African dilemma and American response
AFRICA presents the greatest development challenge of this decade. The immediate problem is famine. Millions of Africans will go hungry in 1984 because of what may be the most severe drought of this century. In response, the international donor community is mobilizing additional aid for the region. The Reagan administration has requested, and received, $90 million for emergency food relief. Congress wants to allocate an additional $60 million. This will save some people from immediate starvation, but the real problem is chronic underdevelopment. The challenge is to strengthen the fragile African economies so they are able to deal with natural and external shocks in the future.
African economic growth has lagged behind the rest of the developing world since independence, and this lagging development is costly in human terms. The average African has an income of $41 a month, and if current trends continue he or she can expect to earn less next year. Roughly 1 in 4 Africans is literate. The probability of a child's dying before the age of one is 10 times greater in Africa than in the United States. Africa's population is growing faster than food production. Endemic poverty means that when African economies are disrupted by natural or external events, there is little cushion to absorb the shock.
Yet the region's long-run economic potential is good. The population of Africa is half again as large as that of the US - the intellectual and physical potential alone is enormous. Africa is also rich in natural resources; properly harnessed, the land, minerals, oil, gas, and renewable energy resources at the region's disposal are substantial tools for growth. To use these resources effectively, however, African policymakers must overcome three sets of problems.
The first obstacle is the harsh international environment. Two oil price shocks, global recession, and declining terms of trade have hit African economies hard. During recession, the demand of industrialized countries for African exports shrinks and prices decline. Declining export earnings make it increasingly difficult to import needed food and more expensive oil. Most countries are too poor to borrow commercially, and the decline in public revenue erodes the ability of governments to make investments needed for development.
African countries also face severe environmental constraints. Vast areas are incapable of supporting the food and energy needs of a growing population because of frequent drought, the spread of desert, and a variety of plant, animal, and human diseases. African forests are disappearing as the need for fuel wood rises, and this contributes to erosion and poor soil quality. Without tools to increase food production per acre, African farmers struggle to increase the production by shortening fallow times and increasing the use of marginally productive land. The long-term result is soil degradation, food that is less nutritious, and still lower yields per acre.
Finally, African leaders have created their own problems. Unwise domestic policies rely too strongly on government intervention, misallocate resources, and hamper private-sector activity. In many African countries the agricultural sector has been neglected, despite the fact that the bulk of the population lives in rural areas.
Despite the problems, the World Bank has projected brighter prospects for African economic growth, if two conditions are met. First, African leaders already beleaguered by rising national expectations in the face of continued poverty must make some very tough policy reforms. Second, the donor community must offer far greater financial support.
To encourage policy reform and support the policies in action, the Reagan administration has proposed a new bilateral aid program for African countries that adopt growth-oriented economic reforms. The thrust of the Economic Policy Initiative (EPI) is to increase incentives to private producers, particularly in the agricultural sector. The administration is to be commended for focusing on the right kinds of issues. Policy reforms that increase food and export crop production are obviously a vital ingredient for African development.
Regrettably, the EPI fails to address two crucial issues: donor-recipient policy coordination and aid levels. The administration expects the World Bank to take the lead in strengthening donor coordination in order to provide broader support for African policy reform. Yet, in deciding to create a new bilateral program, while cutting US funds channeled through existing international institutions, such as IDA, the bank's soft-loan facility, the administration weakens the leadership role of the World Bank. It may also be overestimating the ability of the US to persuade African leaders to make politically and socially difficult policy decisions.
The amount requested under EPI ($500 million over five years) is nowhere near the US share of what the World Bank estimates Africa needs to achieve a positive growth rate over the next decade. To be sure, the US alone cannot provide all the aid that Africa needs for development: An international effort is required. The US can, however, lead the way by increasing bilateral and multilateral assistance. It can also help by mobilizing its resources toward creative and innovative solutions to Africa's problems.
The longstanding objective of US foreign policy is the alleviation of poverty and human suffering abroad. Americans can be proud of their quick response to the emergency food needs of Africa. A greater achievement would be if emergency relief were no longer needed. The EPI is a step in the right direction, but much more can and should be done.