have not been positive. In 2005,
the region switched from being a net exporter to a net importer
of agricultural products.
We believe that export diversification and further
processing of agricultural products into higher value exports
could help improve food security in the region by addressing
issues of availability and stability of food supply.
But, even with that bad news, U.S. trade with Africa is
expanding and diversifying. AGOA is an important tool that has
helped increase both the volume and diversity of U.S. trade
with Sub-Saharan Africa. And U.S. imports under AGOA total
$66.3 billion in 2008, more than eight times the amount in
2001. Now, while much of the increase is attributable to oil,
non-oil AGOA imports more than tripled to $5.1 billion and a
number of AGOA product sectors experienced sizable increases
during this period, including, for example, beverages,
vegetables, cut flowers, certain footwear, textiles, and
apparel.
Though African textiles and apparel producers have faced
increased competition and a declining share in the U.S. market,
textiles and apparel still accounted for 22 percent of all AGOA
non-oil trade in 2008. So, it is still an important sector.
We are trying to address the challenges. We know that
market access alone is insufficient to increase U.S.-Africa
trade. That is why AGOA and trade capacity building assistance
are the twin pillars of U.S.-Africa trade policy. In 2008, the
U.S. devoted over $1 billion to trade-capacity building in Sub-
Saharan Africa, and the five-year $200 million presidential
initiative called the African Global Competitiveness Initiative
is helping to expand African trade and investment with the U.S.
and support African regional strategies to grow Africa's share
of world trade.
Dialogue with Africa about key trade and investment issues
remains important, and we wanted to share with you that the
eighth AGOA forum will be held in Kenya on August 4 to 6, 2009.
Its theme is realizing the full potential of AGOA through
expansion of trade and investment. As always, the forum will be
an important opportunity to discuss the challenges in expanding
U.S.-Africa trade and investment relations. We look forward to
the participation of members of Congress and their staff and
the forum.
In conclusion, through ongoing dialogue and a range of
initiatives, the Administration is looking forward to working
with Congress to strengthen U.S.-Africa trade relations and
through trade to create a platform for economic growth in
Africa. Thank you.
[The prepared statement of Ms. Liser follows:]
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Mr. Payne. Thank you. The co-chair of the Commerce
Committee that is really having jurisdiction over this has
come. We--since folks were here for an hour and a half, we
tried to get moving, but I will turn over the meeting to
Representative Rush, and there may be procedural things that
you do with the Commerce Committee that you don't do in Foreign
Affairs.
Mr. Rush. Thank you. Well, I think the protocol is pretty
much on the sidelines, Chairman Payne. I just want to add my
voice of apology to everybody who is here. This is the
beginning of a new way that we are going to be operating around
here, I think, for the foreseeable future. And it is dilatory,
and I don't think that it is beneficial to the institution nor
to the American people. But we have to do what we have to do,
so, when they call a vote, we have to respond. Please accept my
sincere apologies and the apologies of the Subcommittee on
Commerce, Trade, and Consumer Protection.
I know how valuable your time is, and we want to again
welcome you and thank you for coming and thank you for
participating. I will proceed now recognizing the next witness,
Ms. Leocadia Zak, who is the acting director of the U.S. Trade
and Development Agency. And I think that the guidelines of the
opening statement is 2-and-a-half minutes or--5 minutes or
thereabouts, OK. Ms. Zak, you are recognized.
STATEMENT OF LEOCADIA ZAK
Ms. Zak. Thank you very much, Chairman Payne, Chairman
Rush. Thank you and the other members of the subcommittee for
this opportunity to testify today about the U.S. Trade and
Development Agency's role in advancing economic development in
Africa and creating jobs here in the U.S. as well.
I welcome the committee's interest in USTDA's program and
look forward to briefly outlining our programs and some
important successes.
I know that you have emphasized the exploration of new
markets as a vital element for stimulating the U.S. economy. I
could not agree more, and I also agree that African development
and trade priorities are something that we must focus on. This
is also precisely the mission of USTDA, to promote development
in emerging markets while creating opportunities for U.S.
exports and the creation of U.S. jobs.
How do we do this? In particular, we focus on areas where
U.S. business is strong, such as energy, telecommunications,
transportation, and the environment. Using this model, we have
seen the benefits that exports provide to host countries around
the world and the U.S. economy. In African, on a 10-year
rolling basis for every dollar of USTDA-program funds expended,
we have seen a return of $24 in U.S. exports. During my time
here today, I would like to provide you with concrete examples
of how USTDA has assisted export activities and how African
nations have benefited and how U.S. companies large and small
have also benefited.
In 2002, Roeslein and Associates, a 200-person
manufacturing company based in St. Louis, Missouri, approached
USTDA with an idea for selling American-built aluminum can
manufacturing equipment in Nigeria. The company had identified
Nigeria as a potential new market and asked that the agency
share the cost of a feasibility study to confirm the market
potential and economic and financial viability of the
manufacturing of aluminum cans in Nigeria.
USTDA provided the assistance requested by this small,
Midwestern company, recognizing both the commercial viability
of the project and the likelihood for success for project
implementation. Ultimately, Roeslein secured a contract for $30
million to build, ship, and reassemble an aluminum can
manufacturing facility in Nigeria that was financed by the
Export/Import Bank of the United States.
In January of this year, I was invited to Roeslein facility
in Red Bud, Illinois, to witness the sendoff of this newly
manufactured equipment. During the visit, I had the opportunity
to meet with several workers, who told me how difficult times
were in Red Bud and how grateful they were for our assistance.
To top it off, Roeslein provided USTDA with a check fully
repaying the grant that we had provided to them that opened the
doors to them in Nigeria.
My second example involves a major infrastructure need
common in Africa: energy. Just under a quarter of Sub-Saharan
Africa's population has access to electricity. To put this into
perspective, Sub-Saharan Africa generates 63 gigawatts of power
for 770 million people, about the equivalent that Spain
provides for a population of 40 million.
Recognizing the need for more and diversified energy
sources, USTDA partnered with Botswana Development Corporation
to fund a feasibility study to determine the viability of a
coal-bed methane gas extraction, considered clean energy source
in Botswana. Once the project was determined to be feasible,
USTDA also funded a reverse trade mission that brought key
Botswana decision makers to the United States to examine
production facilities and meet with U.S. industry,
representatives, and potential financiers of the project.
Based on the positive recommendations for coal-bed methane
project, the Overseas Private Investment Corporation provided
an $8.5 million investment guarantee to Kalahari Gas
Corporation to fund the drilling of a new clean-energy source.
Since that initial investment, U.S. companies have benefited
from continuing expansion of this project, having exported a
total of $52.9 million in U.S. goods and services.
At the same time, it has provided a crucial need in
Botswana. The Roeslein and Kalahari gas examples are but two of
many in which USTDA has been the catalyst for assisting U.S.
companies small and large in expanding their markets both in
Africa and around the world. We often work in consultation with
the private sector, including those testifying here today, such
as Motorola, the Corporate Counsel on Africa, and the U.S.
Chamber. And we have a very close collaborative relationship
with those on the panel here today, USTDR and the Department of
Commerce.
In conclusion, I would like to thank the subcommittee for
inviting me here today. Exports to Africa benefit both Africa
and the U.S. economy. Before coming here today, I talked with
our staff that is responsible for Africa and asked them why
they enjoy their job. And they said because it makes a
difference. It makes a difference in Africa, and it makes a
difference here in the United States as well.
I look forward to working with you to make the difference
both in Africa and here in the U.S. Thank you very much.
[The prepared statement of Ms. Zak follows:]
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Mr. Rush. The chair thanks the gentlelady. The chair now
recognizes the next witness, Ms. Holly Vineyard. She is the
Deputy Assistant Secretary for Africa, the Middle East, and
South Asia in the International Trade Administration. Ms.
Vineyard, you are welcome, and please begin your opening
statement.
STATEMENT OF HOLLY VINEYARD
Ms. Vineyard. Thank you. Chairman Rush, Chairman Payne,
Ranking Member Radanovich, Ranking Member Smith, other members
of the committee, thank you for this opportunity to speak with
you today about U.S.-Africa trade relations. I will summarize
the points I make in my prepared statement and request that it
be included in the record.
Many countries in Africa continue to reap the benefits of
sound changes to economic policy and improved governance
undertaken during the last decade. Some are becoming key
emerging markets for U.S. companies. So, while the current
global economic situation has had a negative impact on them, a
significant number of African countries have still maintained
positive growth.
Thanks in part to AGOA, trade between the United States and
Sub-Saharan Africa has more than tripled since 2001. Still, our
two-way trade with Sub-Saharan Africa measured only 3 percent
of our total trade with the world last year, and our non-oil
imports from Sub-Saharan Africa measured less than 1 percent of
all of our imports.
Increasing two-way trade with Africa could play a key role
in boosting African export revenue, and additional U.S. exports
to Sub-Saharan Africa will have a positive effect on the U.S.
economy. As former Secretary of Commerce Ron Brown explained,
we want to contribute to Africa's development through mutually
beneficial two-way trade. And our current Secretary Gary Locke
recently said in addition to creating jobs and economic growth,
goods and services traded can also profoundly improve people's
quality of life. Trade can hasten democracy and the spread of
freedom. Trade can speed the delivery of transformative ideas
and technology.
But, in order for U.S. countries to expand their ties with
Sub-Saharan Africa, many African governments will need to
address a series of obstacles. A recent World Bank Report noted
progress in many African countries. Senegal, Burkina Faso, and
Botswana ranked among the top 10 global reformers. The report
found though that regulatory and administrative burdens to
entrepreneurs need to be reduced as they remain higher in
Africa than in any other region of the world.
The U.S. Chamber of Commerce's report on how corporate
America really views Africa focused on the following
impediments. African markets represent a difficult business
case in terms of risk versus reward, corruption, and
opportunity cost. The report also highlighted the need for
improved infrastructure and stronger protection and enforcement
of intellectual property rights, IPR.
Both reports underscore the importance of IPR. In the
International Trade Administration, we view inadequate IPR
production and enforcement as threatening American interests as
well as Africa's own capacity to attract investment, collect
tax revenue, and build local industry. Counterfeit goods pose a
major health and public safety concern. We have worked with
African stakeholders by providing technical assistance and
capacity building.
This is an example of the kind of work we have done to help
make it easier for U.S. companies to do business and, at the
same, time to help strengthen business climates in African
countries. We work with U.S. companies to resolve barriers to
trade and investment. We currently have 250 active market
access and compliance cases, and 38 of those are in Africa.
Nearly one-third of the Africa cases we initiated last fiscal
year were on behalf of small and medium-sized enterprises.
Our commercial service operates a network of trade
professionals in 109 U.S. locations and in 77 countries,
including five in Sub-Saharan Africa. In fiscal year 2008,
these offices reported over $860 million in exports that they
supported for U.S. companies.
I serve in ITA's market access and compliance unit. We work
hand-in-hand with the commercial service. Policy and promotion
are two sides of a coin. For instance, I coordinate with our
domestic offices when I conduct outreach within the United
States, including, Chairman Rush, when I visited your district
in 2006 shortly after a trip that Flori and I took to Liberia
to talk to your constituents about opportunities in that
country. I accompanied our former director general of the
commercial service on the trade mission that he lead to Sub-
Saharan Africa last year. And we are working closely with our
commercial office in Nairobi as we prepare for the AGOA forum
that Flori mentioned.
