Seeking a New Path to Stability in Sudan, and Africa

The Obama administration on October 19 announced a new U.S. policy on Sudan that seeks engagement with the Sudanese government to end atrocities in Darfur, implement the peace agreement between North and South Sudan, and prevent Sudan from becoming a haven for terrorism. Johnnie Carson, assistant secretary of state for African affairs, says for the United States to offer incentives, Khartoum will  need to show clear progress on all three areas. On development issues facing the continent, he stresses the importance of spurring an agricultural green revolution similar to that of Asia in the 1970s, and of encouraging regulatory reform that attracts greater foreign investment. "There is no doubt that the greatest driver of development in Africa over the long period will be from foreign and domestic investment," he says.

There’s a perception that Africa isn’t a safe place to do business because of some of the conflicts reflected in major media coverage of Africa, probably most notably right now, Sudan. The administration has announced a new Sudan policy that focuses on Darfur, the implementation of the Comprehensive Peace Agreement, and preventing a safe haven for terrorism in Sudan. Which of these three areas would the Sudanese government need to show progress on to receive incentives from the U.S. government?

Sudan would have to show progress on all three of these areas. They are all extremely important and they are not divisible. We need to see an end to the humanitarian crisis in Darfur and a resolution of the political conflict that exists in that region of Sudan. We need to see a full implementation of the North-South peace agreement. We have to have continued assurances that Sudan will not in fact become a safe haven for international terrorists. Progress must be concrete, identifiable, and irreversible across a broad front. There will be benchmarks and milestones, which are clearly recognizeable by us and by them as progress, but all of these issues are all of significant and important weight to us.

Let me also say something about your question about American investors saying that it’s instability that is at fault. Far too many American investors look at Africa as a single, homogenous, unified, monolith. Africa is composed of some fifty-three different African states, forty-eight of them in sub-Saharan Africa. Comparing Botswana, South Africa, and Namibia to what is going on in Sudan is the equivalent of saying that Chicago was in turmoil when Katrina hit Louisiana. The distances between Chicago and Louisiana are as great as the distances between Southern Africa and Khartoum and the differences are just as stark as well. It is important that African countries do as much as they possibly can to insure that they have the kind of legal and regulatory environments that are pro-business and pro-growth. It is equally important that American companies also do their due diligence in looking at African countries individually and not associate the crises that may occur in Darfur or Eastern Congo with the real prospects for being able to advance their business interests in Tanzania, for example, which is remarkably stable and has been since its independence in 1963.

The Comprehensive Peace Agreement [CPA] is such a complicated document with many benchmarks and different tasks that are meant to be accomplished ahead of the 2011 referendum [on whether southern Sudan will become an independent state]. Could you highlight two or three concrete implementation benchmarks that you are looking to as the most important ones that the Government of South Sudan and Khartoum will need to meet in the next year?

With respect to the North-South agreement, it is important that agreements be reached by the North and the South on the census that draws up the number of people who are in fact in the North and who are in the South. Second, it’s important that the national elections that were agreed to in the CPA be held. Thirdly, it is important that the modalities on the referendum be agreed to in the North and in the South as to whose votes will be counted, what percentage will be required for unity, or for independence, depending on what the people decide. There must be a decision on the issue of the census; there must be a completion of the national elections; there has to be a date certain for the referendum; and the modalities of the referendum, including the actual percentage required for yes or no, also should be worked out. There should be an agreement on how the referendum will take place in the Three Areas--Kordofan, Blue Nile, and Abyei. All of those issues are yet to be fully resolved but they have to be fully resolved if there’s going to be a peaceful transition.

The United States is focused on sustained economic development on the continent. Could you talk about one or two countries that you see as models in terms of forward-thinking development policies?

