US African Initiative Needs Refining

President Clinton on his current trip to Africa can point to trade legislation passed earlier this month by the House of Representatives as an important indicator of US interest in Africa. Now awaiting Senate action, the bill grants special privileges to African exports and encourages investment in the continent.

This expression of interest will undoubtedly be a centerpiece of the president's message on his visits to Ghana, Uganda, Rwanda, Botswana, South Africa, and Senegal.

While official foreign assistance is diminishing, the new initiative seeks to promote trade over aid. In addition, it hopes to encourage democracy and free-market systems by limiting benefits of the legislation to those countries that are committed to these principles. For 10 years, exports of approved nations will enter the US duty-free and quota-free. The US Overseas Private Investment Corporation (OPIC) will establish special investment funds for Africa.

Citing democracy and the free-market systems as norms for participating countries is essential in the US context, but, as with other congressionally imposed conditions, determining which nations are eligible may not be so easy. When is a country deemed to be, as press reports describe the terms of the legislation, "moving toward democracy?" Are elections enough? Or must working legislative and judicial institutions be in place? Of the countries the president is visiting, only two, South Africa and Botswana, are listed in the 1997 Freedom House report as "free" - countries that "provide their citizens with a high degree of political and economic freedom and safeguard basic civil liberties." Ghana, Senegal, and Uganda are considered "partly free,"and Rwanda is classified as "not free."

The emphasis on trade and investment and the free market system provides further dilemmas. If past patterns are a guide, US business has relatively little interest in Africa. US exports to and imports from Africa constitute approximately 1 percent of total US foreign commerce. The $22 million of US direct investment in the continent represents about 1 percent of the US worldwide total. Foreign investors are responsible to their shareholders. They are looking for profitable ventures and may not necessarily pick democracies. Some prefer what they consider the stability and certainty of authoritarian regimes. The collapse of the Asian Tigers may cause some to rethink this approach, but African calculations may not necessarily be affected.

Primary targets for foreign investment in Africa lie in extractive industries, minerals and petroleum. The democratic countries may not be those with the best opportunities in these fields. Although one-fourth of US investment is in South Africa, much of the remainder is in countries such as Nigeria, Kenya, and Zimbabwe, none of which is considered "free."

Investors are already tempted by the possibilities in the Democratic Republic of the Congo. One report for investors points out that "the country's vast copper and cobalt wealth is concentrated in Shaba province which is also the home province of the new ruler Laurent Kabila." And Mr. Kabila has, despite the name with which he has rechristened the former Zaire, proven to be no democrat.

African nations may wish to encourage investments that will develop their own manufacturing, but neither OPIC nor the US investor is greatly interested in developing local manufacturing that may compete with US imports. Other opportunities may lie in the production of components for goods to be assembled in Europe or America, but Africans, with their colonial experience, may be leery of being exploited for someone else's product.

The problems of aiding the nations of Africa have bedeviled US policymakers from the earliest days of continental independence. Official assistance has never risen to levels commensurate with the needs and, although successes have been registered, the efforts have been constantly criticized by both donor and recipient. A new approach is desirable, but its success will depend on a delicate balance among US political judgments, African desires and sensitivities, and the realities of the global marketplace.

* David D. Newsom, former undersecretary of state, is Cumming Memorial Professor of International Affairs at the University of Virginia.