Despite obstacles to trade and investment with Sub-Saharan
Africa, there has never been a better time for U.S. companies
wishing to explore these markets, and ITA offers the tools and
services to help them. We look forward to working with you,
your staff, and your constituents, whether here in Washington,
in your districts, or on the African continent.
Thank you again for this opportunity, and I look forward to
your questions.
[The prepared statement of Ms. Vineyard follows:]
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Mr. Rush. Thank you very much for your opening statement.
The chair recognizes himself for 5 minutes, but before the
chair do, I ask unanimous consent that the opening statement of
the members of both subcommittees be entered into the record.
We are trying to save some time, so if members want to submit
their opening statements for the record, I ask for unanimous
consent, and hearing no objection, members will submit their
opening statements for the record.
I also at the same time--the Ranking Member Mr. Radanovich
has asked for unanimous consent to include these two items into
the record. ``A Conversation Behind Closed''--the chair
recognizes Mr. Radanovich.
Mr. Radanovich. Thank you, Mr. Chairman. I appreciate that
unanimous consent request on ``A Conversation Behind Closed
Doors'' by the African Business Initiative, and, also, ``United
States and Africa'' a publication of the Corporate Counsel on
Africa.
[The information appears at the conclusion of the hearing.]
Mr. Rush. Hearing no objections, so ordered. The chair
recognizes himself for 5 minutes for the purposes of
questioning the witnesses. There have been a concern about the
staffing of the FCS offices in Africa. In section 125 of AGOA,
Congress found that FCS's presence in Africa had been reduced
since the 1980s and that the level of staff in 1997, which was
seven offices in four countries, did not ``adequately service
the needs of U.S. businesses attempting to do business in
Africa.''
Accordingly, the legislation required the posting of at
least 20 FCS offices in not less than 10 African countries by
December 31, 2001 ``subject to the availability of
appropriations.'' I guess that was the caveat. Ms. Liser and
Ms. Vineyard, would you address the staffing mandates of AGOA?
Have they been met, or has the FCS been fully staffed? And if
not, why hasn't it been fully staffed? And has the
Administration requested additional staffing? And has the
Congress provided additional funding appropriations for it? Ms.
Liser, you can start.
Ms. Liser. Chairman Rush, I would like to take an
opportunity to say something more broadly about----
Mr. Rush. Please.
Ms. Liser (continuing). The staffing for AGOA.
Mr. Rush. Sure.
Ms. Liser. But, I think it is appropriate to turn to Holly
Vineyard since the FCS is really under the Department of
Commerce.
Mr. Rush. OK, Ms. Vineyard.
Ms. Vineyard. Thank you. We have recognized that ITA's
international presence in many of the world's critical emerging
markets, including Africa, needs to be expanded in order for us
to more aggressively support export-related job creation and
maintenance. We sought an additional $5.2 million to build a
more robust presence in these challenging markets. ITA
personnel on the ground in these areas would help U.S. firms
navigate through the often confusing export barriers and help
match these firms with potential customers, partners, or
distributors.
The House did not include this requested increase, and we
still believe that our expanded presence is an important
component to opening the markets in Africa to U.S. businesses.
Mr. Rush. So, there hasn't been an increase in
appropriation even though the Congress dictated that that
should be the case, that there should be an increased presence
on your part and more resources available to you?
Ms. Vineyard. That is correct, Chairman. Last week, in the
House's consideration of the Commerce Justice of Science
Appropriations Bill, the request for the additional $5.2
million was not included.
Mr. Rush. OK, Ms. Liser, you had----
Ms. Liser. Yes, I just wanted to share with you, Chairman
Rush and Chairman Payne and the others, that as the agency that
coordinates with all of the other government agencies on the
implementation of AGOA, that it is important to know that we
have a number of people both here and in Africa that are active
participants in implementing AGOA. We have people from TDA,
from the Department of Commerce, of course. We also have people
from the State Department who are at the post. We have people
from the Department of Agriculture.
And when we do our trade and investment framework agreement
meetings throughout the continent, where we are trying to
enhance trade and investment with the countries that are AGOA
eligible, we often take a very large team of government
agencies with us, OPIC, Exin Bank, Department of Labor. So, we
feel to some extent that we do have a strong team that is
looking at how we can best work together in the Administration
to implement what we hope to accomplish under AGOA.
Mr. Rush. OK, what kind of training do these individuals
have? Are they trained on the type of activities that will
promote the AGOA mandate? Or are they--these are not permanent?
These are interim and temporary assignments that individuals in
your department might fulfill?
Ms. Liser. No, actually what we are drawing on is really
the strengths and the mandates of a number of government
agencies. Almost every agency--and I know I have left out a
number of them, Small Business Administration, almost all of
them have offices with permanent staff that are working on
Africa and on expanding trade and investment.
Each has a different mandate, but we all work, I think,
collectively and in a coordinated fashion. So, again, we are
looking at, just as an example, the Department of Agriculture
has a number of people that are helping us to improve the
agricultural standards of the Africans. And they have even
placed on the ground at our regional trade hubs, which are run
by AID. I didn't mention AID. They are one of our biggest
agencies that are working to implement AGOA. And on the ground,
we have placed at the regional trade hubs throughout Africa
expert from the Animal, Plant, Health Inspection Service. The
Africans had complained that they could not meet the U.S.
sanitary and vital sanitary standard.
So, I just wanted to share that we continue through a
number of agencies and their mandates and their staffs to
implement the goals of AGOA.
Mr. Rush. So, am I to just--this is my final question. Am I
just to then conclude that you don't need the additional
appropriations?
Ms. Liser. We didn't say that.
Mr. Rush. All right.
Ms. Liser. Mr. Chairman, you did not hear me say that.
Mr. Rush. OK, I thought maybe----
Ms. Liser. We would definitely welcome a strengthening of
whatever support we can get through appropriations for all of
our respective mandates and collectively to do what we can to
implement AGOA. Thank you.
Mr. Rush. Thank you very much. The chair now recognizes the
gentleman from California for 5 minutes, Mr. Radanovich.
Mr. Radanovich. Thank you, Mr. Chairman, and I want to
thank you for holding this hearing. And I want to welcome the
witnesses to the committee hearing. I do have a question for
each. Ms.--is it Liser? Ms. Liser? Thank you. You state that
one of the ways that you are looking to shore up global trade
is supporting the global rules-based trading system. In looking
at Sub-Saharan Africa, which countries need improvements? Which
are closer to that standard? Can you kind of give me an
overview to Sub-Saharan Africa with that regard?
Ms. Liser. Certainly. First of all, the Africans as a group
are the largest regional grouping of countries within the World
Trade Organization. I remember when I first started working on
trade issues and would go to Geneva when it was still the GAT
before it became the WTO, you did not see very many Africans at
the table at all. And now, when you go back to Geneva, you see
many Africans, who are there at the table, and they are active
in the negotiations in the WTO.
So, first of all, as a group, we think that they are indeed
abiding by the rules-based system and are very active in
promoting their interest in the negotiations and in making sure
that they benefit from the global trading system.
In terms of specific countries, I think for Africa, part of
the issue is they have, as I said earlier, a relatively small
share of world trade. Even with all of their rich resources on
the continent, they have anywhere between 2 and 3 percent of
world trade. So, the issue for them has to do with a lot of the
supply-side constraints. They have transportation that is
expensive and inadequate in many cases, high cost of energy. I
have not visited one factory producing products in Africa that
did not have a backup generator. So, that adds cost, and so----
Mr. Radanovich. Can you kind of outline, can you give me an
idea of the countries in Sub-Saharan Africa?
Ms. Liser. The particular ones that----
Mr. Radanovich. Perhaps, the ones that are doing better
than others, the ones that need the most help.
Ms. Liser. Well, I think as a group, they need a lot of
support, and we are trying to give it to them. But, in terms of
countries that are doing very well, South Africa is doing very
well. In fact, their trade with the U.S. grew by about 71
percent last year. They also are the largest beneficiary of
AGOA, a non-oil beneficiary of AGOA. But, there are a number of
countries that produce a range of products. We think that a
number of them are diversifying.
So, I think in East Africa, Tanzania is really beginning to
be quite competitive in a number of areas but still needs a lot
of help. The MCC compact will help them with that.
In West Africa, we have reports that Senegal is also doing
fairly well in terms of advancing its trade. There are quite a
few of them. Lisutu is the largest exporter of apparel to the
United States. So, you would not think that from a very tiny
country, small as it is.
Mr. Radanovich. All right, thank you very much. Ms. Zak,
welcome to the committee. Ms. Zak, you had mentioned in your
testimony, the importance of developing private sector
relations between U.S. and Africa. Could you discuss further
the importance of expanding and developing the African private
sector and how this could benefit both Africa and the United
States in the future?
Ms. Zak. Thank you very much, and thank you very much for
the question because I think it is very important to do both.
One of the things we focus on is developing the local economy,
and I think to do that, you need to develop the private sector
as well to develop the local economy.
So, for example, one of the examples that I gave was the
Roeslein example, the can manufacturing. That, as a result,
will create jobs in country and, at the same time, created jobs
in the United States. So, we try to work with the public
sector, but also with the private sector in developing the
private sector as part of our program and see that as an
important part of economic development.
Mr. Radanovich. Tell me in your role in promoting trade
with Africa, what barriers have you encountered that you think
most need to be removed?
Ms. Zak. Well, I think, for us, one of the things that we
hear from U.S. companies is one of the problems is that there
are other countries that are providing assistance in a non-
competitive way. And as a result, they need assistance from the
U.S. to be able to compete with other countries. And I think
that, for them, is one of the biggest barriers is facing others
to provide assistance in a way that is not competitive.
Mr. Radanovich. All right, thank you, and I yield back.
Mr. Rush. The chair now recognizes the chairman of the
African subcommittee, Mr. Payne, for 5 minutes.
Mr. Payne. Thank you very much. Let me ask under the AGOA,
until now the major benefits in increased exports under AGOA
have been limited to several countries, to South Africa, maybe
Lesoto, Kenya, Madagascar, Swaziland mainly in assembling
clothes. How can we broaden the scope of AGOA, first of all in
your opinion? Secondly, is it wise to expand market access
under AGOA for non-apparel textiles, certain agricultural
commodities, as you briefly touched on, in order to enable more
countries to utilize AGOA?
I feel it is certainly underutilized, and maybe, each one
of you might be able to comment on how you think it can be
increased and improved.
Ms. Liser. Thank you, Chairman Payne, and for your
longstanding support of AGOA and interest in seeing how we can
maximize its benefits. We actually have seen an expansion of
the number of countries that are exporting under AGOA as well
as the products that they are sending. I know that it is a
range of products that you don't normally associate with
Africa: footwear, eyewear. I have been to an eyeglass factory,
footwear factory. Processed agricultural products, fruits and
jams and jellies are being produced. Peri-peri sauce or hot
sauces as they call it.
So we are actually seeing that and we do have more U.S.
businesses that see the products coming from Africa as quite
competitive in the U.S. market, especially in niches. So
apparel and textiles are still 22 percent of the non-oil, but
that figure actually used to be much higher. Just a few years
ago, it was 40 percent of non-oil.
So, to us, as we see the number go up in terms of AGOA non-
oil exports to the U.S. and the percentage of apparel go down,
we know that that is a reflection of the diversity that is
occurring. In terms of ways to expand and improve AGOA, on the
one hand, people could say it is the market access, that we
should add more products. But, I think as we look at it, we
know that about 98 percent of the products they send us are
already eligible to come into the U.S. duty free.
The truth is that on the capacity side, they are really
lacking, and if we really want to help Africa take advantage of
AGOA, we have to do something to help them with their
productive side.
