Making Trade Work for Development
Minister Micheál Martin’s recent trip to Ethiopia and Uganda has clearly been a success: since his return the Minister has been advocating greater involvement by Ireland in Africa. He wants to see greater investment by Irish companies in African countries, and he wants to publish a separate “Africa Strategy” to complement the work of Irish Aid.
“As a first step, I intend to instruct our missions in Africa to give greater priority to promoting economic and business links with Ireland,” the Minister said. He added that while this was being done already in a number of countries, he believed more could be achieved. The Minister also said he would be seeking to develop alumni networks of Africa-based professionals who were educated in Ireland, while Irish Aid would be asked to support a business promotion event in Dublin that has been proposed by African ambassadors who are resident here.
On a State visit to Ethiopia last month, the Minister said Irish companies could no longer afford to ignore business opportunities in Africa and that the development of trade links would benefit Irish businesses and Africans alike.
Ireland needs to see Africa as an investment, not a charity case
Crucially, the Minister is not arguing for tied aid: He is adamant we should not use aid money to benefit Irish companies. In other words, the aid programmes will not be linked to commercial contracts, as, according to the Minister – and we would wholeheartedly agree – “this is not ethical from our perspective”.
What Minister Martin wants to see happening, is that Ireland wakes up to the potential of the African continent, and stops thinking of Africa as only a basket case destination of Irish aid money. – Exactly what Dóchas has been saying should happen (just read this letter and this blog post, not to mention our work on combating stereotypes of Africa).
Minister Martin rightly points to the fact that Africa’s economies are growing at ever increasing rates and that “the African continent will have the largest workforce in the world by 2040.” In his view, Ireland’s overseas aid programme should remain focused on poverty eradication, but the new Africa strategy should facilitate economic growth, which ultimately could remove the need for aid.
Apart from his trip and the reported visits to Irish companies in Uganda and Ethiopia, it is possible that the Minister got his inspiration from a recent McKinsey Global Institute report, “Lions On The Move”, that argues that global businesses cannot afford to ignore Africa’s economic growth, and its future potential.
From 2000 to 2008, the continent’s economy grew about 5 percent per year – more than twice the pace of the previous two decades. The telecom, banking, and retail sectors are humming as more Africans move to cities. Foreign capital investments have surged, from $15 billion in 2000 to $87 billion seven years later. Africans spent more in 2008 than Indians – with roughly the same population, 1 billion in Africa, 1.2 billion in India. And the number of Africans who have signed up for cellphone service in the last decade surpasses the population of the United States.
In short, the Minister is absolutely right in calling for a more explicit, and more proactive, engagement by Ireland in all things “Africa”. It is high time that we move beyond “Aid” as our main interaction with African nations, and that we engage in “Cooperation” proper: cooperation between equal partners, towards shared objectives.
Building the necessary infrastructure
The Minister’s idea to start with a “business-to-business event” is a good one. But if we want to make genuine progress towards greater private sector engagement in Africa, we need to ensure that the support infrastructure is there.
- It is not enough to simply inform Irish businesses of the trade opportunities that exist. The State’s massive apparatus for attracting businesses into Ireland must be matched by a similar support infrastructure for companies that want to bring African produce onto the Irish market. This is a job for the Department of Trade and bodies such as Enterprise Ireland, and a (to be created) sister agency of the IDA – it certainly is NOT the responsibility of Irish Aid.
- Secondly, the Government should go beyond merely supporting trade with Africa. It should actively ensure that Irish trade with the continent doesn’t do more harm than good. Government support should depend on guidelines for ethical business practices, including core labour standards, and environmental and social concerns. It need not be Fair Trade, but it should not be exploitative either. In addition, the Government should provide active support to companies that are making a genuine effort to adhere to these ethical standards.
- Thirdly, the Government should fund an awareness-raising drive among Irish companies, about the important contribution they can make towards the Millennium Development Goals (MDGs). Companies should be encouraged to detail their developmental impact, and to enter into their own “MDG Compact”: a pledge in which they state what role they see for themselves in furthering the Millennium Development Goals. (not so much along the charitable lines of the Davos example, but more along the Dutch Schokland Agreement example)
- It may seem obvious, but it’s important to ensure that Irish trade policy does not undermine the Irish aid programme.
Another condition: keeping our promise
And finally, the Government should honour its aid promise. Our aid programme is making real and tangible differences in the lives of poor people, and our commitment to human development generates good-will across the globe. If we show that we are a country that can be relied on, and that keeps its promises, we will greatly enhance the prospects of Irish businesses abroad.
Our strategy to combat the recession is based on the need to repair the damage to our international reputation that has arisen out of the banking crisis. We now need to demonstrate that we are a country capable of keeping its promises, and willing to play its full role in the global society of states. Through the aid programme, we are given a chance to do just that.
No doubt, the Minister has started a valuable discussion. Hopefully these blog thoughts will encourage him, and all of us, further down this path.
Entry filed under: Government, MDGs, Overseas aid. Tags: Africa, competition, donors, Effectiveness, fair trade, Foreign Policy, global poverty, Government, Hunger, Impact, Irish Aid, Irish NGOs, MDGs, Millennium Development Goals, NGOs, Overseas aid, Partnership, policy coherence, Private Sector, Smart Aid, Trade, UN.