Even in a time like this when the global economy is in relatively difficult shape, countries like South Africa, Mauritius, Botswana, Namibia, Tanzania, and Ghana have all adopted pro-growth policies. They have all accepted the notion that they need sound currencies; they need to have a balanced budget; they need to have good fiscal policies; they have to have good environments that promote both domestic and foreign investment; they have to have good regulatory environments; and they have to be good stewards of the resources that they have in their country. Along with countries that I’ve mentioned, I would include amongst that list Rwanda, which has in fact done remarkably well. All of these countries tend to have good central banks, good finance ministers, excellent policies, good environments for voting, trade, and investment.

What are the primary tools that the United States will be using to complement existing African economic development efforts?

We need to continue to be a strong partner in providing development assistance to the African countries in greatest need. We need not only to provide humanitarian assistance where it is required, but we also need to have foreign assistance programs that help Africa deal with the issues related to health, education, and human capacity growth, because those are areas that are frequently important but underfunded. The second part is clearly the need to do everything we can to support the expansion of trade and development and foreign investment into African countries. There is no doubt that the greatest driver of development in Africa over the long period will be from foreign and domestic investment. Foreign and domestic investment will help set up businesses that provide employment, that will provide production, that will provide a base of revenue for taxes for governments, that will build up exports, that will drive the earnings of foreign exchange, and that will probably--if it’s good capital investment--help create smaller companies that will also do the same thing: create job opportunities, create employment for people, create tax revenues for governments, create product sales, some of which will be for export.

We can [promote] that, as we should, through continued support for AGOA [the African Growth and Opportunity Act], which remains the most important instrument for trading with Africa. It opens our market to approximately six thousand items on a duty-free basis. We encourage African countries to diversify and to take greater advantage of  that. Many African countries that have been a part of AGOA have largely used the textile benefits from AGOA. Only one country, South Africa, uses a broad range of the AGOA trade benefits. We still think that AGOA is extremely important, we think that MCC [the Millennium Challenge Corporation] is extremely important. The Overseas Private Investment Corporation [OPIC] is extraordinarily important because it provides loans and loan guarantees to American investors going overseas. We think that the Export-Import Bank, which is a source of financing for American companies investing in trade in African countries, is critical. And we hope that there will in fact be a successful Doha round because that too can provide benefits for trade and investment for African countries. But beyond that, we hope that the U.S. Trade Representative’s Office will continue to play a very useful role in broadening out the trade and investment agreements that can be signed with African countries.

Can you discuss the motivations behind the agriculture and food security initiative that has been announced by the administration? Why is the United States making this initiative such a priority in its overall Africa policy?

Some 60 to 70 percent of all Africans depend primarily or secondarily on agriculture as their primary source of livelihood. Over 50 percent of all Africans continue to live in rural areas where agriculture is the primary source of their economic existence. Agriculture remains the most important economic sector for the vast majority of Africans in sub-Saharan Africa. Doing something in agriculture probably has a greater impact on the average African than almost any other area. But as we well know, the agricultural sector has generally underperformed [in] Africa. The whole effort here is designed to help in hunger, food shortages across the continent, and to help give Africa the opportunity to create the kind of agricultural green revolution that helped to transform Asia and Latin America twenty years ago. That agricultural green revolution has not come to Africa. If it can be brought to Africa, it can help to end hunger and starvation at the family, village, and community level. But it can also help to generate substantial agrobusiness across Africa, where those countries that have favorable agricultural conditions are able to grow increasingly large volumes of crops and export and sell them to their neighbors or sell them overseas in a broader market.

One interesting part of the policy is the focus on regional integration on the continent, where many countries are landlocked and would benefit from trading with their neighbors. How can the United States encourage regional integration?

One is to work with the regional organizations to remove and eliminate tariff barriers, especially on things like agricultural products. [Another is] to improve and increase the uniform nature of vital sanitary conditions that apply to the movement of agriculture and livestock across borders. We can hopefully work with those organizations to improve the regulations and the trade regimes that have inhibited movement of food across borders. We can work with governments to improve the infrastructure that exists between countries, both road and other transportation networks. All of these things are important to get crops across borders from one country to another. Small market sizes sometimes create problems but they can also provide opportunities.