I will just use one example. We had determined that in
Ghana, there was a company, a small company, that was producing
absolutely beautiful baskets, but they were producing about 500
or so of those baskets per year. They got an order--I probably
shouldn't say what buyer, but a large buyer here in the U.S.
ordered about 5,000 baskets as a test order and would have
ordered many more thousands of baskets from them. Just being
able to ramp up from 500 baskets a year to 5,000 baskets a year
almost put the company under. They had to put people on the
ground from the buying company there to help them and when the
containers left with the trial shipment, pretty much everybody
on the other side said that is it for us.
So, part of the issue is their productive capacity, and we
really have to find good ways to help them. I think we are
doing some of the things that need to be done, but nowhere near
what needs to be done to really help them take advantage of
that access that they already have.
So, you know, that is part of our main problem with AGOA.
Mr. Payne. Well, since I have been told by Mr. Rush's
assistant that I have only one more minute, I will just ask one
real quick question. I turned it upside down though, but just
this one other question. In 2000, as you know and we had
discussed, AGOA was created to promote economic development in
Africa by enabling African countries could not certainly
compete before in a global trade arena with other least
developed countries, LDCs, to gain unprecedented access to U.S.
markets through tariff-free quotas for certain products. And as
we know, AGOA has and continues to create hundreds of thousands
of jobs, promote community prosperity and economic growth
annually on the continent.
As we have also mentioned though that AGOA has only
scratched the surface. We need capacity building. We need a
number of things we don't have time to get into, infrastructure
and all that. However, this is the question, as you know, that
the General Systems of Preferences, the GSP, expires at the end
of this year.
Some in Congress are discussing harmonizing and expanding
preference programs across LDCs. For example, Bangladesh faces
significant developmental challenges, but it has a competitive
textile and apparel industry exporting five times the amount of
textiles that all of AGOA countries export collectively to the
United States.
This is without the preferences. Now we have a movement to
have preferences, but Bangladesh is doing five times more than
all of Africa put together. And I wonder, you know, how much
would an all LDC-preference program erode the AGOA program,
which has not actually been able to move to where it ought to
be? And I would just ask maybe each one of you maybe if you
could just, in about 20 seconds according to my time, if you
could just touch on that.
Ms. Liser. I think that, first of all, the U.S. trade
representative, Ambassador Kirk, is in the process of looking
at our trade preference programs. And as you noted, GSP will be
ending. We have a couple of other programs that are ending.
AGOA, of course, goes through 2015, but we are looking at AGOA
as well in that larger context of what do we need to do and
where do we need to go with preference programs.
That review has not been completed yet, but I think that
for those of us who work on Africa and have been looking at
this for quite some time, what we are aware of again are the
capacity challenges on the African side and a sense that the
Africans face some particular challenges that perhaps other
countries do not.
So, we recognize that there are a number of countries in
many regions that are poor and do need help. At the same time,
all LDCs don't walk in the same shoes. So, as we go forward,
our expectation is that we will be looking at how we can help
those countries who need the help the most to benefit more from
the preference programs, not just AGOA but also GSP. There are
a lot of countries that are in GSP that haven't been able to
take advantage of it either. But we hope that it can be crafted
in such a way that we are mindful of the areas that are still
in their infancy or infant industries for the Africans and
where perhaps there might be ways to shape programs, that they
might still be able to have an advantage in those areas, a
competitive advantage and a market in those areas.
Mr. Payne. Yes, anyone else? Yes?
Ms. Zak. I must defer to Ms. Liser, but I also want to add
that it is very important to be able to provide the
infrastructure for trade. And with respect to AGOA or any other
trade, it is important that the infrastructure does exist to be
able to have trade take place.
Ms. Vineyard. I agree with absolutely everything my two
colleagues have just said. If I could just add in one
additional point for further context is that we have ongoing
discussions in the Doha development agenda to talk about these
very issues, and so, we will continue to encourage our African
counterparts and interlocutors to fully engage in that as we go
forward.
Mr. Payne. Thank you very much. Mr. Chairman.
Mr. Rush. The chair now recognizes the ranking member of
the Subcommittee on Africa, Mr. Smith, for 5 minutes for the
purposes of questioning.
Mr. Smith. Thank you very much, Mr. Chairman. Let me thank
our distinguished witnesses for your insights and counsel. Your
testimonies are outstanding. Just since we are pressed for
time, I would like to ask a few questions and then yield, and
you can answer each of them or whatever ones you would like.
Back in 2000, I was the prime sponsor of the Trafficking
Victims Protection Act. It took 2 years to get the legislation
passed and emphasizes the three Ps in combating human
trafficking, be it labor or sex trafficking: prosecution,
protection, and prevention.
Last week, the Secretary of State released, and our
legislation prescribed, that this TIP report would be produced
every year. And with a great deal of fanfare, Secretary of
State Hillary Clinton had a State Department event, and it was
very well attended by NGOs and by some government officials.
And my question would be since 19 countries of Africa are
on the tier two watch list, meaning they have egregious
problems with trafficking, but they are taking some actions to
mitigate those. But they are still on the watch list. They
could go either way. Seven countries in Africa are actually on
the tier three list, which means they are not taking even
minimum efforts to stop their own trafficking. There is
government complicity with the traffickers and maybe even
government people on the payroll, especially at the police
level.
To me, that does grave damage to the economic climate, and
my question would be how do each of you in your work integrate
the excellent work the state is doing on combating trafficking?
Again, the victims are exploited in slavery for those who are
being exploited, but it also is ruinous, I would think of, the
climate. I know it is. And as one of you pointed out, Ms.
Vineyard, you know, corruption. We know that. I have held
hearings myself when I was chair of our Human Rights Committee
and then the Africa Committee on what corruption really does to
a country, not just for those who would invest, but obviously
in countries. So, how do you integrate the work here country by
country?
Secondly, on the issue of the Millennium Challenge
Corporation, the MCC, you know, Mawli got $460 million, Ghana
$547 million. To me, that is the model of trying to integrate
all of the indicators, all of the prerequisites to getting that
money, once one signs a compact, so that there is
accountability and hopefully a lot of good positive outcomes.
Are we doing enough? Are we funding the Millennium Challenge
sufficiently enough? I think we are not. I think we could do
much more to boost up the good work that they do.
Thirdly, on competition with the PRC, Mr. Payne has held
hearings. I have held hearings when I was chair of the Africa
Committee of the growing and, I think, very negative influence
of the PRC, especially as it relates to dictatorship, like in
Sudan, but also in Zimbabwe. Although we have hope now with the
new prime minister there.
But they come in--they being the Chinese--with no human
rights strings attached whatsoever, all out of self-interest as
we saw. I was in DR Congo last year in Goma, but I also paid a
visit to the capital while there and heard several of the
lawmakers there complaining bitterly about the agreement that
had been made about building a large road, and the Chinese
government gets all the commodities, the precious minerals on
both sides of the roadway, and I suspect that roadway has a lot
of zigs and zags in order to fleece the DR Congo of their
goods. Now, so your thoughts on Chinese influence.
And finally, you know, we have always thought that the NGOs
are king, and NGOs do a marvelous job everywhere. But even
today, and I have long thought of this. President Michelle
Bachile from Chile made a very good point that when we
overemphasize the NGOs, we do so unwittingly at the expense of
government capabilities and capacities. Yes, corruption is a
problem in Nigeria. We have all been there. I have been there
many times. We know corruption is a problem, but there is a
risk, and maybe a positive risk, of saying, but we want to
still build up the government capability to do business and
everything else that they need to do, NGOs notwithstanding. And
your thoughts on that.
Mr. Rush. Before the witnesses answer the question, Mr.
Smith, I have to remind you we have a couple more members who
want to ask questions, and they should be given the right. You
have asked about five or six questions, four, all right. So,
would you restrict your questions to two so we can get to the
other members because they have been waiting here for sometime
please?
Mr. Smith. Well, I have asked them, so they can pick and
choose whatever they would like to answer.
Ms. Liser. If I could just say, maybe we should defer on
the MCC question because I think that, without a colleague of
ours from the MCC here, that might be a good one to get an
answer to at a later point.
You have asked a number of good questions. We could
probably go on and on about them. On the trafficking one, I
think that you know that the AGOA eligibility criteria don't
refer specifically to trafficking but do refer to child labor
and protection of worker rights. And in the annual review for
AGOA eligibility that we have, we start it every September, end
it usually by December, we look very carefully at this. State
Department is always at the table, is one of our closest
partners in looking at a number of these labor-related issues.
And we do indeed look at a number of reports they have. That is
not the only one. So, the answer to the question is that we do
integrate what State is doing in these very important areas,
and we do take very seriously the criteria has set for AGOA
eligibility.
In terms of NGOs and government capability, I think the
only thing that I would respond just sort of from the
experience we have had is that we need civil society. We also
need governments to have strengthened capacity, and we need the
private sector to also work together.
And so, we have found that in the countries that are doing
the best in terms of economic reforms, opening their markets,
as well as government reform, that what you often find is that
there is a good dialogue going on between all three of those:
the government, civil society, and private sector. So we would
like to see more of that happen and in more countries.
Finally, on the point of competition with the PRC, on the
one hand, we have, I think, expressed concern about some of
these relationships and the way that they are evolving,
particularly with countries like Sudan and Zimbabwe where there
has been a lot of international concern about those regimes and
what they are doing there. So, where PRC is actually going off
and establishing those kinds of relationships with rogue
governments, we have expressed concern.
On the other hand, traveling to Africa frequently, we also
see projects that the Chinese are undertaking which, with the
cooperation of the Africans, seem to be going well. And I will
just tell you one of them.
When I first went to Liberia a number of years ago, the
trip for the airport into Monrovia took an hour-and-a-half over
roads that I--it was just horrible. The next time I went, we
had a section of road that went very, very smoothly, and then
we went back into the potholes and so forth. The last time I
went, it was totally smooth. That is a road that with PRC
involvement has benefited Liberia.
So, I guess our view would be that the Africans have to, at
the highest levels, whether it is head of state, determine what
they can do with the PRC that benefits their countries and
their people. And then what we need to do here in the U.S. is
to do the same. We need to be looking at what are the best ways
that we can work with them.
And frankly I think that through the MCC and through the
efforts of a number of government agencies, we are finding the
best ways for us to also work with them. But again on the
negative side, we have definitely weighed in on that, and we
believe that the Chinese will be fairly isolated in that
particular approach to African governments that are not doing
the right things.
Ms. Zak. I was going to say in the interest of time, I will
just say that was very well said. And I do want to add, with
respect to the PRC, the fact that we do need to support the
U.S. government agencies that are helping U.S. businesses with
respect to the competition that is provided by the PRC. And
that is what the U.S. Trade and Development Agency does, Ex-Im
Bank, other members here. So the one thing we can do is support
those agencies.
Ms. Vineyard. Thank you. I don't disagree with my
colleagues. On the issue of competition with China, I would
like to add an extra point in that one of the issues that we
have with the Chinese are the increased counterfeit goods that
are coming into Africa. And that has been one of the emphases
of our programs in looking at intellectual property rights is
in training the customs officials on how to identify
counterfeit goods that come across borders, in working with
judiciaries on enforcement, and prosecution type issues. So
when I talk about intellectual property rights, that is
definitely something that is on our minds with respect to the
Chinese influence.
With your question regarding corruption, we counsel
companies. We find out about some issues from companies
directly. Sometimes our advocacy centers when we are looking at
how companies are positioning themselves to bid on contracts,
some of those issues come up. We address these issues with host
government as appropriate.
And finally, we also work with foreign governments outside
of Africa, maybe the signatories of the OECD Anti-Bribery
Convention, to address the supply side of those issues as well.
Mr. Rush. The chair now recognizes Ms. Woolsey for 5
minutes.
Ms. Woolsey. Thank you, Mr. Chairman. My concern is more
like on the human cost of trade. So I would be concerned about
your opinions and your responses to when the United States goes
into a developing country and markets to that country, how do
we ensure that we are not disrupting local markets and
economies? I am particularly concerned about the farmers and
the small craft persons, and I am also concerned that we invest
in microfinance, you know, in developing nations and in
communities. And we are trying to help them bolster their
economies, so how are we supporting that and making sure we are
not competing with those that are on the ground trying to do
the work themselves?
For example, in Tanzania, 100 percent of the mosquito nets
are actually made there. So how are we supporting this kind of
growth?
Ms. Zak. Well, I will respond to part of that. With respect
to how do we choose these markets and what do we do, I asked
that question to my staff. And their response was we listen. We
listen to what the host country needs. We listen to what they
want. We listen about the fact that they want to develop their
economies and they want to be self-sustaining.
So, from the U.S. Trade and Development Agency's point of
view, we listen to what the needs are of the host country, and
that is how we ensure that they are protected.
Ms. Woolsey. And, Ms. Zak, who are you listening to? The
people on the street or their government?
Ms. Zak. We are actually listening to many people. One
would be listening to government officials, but we also work
with the private sector so listening to the private sector in
country, listening to people on the street, also listening to
the experts in U.S. government. We work closely with the
Department of Commerce, the Department of State as well.
So, we gather as much information as possible in this
process, but it isn't just listening to host-country
governments. It is also listening to the people in the country,
as well as the experts who have that information.
Ms. Woolsey. Thank you.
Ms. Liser. Congresswoman Woolsey, I think that when you
were asking about, concerned about the human cost of trade, I
was thinking about the fact that this is debate that happens in
a lot of countries, including the U.S., which has to do with
both the cost and the benefits of trade and understanding how
economies as a whole really can benefit from trade and how you
can look at some of the sort of the, I guess, the pros and the
cons of what happens.
Now, in terms of Africa and the farmers that are there,
that was one of the points I had made earlier--it might have
been before you come--that many African countries are producers
of raw commodities, and that we are not seeing the kind of
processing of those products. So, it keeps them at sort of the
low end of the global trading--the low end of trade in terms of
global trade.
And so, one of the ways that we hope that we are working
with them to help them benefit more and to see more benefit
rather than cost from trade is to help them not be at the
lowest end of the value chain we call it.
So, for example, countries that produce cotton, we want to
also see them producing the thread, the yarn, the fabric, and
the apparel. They will be able to attract investment, create
jobs, and the backward chain helps the cotton farmer as well so
that they are not selling all of their cotton to countries like
China who then takes those same products, makes it into value-
added products that employ millions of people and then send
their apparel to the rest of the world with cotton in it. The
cotton farmers get very little of that, and the others who
process it get more.
So, again we think it is very important if Africans are
going to benefit more from trade that they have the opportunity
and the skills and the capacity to add value to and process
those products.
The last point I would make, you talk about small
craftsmen, and I would just say that many of the African
countries have very competitive producers of what we would call
handicrafts, and we are importing a lot of those handicrafts
now. There is a lot that is increasing, but as I said about the
gentleman with the baskets in Ghana, for you to be able to get
the big orders and to be able to hire more people in your
factory or maybe even have a second factory, you have to have
the capacity to meet those orders. And so, helping a basket
maker in Ghana, just as an example, going from 500 to 5,000 to
50,000 baskets, that is where we need to give them assistance.
Ms. Woolsey. Well, would it be possible in a developing
country, instead of insisting that they grow from 500 to 50,000
over time, that there is a different way to produce that same
number of baskets by spreading it out over the district? I mean
maybe they don't want to be producers of 500,000 baskets.
Ms. Liser. And I think that that is possible, but again,
producing small amounts of products and trying to sell those on
the global market in a competitive way, unfortunately, makes
them not as competitive as the people who can do the 5,000
baskets. And I don't know if you ever look, but you will often
see in some of our big box stores, Target and others, you know,
products that look like they are from Africa. But if you turn
them over, you will see that they are made in other places.
We want the Africans to be able to do that. Do we value
having those very small quantities of handicrafts that are
handmade and beautiful? We absolutely do. But if they are going
to be bigger players in the global trading system, somehow they
have to be able in certain circumstances to go from that 500 to
that 5,000.
Mr. Rush. The gentlelady's time is up.
Mr. Payne. Mr. Chairman, if the other two panelist members
would permit, if we could have the second panel, and they could
begin with the questioning because we don't know when the votes
will come again. If that is all right with everyone here, and
we will start with Ambassador Watson and Chairman Lee. And if
we could then go to the time. Would that----
Mr. Rush. So are you suggesting that we dismiss this panel?
Mr. Payne. Yes, so that we don't----
Mr. Rush. Well, OK. If it is all right with them. The chair
recognizes the gentlelady from California.
Ms. Lee. OK, I want to thank everyone for yielding, but we
have a big deal on the sense and disparity issue that I have to
run over to, but I just want to thank all of our panelist and
our chairmen for this opportunity. And welcome everyone.
And just very quickly wanted to ask you about the issue of
HIV and AIDS and medicines on the continent. As you know, the
continent faces a severe public health challenge. In some
cases, countries have secured, you know, licenses from brand-
name pharmaceutical manufacturers or issued compulsory license
to produce drugs at a cheaper cost. And in other cases,
countries have imported cheaper, generic versions of those
drugs.
So, I want to get an update just very briefly, and you can
send it in writing if you would like, with regard to the
enforcement of U.S. trade laws and patent rights and how they
are or are not prioritized at the expense of saving lives
because this has been a huge issue for many, many years now.
And we know that generic drugs cost a heck of a lot less, could
save a heck of a lot of lives, but many of our laws, our patent
laws, actually hurt rather than help the generic drug industry.
Ms. Liser. Congresswoman Lee, that is a very important
question, and I think we probably should send you a response. I
think you will be pleased to know that many of the African
countries do have access now to the ARVs and at prices that are
quite low. So that is happening for a variety of reasons, but
for the sake of time, I will just promise you that you will get
a good answer to this.
Ms. Lee. Thank you very much, and thank you again for
yielding.
Mr. Rush. The chair recognizes another gentlelady from
California, the third gentlelady from California, Ms. Watson,
for 5 minutes. You want to ask the second panel?
Ms. Watson. I will defer.
Mr. Rush. OK, thank you very much. Well, the chair wants to
really thank you all. You have been expert and very
informative. And we certainly appreciate you taking the time,
and again, we apologize for the delay. Thank you very much.
I am going to now, as we agreed upon, I am going to
relinquish this chair to Chairman Payne for the second panel,
and he will call the second panel.
Mr. Payne [presiding]. Thank you very much, Mr. Chairman.
Let me thank the first panel again, and as we mentioned to
members who came late, we apologize for the tardiness, and we
tried to explain to them what was going on here.
We really appreciate the patience of the panel and others
and the audience. Is Steve Hayes going to be here? We will
introduce the second panel. He just stepped out for a minute,
but Mr. Steve Hayes who is the President and a CEO of the
Corporate Counsel on Africa, and I know, who just recently
returned, I believe, from Zimbabwe. We have Dr. Lisa D. Cook,
Assistant Professor, James Madison College, Department of
Economics at Michigan State University. We have Mr. Greg
Lebedev. How is that? 50/50? Senior Advisor to the president,
U.S. Chamber of Commerce, Chairman of the Center for
International Private Enterprise. And finally Karen Tandy,
Senior Vice President, Public Affairs and Communications for
Motorola Incorporated. And we will begin with Steve Hayes, who
will be seated in a second. I knew Steve when he was a young
YMCA worker 30 years ago working around the world and Africa.
So, I knew he would be back in time, so he is one of our
proteges.
STATEMENTS OF STEPHEN HAYES, PRESIDENT AND CEO, THE CORPORATE
COUNSEL ON AFRICA; GREG LEBEDEV, SENIOR ADVISOR TO THE
PRESIDENT, U.S. CHAMBER OF COMMERCE, CHAIRMAN, CENTER FOR
INTERNATIONAL PRIVATE ENTERPRISE; LISA D. COOK, PH.D.,
ASSISTANT PROFESSOR, JAMES MADISON COLLEGE, DEPARTMENT OF
ECONOMICS, MICHIGAN STATE UNIVERSITY; AND KAREN TANDY, SENIOR
VICE PRESIDENT, PUBLIC AFFAIRS AND COMMUNICATIONS, MOTOROLA
INC.
STATEMENT OF STEPHEN HAYES
Mr. Hayes. Thank you, Mr. Chairman, and I hate to say it,
but it has been 40 years.
Mr. Payne. Wow, yes. I knew it. I was just trying to cheat.
Mr. Hayes. I will shorten my remarks as well as just note
for the record the reports are over there. My remarks will
focus on the need for far greater U.S. private investment in
Africa. And I think we need a far more coordinated approach to
Africa between the public and the private sector with an
emphasis on creating jobs in Africa and the United States as
well as increasing trade to the U.S. and Africa.
I think it is in our national interest, and I would say
highest national interest, to invest in Africa as a means to
ensure long-term relationships with the various countries and
peoples of Africa. There is no region in the world more
friendly to the United States than Africa, but in the long
term, nations will necessarily gravitate to those countries
with whom they are more deeply economically engaged.
For the sake of our own economy as well as the economies of
Africa, the United States private sector needs to be far more
engaged throughout the continent in investment and in the
overall development process at all levels. However, unless the
U.S. government provides vocal and active leadership and makes
this a national priority--there we go--makes this a national
priority, U.S. companies may be too slow in stepping forward.
We need to work together to make it easier for the U.S. private
sector to invest in Africa.
We can make a major difference in Africa by investing in
education, capacity building and training, and working with
African nations to engage U.S. infrastructure and agribusiness
interest, especially in the planning, development, and
investment processes. These investments not only strengthen
Africa but help the American economy.
What I think we have to realize is that Africa can help us
as much as we can help Africa. The investments we make in
education, for instance, could be beneficial for our own
training schools, including our universities and technical
schools. Working with Africa to develop greater and broader
educational capacity not only helps Africa, but can provide
jobs for American faculty and technicians as trainers in
Africa.
We have a highly trained service sector and professional
education sector that could be put to further use by working
with Africa to build capacity. Governments cannot do this
alone.
Also, institutions, and I dare tread here, but also
institutions such as ``Africom'' can assist African governments
in meeting their own security needs as Africa's own security
forces are developed and trained through well-targeted capacity
building and training programs. To do this, we must get the
U.S. private sector much more engaged in Africa.
The Corporate Counsel on Africa believes that a key to our
success will be the degree to which public and private sectors
work together in planning and implementation. I think for us to
be effective in Africa, as effective as possible, requires a
level of cooperation among the public and private sectors that
we have not seen since the Marshall Plan.
As our corporate members work together over three months
preparing our policy recommendations to the Obama
Administration, and I thank you for including it in the record,
it is of interest to me that throughout the report, sector by
sector, a major theme is not simply what government should do
as much as that the government and the private sector must work
together in planning as well as implementation to develop our
economic and political ties to Africa. We also strongly urge
the Administration to bring into the process at equal level
various players in Africa from the countries themselves to the
region or economic communities because African development is
becoming regional rather than simply a national challenge and
opportunity.
And this will be a major theme of our upcoming U.S.-Africa
business summit to be held in Washington the week of September
28. We expect that more than 1,500 business persons from Africa
and the U.S. to be here along with several hundred government
representatives from throughout Africa, including heads of
state and heads of government. And we hope all in this room
will be a part of this.
And, Mr. Chairman, I will also just digress very slightly
to say that your question on GSP, I would like to take that
also and say that if there is a blanket GSP, I think the
economies of Africa will be hurt very badly. I think we need to
have something unique for Africa. Thank you very much.
[The prepared statement of Mr. Hayes follows:]
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Mr. Payne. Thank you very much. Mr. Lebedev.
STATEMENT OF GREG LEBEDEV
Mr. Lebedev. Thank you, Mr. Chairman. The chamber very much
appreciates the opportunity to testify and applauds this
committee for its recognition of the importance of Africa as a
destination for American business.
To be sure, global business is a key to American prosperity
in Africa in our view is an unemphasized market opportunity,
and it has been for too long. American business and the people
of Africa can prosper together, but as commercial and trading
partners and as investors and as consumers, not just as donors
and the beneficiaries of foreign aid.
Africa needs sustainable prosperity, and this can only be
achieved by building and maintaining free market institutions,
which permit African and American businesses to flourish. The
U.S. chamber believes that the American business community
should be there to help.
Now, some American businesses have been in Africa for a
long time. You all know that, but too many others are hesitant.
And it is fair to ask the question why. We wanted an answer,
and the chamber wanted to learn what factors deter American
business from a greater engagement throughout Africa, and so we
teamed with Bairds Communication, which is a leading public
relations firm in South Africa to conduct a set of interviews
with U.S. business executives, who work in Africa every day.
The interviews took place over the course of 2008, so the
data is pretty fresh. And we talked to about 30 executives,
most of whom came from Fortune 100 companies. They represented
a cross section of industries, and the interviews were given in
confidence so that we could receive very frank and honest
answers.
The aggregated results of the survey were put in the
record. The survey findings, however, are highly significant
for three reasons. First, the survey quite correctly highlights
Africa's well-known structural weaknesses: inadequate
infrastructure, unskilled labor, inconsistent rule of law, and
political uncertainty.
These are not trivial conditions, and they need to be
addressed. But, second and possibly as importantly, the survey
does not suggest that these conditions are universal to Africa.
Nothing is uniform in a continent with 14 percent of the
world's population. These are very serious concerns, but they
do not afflict all African countries in the same way.
So, the good news is that real business opportunities
exist, but they must be identified. And the conditions on the
ground must be navigated. This is a significant finding for
both Africans and American business.
The third finding, however, may be more vexing because it
is intangible. The surveyed executives reminded us that the
characterization of Africa, the way the continent is regularly
described in the mainstream media is grim. It is portrayed as
if it is one place, not 50 different countries, one place which
is in a continual state of violent unrest. This is an
understandably intimidating image, which is rooted in some
truth but tragically misrepresents the positive conditions and
opportunities that widely exist throughout the continent.
So, what is to be done, Mr. Chairman? In our view, there is
work that needs to be done on both sides of the Atlantic. Too
many African governments have struggled with a disconnect
between words and deeds. They say they want more U.S. business,
and they do. But too many have been unwilling to do those hard
things to create a welcoming environment for U.S. capital,
goods, and services.
African governments must appreciate that they are competing
with other developing countries and emerging markets for trade
and investment, which means that they must market themselves
aggressively and undertake those domestic reforms in education,
health, infrastructure, and governance, which will attract
foreign investors. It is the same economic development that
U.S. cities and states play every day.
For our part, the U.S. chamber is taking a number of steps
to facilitate greater U.S.-Africa business relations. For
openers, we are about to launch a second part to this same
survey, and this will involve the African governments
themselves. We are planning a series of interviews with African
government officials, showing them the survey findings and
asking how they plan to do the things necessary to attract U.S.
business. And we will publish the results of that survey as
well.
Next, the chamber's affiliated organization, SIPE, that
which I chair, regularly works in Africa and around the world
to help reform struggling economies by supporting free market
institutions. We build business associations. We promote public
and private governance, and we teach business advocacy. I just
got back from Kenya, where SIPE hosted a four-country
conference, which talked about and focused upon the value of
public/private dialogue, which means to us that government and
business need to talk to each other every day.
The chamber can also draw on its strengths and experience
of American business on the ground through our network of
AMCHAMs, the American Chambers of Commerce. We have over 100
around the world, sadly only a handful in Africa.
Finally, the chamber's new African department will advocate
for African-related issues, such as the next round of AGOA.
That was talked about in the first panel. We will also host
visiting African dignitaries, as we did recently, for the much
beleaguered Prime Minister Shangara in Zimbabwe. And probably,
most importantly, we will help American business see through
the haze of Africa's bad press and navigate a way to the
tremendous opportunities that exist in the world's last
untapped markets.
Mr. Chairman, let me say again that we appreciate this
forum, which permits a conversation that is very important to
both Africa and the United States. The real lesson for the
continent of Africa and for us is that we need each other. The
American business community needs markets to sell goods and
services, locations to manufacture, enterprises in which to
invest, and partners with whom to trade. And we do far too
little of that with our counterparts in Africa.
In turn, Africa needs American business, not just for an
occasional investment, but because we bring employment,
expertise, model business practices, skills training, community
development, and an ambitious and honorable approach to free
enterprise. And we have a cultural connection to the continent
that no other country can claim.
Mr. Chairman, Africa is a market which offers tremendous
potential, and the U.S. Chamber looks forward to working with
this committee to help overturn the misimpressions and
stereotypes and create a new era of reciprocal commercial
engagement between the United States and our many friends
throughout Africa.
[The prepared statement of Mr. Lebedev follows:]
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Mr. Payne. The chair thanks the gentleman. The chair now
recognizes Dr. Cook for 5 minutes. Dr. Lisa D. Cook. I am
sorry, Dr. Cook. She is Assistant Professor of the James
Madison College of the Department of Economics at Michigan
State University. Dr. Cook, you are recognized for 5 minutes.
STATEMENT OF LISA D. COOK
Ms. Cook. Thank you, Mr. Chairman and members of the
subcommittees. Thank you very much for this opportunity to
testify on the important topic of U.S.-Africa trade relations.
Just as international trade has been an engine of growth for
the U.S., it has been for Africa recently. Between 2000 and
2007, a three-fold increase in global trade with Africa has
been associated with average annual growth of 5 percent in
African economies. My research shows and analyzes this reversal
of decades of economic decline in Africa.
My main point today is that increased trade in Africa has
resulted in and can result in better economic outcomes for the
U.S. and for Africa. Coca-Cola, UPS, Pampers, Jeep vehicles,
and Intel Technology can be found throughout African. Ethiopian
and Kenyan coffee, Egyptian cotton towels, and South African
wine are no longer exotic and are ubiquitous in the United
States.
What we know is that the U.S. and Africa are better
positioned to mutually benefit from trade than at any other
time in recent history. Reforms undertaken by many African
countries in the late 1980s and 1990s contributed to high
growth rates and Africa becoming more integrated into the world
economy. AGOA has also opened up trade with Africa. Partly as a
result of U.S. and African policies between 1999 and 2008,
exports to Africa nearly tripled, and imports from Africa
increased six-fold.
Trade with the U.S. has been interrupted by the financial
and economic crisis. Exports to Africa shrank by 11 percent
between the first quarter of 2008 and the first quarter of
2009, while imports from Africa fell 57 percent over the same
period. The downward spiral can be swift and deep. Declines in
demand and in commodity prices lead to lower incomes and
government revenue, which in turn lead to lower spending on
health, education, and poverty reduction.
Further due to the financial crisis, trade finance in
Africa has contracted sharply or has become prohibitively
expensive. Despite the economic downturn, U.S. exports to
Africa rose in several categories, including footwear,
electronics, and transportation equipment. And these exports
have been steadily increasing in recent years.
U.S. export activity has generated positive spillovers for
African firms. For example, American Plastics Technologies, a
small equipment manufacturer in Illinois, has partnered with
Alpha Fluids in Lagos, Nigeria, which will produce IV fluids,
medical beverages, medical drips, and bottled water for Nigeria
and ultimately for West Africa. Direct opportunities for
employment, that is 40 new jobs at American Plastics, and
indirect opportunities for suppliers--that is 16 firms in the
U.S.--have been created on both sides of the Atlantic.
Nonetheless, trade with Africa is not perfect. On average, it
costs almost double the amount to ship a container from Africa
as it does from an OECD country. It takes five to six days to
process exports and imports in the U.S.
For Chad, exports take 78 days to process, and imports take
102 days on average. Infrastructure, governance, and the
general business climate continually hinder Africa's potential
for international trade. Problems with AGOA implementation and
well known, such as limited composition of exports, which are
largely concentrated in energy and textiles.
A host of policies, practices, and institutions related to
trade must be addressed in order to maximize the gains from
U.S.-Africa trade. The extent to which these gains may be
realized will depend on many factors, including the avoidance
of protectionist measures on both sides of the Atlantic.
Finally, trade and aid are not mutually exclusive. U.S. aid
agencies have been critical in connecting American firms to
partners in Africa. Ex-Im Bank guaranteed the loan of $16
million to support the American Plastics Partnership mentioned
earlier. Nora Bannerman exports thousands of shirts from Ghana
to Ross Stores, one of our largest discount clothing stores,
with the help of USAIDS West Africa trade hub.
Given increasing claims on the resources of developed
countries in the short run and considerations of sustainability
of development in the long run, increasing trade between the
U.S. and Africa may produce significant spillovers for Africa's
development for many years to come.
To conclude, U.S.-Africa trade has increased markedly in
recent years. This has created growth opportunities in both
places. Trade with Africa has also created significant
opportunities in other places too, such as China and India.
Given this recent experience of dramatic growth in Africa, now
is an especially important time to augment our relationship
with Africa. Thank you for your indulgence and your work on
this important issue.
[The prepared statement of Dr. Cook follows:]
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Mr. Payne. Ms. Tandy.
STATEMENT OF KAREN TANDY
Ms. Tandy. Good afternoon, Chairman Rush, Chairman Payne,
Ranking Members Radanovich and Smith. Thank you so very much,
along with the other distinguished members of the subcommittee,
for inviting Motorola to testify today. By way of background,
Motorola operates in more than 100 countries around the globe.
Fifteen countries in Africa are included among those.
We opened our first office on the continent of Africa 40
years ago in Nigeria and benefited from hiring locally,
utilizing the creativity of diverse cultures and individuals.
We have learned that localization is the only sustainable
growth-oriented business plan for Motorola in Africa. The U.S.
private sector understands that to grow our business in Africa,
we must be full partners outside of our narrow business
interests. Being good corporate citizens means helping
communities solve problems, whether those problems involve
technology, infrastructure, health, and educational needs, or
issues related to public safety.
Providing the proper tools and technology solutions for
governments to communicate effectively and securely creates and
fosters a stronger environment for community and business
development. A country's economic and social successes are
inextricably linked as these committees well know.
Unfortunately, talent and capital sometimes depart the areas
where they are needed most because of the lack of personal
safety of poor health and education services.
And our experience in Africa has taught us that this is one
of the key problems on the continent. But Motorola has the
technology to link different sectors of a community and regions
together to help address some of their most critical public
safety concerns and support a more stable business climate,
whether it is supplying radios for UN mission in the Sudan or
investing in the future of Africa by connecting privileged
schools with disadvantaged schools through our canopy wireless
broadband technology.
Today, Motorola has offices in Nigeria, South Africa,
Egypt, and Morocco, with an operational presence in a number of
other countries from Algeria to Rwanda. Our wireless technology
and solutions and services are used by most police and public
safety forces throughout all of the African countries as well
as the African and foreign peacekeeping forces participating in
missions throughout the continent.
In the private sector, Motorola supplies secure
communications networks and equipments to oil companies, mining
operations, and agricultural projects to enable pipeline and
other field operation security and communications, all of which
contribute to the economic development of Africa.
Motorola has been working with mobile telephone networks,
which is one of the widest operations of mobile communications
throughout Africa. We are also working with our carrier
partners in Uganda, Ghana, and Nigeria to improve the quality
of service for mobile phone subscribers. In Morocco, we are
working with one of the carriers, Wana, the telecommunications
arm of Morocco's biggest conglomerate, ONA, to pilot a WiMAX
network, which we launched this spring. And that has the
potential to deliver broadband service to a wider subscriber
base of citizens in a more cost effective manner.
In Nigeria, we have continued to expand the mobile phone
networks for M-tel, Zain, and regional providers over the past
few years to connect Nigerians countrywide.
Another valuable asset that Motorola contributes to Africa
is our time and our knowledge. Motorola is working with
government agencies to help revolutionize the delivery of
quality rural healthcare and education through delivery models
that can be replicated throughout Africa at relatively low
cost.
To address the shortage of doctors in South Africa,
Motorola, the Medical Research Counsel, the State Information
Technology Agency, and the Limpopo Health Department joined
forces in a wireless broadband network trial. In that trial, we
connected three hospitals and one clinic. Video cameras were
included that enabled the doctor to examine and diagnose a
patient more than 60 miles away. All the vital data, such as
heart rate and blood pressure information, were submitted to
the doctor for that diagnosis as well. And there are already
plans in progress to expand to other hospitals and clinics in
the Limpopo Province.
Similarly, through our work with the government and other
South African entities, Motorola has helped launch the Ulwazi
e-Learning partnership to improve local education by addressing
the issues of teacher shortages and lack of resources. This
project connected a privileged school together with four
disadvantaged schools so that one teach could reach 100
students at once. And to make that happen, Motorola funded the
computers, the web cams, the sound equipment, the white boards,
in addition to the entire wireless broadband network. We are
now attempting to replicate this in discussions with the
government in Rwanda.
Mr. Chairman, Motorola is proud of its leadership role in
investing and fostering the long-term relationships and
economic growth in Africa. And we look forward to working even
more closely with you and the U.S. government to help support
your efforts in bringing the United States and Africa closer
together both economically and socially. Thank you.
[The prepared statement Ms. Tandy follows:]
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Mr. Payne. Thank you very much, and let me thank the panel
for your excellent testimony. And we will open our questions
with Congresswoman Watson.
Ms. Watson. I want to thank the first panel and the second
panel as well, and I am reminded, and my colleague Lynn Woolsey
will remember, California used to have trade offices in South
Africa, and we opened one on the west coast of Africa. And, of
course, due to the budget, we no longer have them in a new
administration.
However, it is a burgeoning field for us to really look at,
as you are doing, Ms. Tandy, and the rest of you have reported
on. I would like to, number one, I think what really keeps
investors from the U.S. away is that they don't really
understand business in Africa, and there is not a whole lot of
advertising. So, in September during the Congressional Black
Caucus, we are holding our workshops on investing in Africa,
but we have to train investors first because they have to know
that it might take five years before your money can turn around
and have a benefit.
One of the things that we notice in South Africa, and there
is a kingdom called Bafulking, discovered a platinum strip, and
the queen mother says I am sending my young people west so that
they can learn how to mine that platinum and the money can go
directly to our villagers. And they can build the new shining
city on the hill. So, there are many different things going,
but I would like to--and this is directed to anyone on the
panel that would like to respond. How can we use commercial
investment in agribusiness to endure when climate change is a
reality? Some people want to say it is not, but--and you know
there are certain areas of the continent that have been under a
drought for 7 to 10 years.
But what actions can be taken now to mitigate the negative
effects of climate change by U.S. government and by businesses?
Anyone want to take that on? OK, Mr. Hayes.
Mr. Hayes. Sure. Thank you, Congresswoman. I have been to
Bafulking as well and met with the King. It is also as you
know, the highest--one of the highest incidents of HIV/AIDS in
the world as well. So it is just tremendous challenges there,
and I applaud that program.
Ms. Watson. Is that the Daimler Chrysler program?
Mr. Hayes. No, I actually lead the Daimler Chrysler
delegation program. I am talking about the Queens program and
the education. So thank you, yes, we were--the Corporate
Counsel on Africa was leading that.
Ms. Watson. Right.
Mr. Hayes. Thank you. The issue of agribusiness is an
area--and my concern is that I think the United States has a
critical challenge on Africa, partly because of China, partly
because of the economic partnership agreements, which I think
is another form of colonialism from Europe that are coming in.
And also, I think your point is--and one of the problems, I
think that would happen on interviewing CEOs is asking have you
ever been to Africa. Most CEOs have never been to Africa. They
are the ones that ultimately--they have their own kingdoms.
They make the decisions of where they go, and until we get more
corporate executives exposed to Africa----
Ms. Watson. I just have to tell you this. Let me interrupt
you for a minute. When I first came back and came to Congress,
I was number 45 out of 45 on foreign relations, and I would
hear our members talking about Africa and there is a program
here that is working real well; we are going to pick it up and
put it here. And I am saying do you really understand that
Africa is a continent----
Mr. Hayes. Right.
Ms. Watson (continuing). With 54 nations on it, 22,000
languages--22,000 tribes, 16,000 languages, and they are so
different. And so so many, too many people don't really
understand how villages work, how tribes work, how communities
work.
Mr. Hayes. That is exactly right and there are also a
number of countries who are doing things very well and still
not getting U.S. investment.
Ms. Watson. Yes.
Mr. Hayes. They meet the requirements at MCC. Botswana is
another great example where they are doing all the right things
and still not getting the investment. And so I think the
questions have to go deeper, more into U.S. attitudes and so
forth.
In terms of agribusiness, I think there are areas in which
to help our own economy, we have to look at what are the areas
of Africa, where the United States has a competitive advantage,
and how do we help those industries develop more? Agribusiness
is very key to that, as is infrastructure. We can compete with
anybody in the world on an equal playing ground. We also, I
think, can help the villages far more effectively than almost
any country in the world. And so I think that we have--where
the government and the private sector can work together in
addressing the issues. And as you noted my written statement,
climate change is, I think, critical. And we have to address
that. We have to plan that now and not be into another reaction
to a failing, but planning an impact how we can do that.
I think the agribusiness sector, I think our research
universities can face that, now can work with Africa, not
simply for but with Africa, and make a huge difference. But I
think the government has to also come out and say this is
important to us and talk to the American government and say to
the private sector, it is time you became more engaged, and we
are going to help you become more engaged. We are going to help
you become more engaged by having more access to financing.
There is hardly an American bank that is willing to finance an
American business to work in Africa. So we have to look at
those issues as well. I have gone on too long so I----
Ms. Watson. Thank you. If I can take another minute, Mr.
Chairman. I want to address this to you, Ms. Tandy, and your
company has done, as you described, a great deal of phenomenal
work in Africa. And when you expend broadband coverage, there
is a problem that jumps up, and the cost of Internet access is
rarely the determining factor in purchasing or using. So how
effective is an expensive broadband network throughout Morocco
when the majority of citizens do not have computers?
Ms. Tandy. Thank you for your question. It is a trial in
Morocco, but the importance that we found is that extending
broadband is really about connecting everyone. And the trial is
to bring mobile broadband, the ability to move data as you
move, and these--it is significant that this trial has come to
Africa. This is a growing and developing technology around the
world that has not found its footing everywhere yet. So I think
that this is a doorway for Africa, and certainly extending
broadband is part of moving an entire culture forward down the
road.
Ms. Watson. Would your company be willing to, say, donate
laptops to the village schools so every child in their primary
education can become familiar? Now, expense is a real problem.
The cost if it is a real problem, so do you have any programs
like that, where you would donate and help young people become
accustomed to using this modern technology as they are in Iran?
Ms. Tandy. Thank you for your question. We actually are, as
I mentioned, supporting schools in South Africa, and that is
not the full extent of our support to building that kind of
capacity. We have, through our foundation, provided a great
deal of product-in-kind support as well as funding, which I can
detail for you later. But it includes a school for
entrepreneurship and supporting also the South African Women's
Entrepreneurship Network with grant money to them as well as
the Pathways Education Center in the eastern cape of South
Africa. Whether that includes laptops specifically in those
instances, I would have to get back to you on that.
We have actually contributed a great deal of product and
in-kind and cash contributions, whether it was for laptops, the
ability to move data by phones, by cellular phones off of the
cellular wireless infrastructure, as well as phones for health,
which we contributed millions of dollars to as well as--excuse
me, I was--we have contributed a great deal of product and
support for that. And we have contributed millions of dollars
to Product Red, and over almost $28, $29 million to Product
Red. So, how much of all of that gets converted into laptops
for youth, I will determine and get back to you.
Ms. Watson. Well, I just want to say, I am sure the world
is watching and wants to comment on the way that technology is
being used in Iran to alert the rest of the world as to what is
going on. And I think the more, as you say, hookup throughout
this globe, what is happening in countries, the more
knowledgeable we can become and the more we can have impact in
a positive way in these developing nations.
And I just want to end with you, Dr. Cook. We have had
hearings in our Oversight Committee and, also, in our Foreign
Relations Committee, and we are looking at the way NGOs are
working, the way AGOA is being used, the Millennium Fund, and
so on. What can we do under this administration to improve on
what needs to be done in Africa to be able to motivate
Americans, and particularly African-Americans, to go back to
the source and to help these developing nations? I thought you
might just want to summarize what we can do.
Ms. Cook. Thank you for your question. I think one of the
first things that can be done--you will forgive me for being an
economist--and that is make sure we have data on what works. We
are just getting data from the Millennium Challenge
Corporation, and I think it is going to be critical that on the
face of it, it certainly seems like it is working; it is doing
good things. How well it is working, what incentives countries
are responding to is going to be critical to know. So that is
the first thing.
The second thing in terms of getting people interested, I
will report from my own courses that I teach on Africa, on the
economics of Sub-Saharan Africa. I don't think we need to do
much to get people interested. There are so many people signing
up for my courses it is astounding, and my colleagues don't
believe it. They think I am making numbers up.
So, I think what we have to do is to show more in terms of
the media, the heterogeneity of Africa, that it is not just one
country. Colleagues here have said that. It is not just one
country. Well, actually you have said it as well. That there
are places where there can be contributions made, and they can
make them in very different ways. They can make them as
volunteers through summer opportunities. They can do it through
study abroad. Michigan State has the largest study abroad
program of any public university. So, I think that these are
definitely ways that we can connect and try to get students to
give back, or young people in general to give back.
Ms. Watson. You know what I find is really at the core of
this is the follow through. We get loads of people who are
interested, and they come and they sit in the workshop. But
when it comes to investing your money in a continent that is so
far away and so unfamiliar to many people, that is where the
line is stopped. And thank you, Mr. Chairman, for the extra
time. That was just a comment. You don't need to answer it.
Mr. Payne. Thank you very much. Mr. Smith.
Mr. Smith. Thank you very much, Mr. Chairman. Thank you all
for your testimonies and your great analysis of so many issues
vis-`-vis Africa. Mr. Hayes, in reading over your book, which I
think really is a comprehensive attempt to try to really move
the ball forward, you point out on chapter seven on the health
care part, that the business of health in Africa predicts a
doubling of the African health care market by 2016, and you
talk about the importance of the private sector. You talk about
not-for-profit NGOs as well as commercial and for-profit. And I
am wondering--and I am sure this is part of the not-for-profit
part--but the faith-based health care initiatives that the
Catholic church, the Anglican church and so many others do. We
found and continue to find that Petfar has worked as well as it
has worked primarily--not primarily, but to a large extent
because of the faith-based health care infrastructure that is
preexisting and very easily could be built upon.
And it seems to me--and I have visited myself, and I know
Don has done this as well--many of the Petfar initiatives, I
remember one in Uganda where a church-based, in this case,
Catholic church-based and the ARVs and the prevention programs
and everything else, mother to child, through an army of
volunteers under the rubric of or under the canopy of a Lady
of--I am trying to remember the name of it, but it will come to
me. It was just amazing how they were able to mobilize so many
people.
And it seems to me the best bang for the buck and the
investment, you know, at least to some extent needs to be
focused on that. You might want to speak to that.
And you, also, on infrastructure, I think you make an
excellent point about unfocused and minimal U.S. government
resources promoting infrastructure development dampen and
inhibit U.S. private sector engagement in Africa. And then you
pointed out that the EU has done much more and others. And
maybe all of you might want to speak to that because I think
the Millennium Challenge has done some good, but it needs to do
much more. Needs more money to do it.
I will never forget one of my many trips, being told by
some farmers, and this was in DR Congo, that they could grow
anything. They just can't get it to market. And then we rode on
some of the roads that they wanted to take their products to
market, and it was like being on the moon. I mean the huge,
huge potholes were incredible. We are going around them and
through them.
So, if you could speak to that issue of infrastructure. As
you pointed out, it is the backbone of Africa's development.
The AU has found that. I do have a few other questions but
just----
Mr. Hayes. Sure, I couldn't agree with you more on the
faith-based institutions. I think they have made all the
difference in Petfar. They are important. They are vital in
terms of getting to villages, getting to the people. I think
they have been very important. Our own institution, as you may
recall, is the organization that drove Petfar through. I was
the president of that organization that created a separate non-
profit to drive that legislation through, and I am very proud
of the fact that it is working. I would agree with you it is
working very well. I think again it is a great example of what
has been done.
I think--and you also gave me too much credit. It is not my
book. Actually, my organization certainly, but over 100
companies worked together on this over 3 months really trying
to--took it very seriously. It was the health-related
companies, particularly, saying that look, there is a great
field to not simply address the illnesses, but there is a great
market to build a health-based system throughout Africa, the
hospitals, so they are much more able to care for their system.
And it is simply not responding to health crises but in fact,
there is an opportunity for U.S. businesses to help build
health institutions so that they are healthier in the long
term.
On infrastructure, that is, I think, the greatest need in
Africa. I think all of us recognize that. It is also an area
where, in agreeing with Dr. Cook, I don't think there is a lot
that we need to do. There is just some spatial things that we
need to do that would open it more for the U.S. infrastructure
industry to make a difference in Africa.
The Ambassador for Equatorial Guinea came to me, and I was
talking about why are we doing China. She said well, China can
do it at one-eighth the cost of the American companies. And I
said yes, but do you want to repair the roads eight times more
for that cost.
I think that with concerted public/private cooperation and,
particularly, we can get jobs for Americans as well as create
infrastructure in Africa which creates jobs for Africans. So I
think there is a real role for cooperation and public/private
partnerships. Did that take your questions?
Mr. Smith. No, thank you. Appreciate that. And let me just
ask you a couple other very brief questions. On microcredit
lending and microfinancing, what role do you all think that
plays? You know, we spent a little over $200 million, but
obviously it is helping the poorest of the poor in many cases.
But it seems to me at some point, that begins to build an
infrastructure and an entrepreneurial spirit among some that
could be translated into a bigger and better Africa in terms of
its economic growth.
And on trafficking, I asked this of the first panel. And
another issue related to human rights would be labor rights. We
know that China has an awful record when it comes to--they
don't have any independent labor unions. There are a lot of
wildcat strikes now going on in China because--and they are
even focused against U.S. corporations because they want what
Lech Walesa and what the United States and many other countries
almost--he promoted what we kind of take for granted. That is
fundamental rights of a labor union, collective bargaining, and
OSHA type regulations.
As Africa builds up, what role do you see labor unions
playing in Africa's development so that the worker, the men and
women on the ground, who do the hard work, get their fair share
of benefits?
And again, on trafficking, you know, it seems to me we all
have to be very, very aggressive in integrating trafficking
concepts, minimum standards as we prescribe in the TIP report
and our law. You might want to speak to that as well because I
think very easily a workforce can be exploited, while the CEOs
and others may look askance.
Ms. Cook. Thank you for these questions. I will start with
your question about trafficking. I think you have hit on
something extremely important, and I think that the way to end
trafficking or at least minimize it is to provide opportunities
for those who get trafficked. So, if you are providing
opportunities for young women, who would otherwise be working
in, say, footwear factories, who have more independence because
they have jobs, I think this is the way to approach it. And I
think this is the only way that is going to minimize the
incentive to round up the vulnerable and put them through this
pipeline that is global.
On the second issue on microcredit, I think you touch on
something very important, again, and this is something that is
the focus of my research. I think microcredit can be
transformative, and I have worked on it in Nigeria and in other
places. And once again, it provides some of the most vulnerable
people with independence of some sort. So, there is an
incentive for them to invest in the economy and think outside
the box or think inside the box, just so they have the tools to
be able to do them.
And I think that microcredit actually is not just sort of
the NGO that we are often talking about, the Gramean model that
we are more familiar with. Most of the banks in most of these
countries are microcredit, and anything we can do to support
them, I think would be useful. Support them in terms of
supervision and consultations, but otherwise I think it can be
transformative for the very reason that you have suggested.
Mr. Lebedev. I think it is useful to add, and it also
touches on some of the things that Congresswoman Watson talked
about earlier. Whether it is microfinance activity, which can
be transformative, whether it is American or other business,
that changes the nature of the communities in which they work,
there are a variety of developmental and commercial activities
that have for years affected and touched parts and pieces of
these countries.
The dilemma is nothing connects them very well. These
become too frequently success stories, but isolated success
stories. And I think this is not an observation of one or the
other. You got to do all that, but what we also have to do is
recognize that on any given day in any one of these countries,
the inattention or indifference of their government can wipe
out all of this progress.
And so, at one level, we have to continually affect
positively the communities in a variety of ways, work through
the faith-based organizations. But at the same time, use the
incentives of the MCC, which is designed to focus on those
governments, in effect, that are leaning in the right
direction, that are sending the right signals with respect to
the way they choose to govern and lead their countries. We
cannot lose sight of the fact that pressure on governments is
the one way that we can preserve the gains that we will make
selectively and in small ways throughout many of these
countries.
Mr. Hayes. There is one other part to that, too, and I
think Mr. Lebedev just hit on it too. Microfinance is very good
in a number of areas, but there is a gap in the need for
financing for everything between microfinancing and the giant
corporations. The people who need the financing to build the
businesses in the large urban areas, especially, there is very
little financing available from either the African banks and
certainly almost none from the U.S. banks. We have to find a
way--and in equity funds, we will take a fund of $10 million,
you know, often invest $10 million or more. But the investments
that we need to be making are the $25,000 to $50,000, $100,000
for small- or medium-sized businesses to make a difference.
That is lacking.
Mr. Smith. Can I just ask one final question?
Mr. Payne. We really----
Mr. Smith. Running out of time?
Mr. Payne. Yes, I gave you about 12 minutes on this last
one. So I better let Chairman Rush--but I think the points are
certainly well taken. I wish we did have time to really go
further in it, but Mr. Rush.
Mr. Rush. Thank you, Mr. Chairman. I think that both of
you, Mr. Hayes and Mr. Lebedev, your responses have been quite
pertinent and informative, especially as it relates to the
small- to medium-sized businesses. And in your answer to Mr.
Smith's question, you answered the first question that I had,
but I do have another question, and it is a general question.
And I would like to ask the four panelists just to respond.
And I want to focus on the diaspora. In the U.S., it has
been estimated that we got 1.4 million African immigrants
living in the United States, and the overwhelming majority of
them are educated, and they are entrepreneurial in a lot of
different ways. As a matter of fact, in some of our countries,
in my district in some of my communities, they are leading
entrepreneurs, owners of small retail businesses and
professional services in my district. They transfer, as has
been estimated, about $40 billion back to Africa to support
families.
Now, these are individuals who have a strong understanding
of the culture and economic environment of their home
countries. They understand American business, American know-
how, and they have been able to be successful businesses here
in this country.
How can we engage that element, that force, in a positive
way? I think we should call upon them and encourage them to get
involved and not just leave it up to the folks back home. Would
you all respond to that please? Ms. Tandy, you can comment also
on this. Start with----
Ms. Cook. I think this is a really interesting and almost
intractable problem it seems because, for instance in Nigeria,
I was advising the President Obasangu with Jeffrey Sacks
before, and one of the things that Obasangu was trying to do
was come up with a list of all professionals, all Nigerian
professionals living abroad. The first statistic that came
across my desk was that a quarter of the health service in
Great Britain was staffed by Nigerian doctors, and the question
is whether this is an underestimate rather than the true
number.
But they are definitely everywhere. High human capital
everywhere. The economists published an article in, I think it
was about 1996, saying that the most educated group--it is a
very, very small group. The most educated group coming to the
U.S. is from Africa, and that is a very small number of visas,
very small number of people coming. That is a talent pool that
can be tapped, and I think it can be tapped in several
different ways.
Congresswoman Watson was talking about the introduction to
Africa, and I think this is where they can be critical. I will
not take my friends to--I will take my friends to Africa in a
sequence. They have to get used to the environment before they
actually sort of fall in love with Africa as, I think, everyone
eventually does.
But I think this is where they are going to be critical,
critical in interpreting signals, critical in interpreting the
linkages that are able to be tapped, and also, we have to be
careful because just as you see in Iran, those people who have
been outside and educated and are trying to make their way back
inside, sometimes they are not welcomed and embraced as we
think they might be. So we have to be very careful about how we
are leveraging their services, their knowledge. But I think
there is something there to be tapped nonetheless.
Mr. Hayes. I would also say that I think right now the
diaspora is probably the leading investor in Africa, but it is
going by way of remittances and by the millions and overall
billions when you look over. So it is going back to families,
but the amount is enormous. Now, if you could transform that
into investment as opposed to sustenance of families.
I seem to be following Congressman Payne everywhere he goes
in Africa lately, and he was in Zimbabwe right before I was,
but the--as well as a few other countries. But when I went to
Zimbabwe, I was staggered by the fact that the bank, they said
look, the second largest investor right now in Zimbabwe
diaspora community, and I had no idea there was such a large
Zimbabwe and diaspora community. You know, I would assume it
came from South Africa. He said no, Britain and then followed
by the United States, there is more remittances back to
Zimbabwe through the expatriate community, the diaspora than
any other country.
So how do you translate that though into real investment?
If you could translate that into real investment, the amount of
money they are putting in is much more than some countries are
putting in. So that is the challenge. I don't have an easy
answer for you.
Mr. Lebedev. Well, Mr. Chairman, it is actually a very
interesting question that you raise because the diaspora, and
it is really multiple diasporas since there are many countries.
But they really are a great resource, and to Dr. Cook's point,
they bring in a cultural and emotional understanding to the
marketplace that in fact would be invaluable.
One of the things the chamber is doing right now is working
with folks who are part of the Liberian diaspora who are moving
back, and we have a project ongoing that is hoping to link them
with existing businesses. So in a manner of speaking, they
become a technical and cultural resource as foreigners try to
set up enterprises there using them as part of that process.
They have the potential to be invaluable. It also is an
opportunity for them because they can become stand-alone
enterprises in their own right as they are part of a process.
But I think it is a question that is worthy of far deeper
exploration that you raise.
Ms. Tandy. Thank you, Mr. Chairman. Motorola is actually
focused on trying to prevent the diaspora. We are focused on
the e-learning and bringing opportunities to rural Africa to
connect through distance learning and stay home and build and
invest in Africa and build Africa from within.
So I am in a poor position to address the possibilities of
the community, the larger community within the United States
and how to leverage that. We are very focused on investing
within the population within Africa.
Mr. Payne. Thank you. Let us see. Ms. Woolsey.
Ms. Woolsey. Thank you, Mr. Chairman. Mr. Lebedev, could
you do me a favor and expand on your meaning of when you
referred to Africa's bad press and then, a little bit later,
African stereotypes? I kind of thought I knew what you were
talking about, but then I thought well no, I don't know what
you are talking about. What does the U.S. Chamber of Commerce
mean by that?
Mr. Lebedev. What I mean by that is that too often the
whole continent, as many of us have said, the whole continent
tends to be misunderstood as one homogeneous entity when, in
fact, it is more than 50 countries with their own cultures and
experiences. The problem is there has been a history of
violence and disruption in a number of African countries as we
all know.
The unfortunate aspect is that the media tends to portray
that as just Africa, as if those bad experiences that happen
periodically and in fact are ongoing right now in certain
places, is a statement about the entire place, not a particular
incident or a particular country. And it is that
misrepresentation, that stereotype of a continent, if you will,
which we believe misrepresents the opportunities that are there
and badly, and does a tremendous disservice to those competent
African government officials, those superb African business
people who, in fact, deserve the opportunities that are
presented by foreign direct investment trade and other business
initiatives.
Ms. Woolsey. OK, thank you very much. Dr. Cook, when you
spoke of the product, the American product that is going to
Africa, I had this vision of landfills with all of our--like we
have in the United States of all of our throwaway products. Is
there any work going on so that Africa doesn't repeat all of
our same mistakes?
Ms. Cook. So I would share your concern, but I would have
to beg ignorance here. I don't know the specifics of the deal,
but I would have the same concern about plastic bottles or any
kind of packaging winding up in large landfills in Africa. But
I would agree that this would be an important component and one
that we should pay attention to when striking these deals.
Ms. Woolsey. OK, well do you--and, Ms. Tandy, you may want
to respond to this. Are we providing Africa with third- and
second-generation technology, or are we getting there with the
newest technologies, or is there an affordability piece of that
that we need to take into consideration?
Ms. Tandy. Motorola has been working very closely with our
carrier partners throughout Africa, and Africa is receiving the
current technology. And, as I mentioned, the future technology
has now entered Africa with the WiMAX trial that just launched
this past spring. So I think Africa is at the same level as the
rest of the continents. The rural segments of Africa and the
infrastructure that needs to be built out into connecting the
rural unconnected is certainly a challenge and a key focus for
the carriers as well as for Motorola.
Ms. Woolsey. Do you see any future for our clean
technologies being a product, an import to Africa?
Ms. Tandy. We actually--as a company, we have had some
projects in Africa that I could provide you some more
information about. Some wind-powered projects in Namibia as
well as solar powered infrastructure that one of the mining
companies has utilized in the rural area of South Africa. So we
do see some potential there.
Ms. Woolsey. Anybody else?
Mr. Hayes. Yes.
Ms. Woolsey. Yes?
Mr. Hayes. There is actually enormous potential on the
renewable energy resources. Germany and Sweden are already
doing quite a bit in Africa. South Africa is turning to a lot
of renewable resources in terms of its planning. So there is
just an enormous market there also for U.S. companies of
smaller to medium-sized to become engaged with Africa. Again,
the issues of financing, where are they going to get it to get
in, and government coordination.
Ms. Woolsey. Thank you very much.
Mr. Payne. Thank you. Let me ask a question or two. As we
know, the U.S. imports primarily are Nigeria--well, natural
resources in generally speaking either mined products or oil
and so forth. And I am just wondering if there are, in your
opinion, any other promising markets? For example, agriculture
is, I think, underutilized. For example, in Zimbabwe, they are
getting ready to do a second crop. The first crop was pretty
good, but the second crop they expect to be very good. In
Nigeria, you could probably do three crops.
Are there any--and livestock with cost of commodities
increasing. At least a year or so ago, they were very high.
They dropped a bit, but commodities are--and the whole, you
know, agriculture business, is something that is going to be a
strong industry. Has there been any work on the part of the
business, Steve, that maybe your corporate counsel or the
chamber that are trying to--I know you are in technology, Ms.
Tandy, so you wouldn't be telling people--you can't grow
computers. So I am just talking about the--what about that?
Have there been a stressing of that to African countries?
Mr. Hayes. There has been on our part, and--but the African
countries know they can grow anything. Every country can
produce agriculture. As you know, Zimbabwe could feed the
continent under the right circumstances. Again, it wouldn't
take too much to change that.
The issues are on two different ends. One is the secondary
and tertiary benefits on agribusiness, canning and so forth.
That production capacity is lacking. They could sell to--with
the production capacity, they could sell to the United States
market very easily. And so that is another area where the
United States companies, and certainly in California with the
canneries, could expand again with the right inducements and
the right encouragement.
The second problem though again is the agricultural
subsidies here that prevent a lot of--that prevent competition
from Africa. So, we have to also address the subsidy issues
that Senator Luger has also pointed out. But Agribusiness is
greatly underutilized. I am concerned that AGOA is too
dependent on textiles. We have to broaden that, and yes, so I
have said enough.
Mr. Payne. I agree with Senator Luger. I don't know who
agrees with whom first because I was talking about ending
agricultural subsidies, you know, right when I first came to
Congress. And I think we are finally hopefully going to get
around to that. I mean it is going to be slow and people
kicking and screaming, especially from our farm belt. But I do
see hopefully that subsidy, because it really is in opposition
to WTO and other world organizations.
I wonder, Ms. Tandy, if there is any possibility for
technology to grow in Africa. For example, I understand that
Rwanda was interested in trying to see if they could wire their
country to be sort of a center for broadband or, you know, are
there any possibilities for that kind of--even why not have a
call center in Ghana, where they speak English, or Kenya? You
could probably less detect it than the Indian saying I am Sam,
with this I am Sam, and I live down the street so to speak. Is
there any possibility of having call centers in Africa, in your
opinion?
Ms. Tandy. I don't know whether that has been explored.
However, it makes sense that it is certainly possible in
Africa. There are tremendous number of entrepreneurs springing
up throughout the continent that we are also investing and
giving grant money too, and technology. So, there is no reason
why a call center, as far as I know, couldn't be part of the
future in Africa.
Mr. Lebedev. I would echo that, that Africa has a wonderful
resource of English language speakers. Certainly there is some
market maturation in India right now, and one could argue that
there might be cost competitive advantages in Africa. So I
think that, to your point and Ms. Tandy's point, I think that
is a sensible area in which to look.
Going quickly to your question about agribusiness, I think
also, again, as Steve said, creating the right inducements to
get the right companies there and even setting aside the
barriers to shipping back to the United States. There is a
billion people there that need to be fed, and too many of these
countries are already net importers of food. And for sure there
is an opportunity for domestic consumption of a variety of
things that big companies can help grow there on the spot.
Similarly, I think you could look at certain grains because
it is from grains that we can do some very interesting things
with biofuels. And again, looking forward, these are the sorts
of things that should be indigenous industries in Africa. We
wouldn't, you know, it would be nice to have them sort of grow
from the bottom up some opportunities like that that also
affect climate issues very directly.
Mr. Payne. Yes, Dr. Cook.
Ms. Cook. So I think on the last point that you make, this
is really perceptive in terms of technology. When I was
advising the Rwandan government for its first post-genocide IMF
program, one of the things that I included in terms of a
recommendation it was taking advantage of the fact that 90
percent of its phone system was digital. There is no other
phone system in Africa that could claim that. And this provides
a number of different opportunities, a number of different
applications that would be possible through this digital
system.
So I think that there are a number of opportunities not
just with call centers. I was suggesting that it become the
Memphis of Africa in terms of Memphis being the center of
FedEx, where FedEx is located. And it is centrally located. If
you can have high school graduates who could use technology
really easily, this is a great place to locate that kind of
application.
But to go back to your first question about what kind of
agricultural products might the U.S. partner with Africa to
develop. Specialty coffee and teas. I was mentioning before
that Kenyan and Ethiopian coffees are becoming ubiquitous in
America, and I think that the same is true for Burundi. I mean
this is a burgeoning market for Tanzania, for other countries
in east Africa.
Tourism. So I think that developing tourism is a non-
trivial thing in Africa. I think it could have huge benefits.
It is a niche market, but it is a niche market just like
specialty coffees and teas. And I think it is growing by leaps
and bounds.
And in terms of other kinds of agricultural products,
cassava, I think that this is all over Africa. And it has so
many different applications. It is almost like our garlic, and
there are so many different things it could be used for.
Biofuel, starch in clothes, dyes. And I think that if there was
a way we could help with developing their research to be able
to use these products, I think we would be doing them a
tremendous service, and we would benefit from that, too,
because I think we would learn a lot more from these products
that we don't have that aren't indigenous to the U.S.
Mr. Payne. Well, that is good. When you mentioned Memphis,
I thought they were doing some blues over there. But no, so
the--let me--I have just been informed that President Dubaki
just recently connected the first of several fiber optic cables
in Mombasa. So this seems like they are starting to move
forward in that regard, and I do think there are tremendous
opportunities.
Let me certainly thank the panel, and I thank all of you
for your patience. Once again we apologize for this day. It
will be the same tomorrow though and Friday. So you wouldn't
have escaped it if it was not on this day. And so, we do intend
to have a follow up.
Chairman Rush has a strong interest and since his
jurisdiction is commerce, trade, and consumer protection, we
are really going to try to work together. This is probably the
first time this particular subcommittee have dealt with trade
in Africa, and it just happens that his interests coincide with
the interest of the Africa and Global Health Subcommittee. So I
think that we will try to really have some Rush-Payne or Payne-
Rush activities to see if we could kind of stimulate this area.
And I would like to thank the members who did come and
stay. Let me just conclude by saying I ask unanimous consent
from members to submit additional questions for the record, and
for members to have five days to revise and extend their
remarks. Without objection, so ordered.
Secondly, I ask unanimous consent for entering into the
record a statement provided by Francois Baird about a survey of
the views of U.S. corporate executives about foreign direct
investment in Africa. Without objection, so ordered. Thank you
very much. The meeting is adjourned.
[Whereupon, at 5:55 p.m., the subcommittees were
adjourned.]
[Material submitted for inclusion in the record follows:]
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