Barack Obama - One of US?

Business in Africa Magazine June 2009 By Scherzando Karasu

It still feels strange saying it: The son of a Luo goatherd (who went on to become a Harvard-educated government economist in his native Kenya), is now the president of the United States of America.

Barack Obama is a son of the continent his African roots are both personally deep and politically significant, a man who knows Africa from the ground up. His inauguration as the 44th president has been hailed worldwide as a remarkable watershed in America’s history, but nowhere are the expectations of him more stratospheric than in Africa. From an African perspective, the power of Obama lies in the symbolism of his election. The shift in people’s perception of what is possible has already had enough positive effect for Obama to never lift another finger and still be declared a success.

But during his campaign Obama was taciturn on Africa. Whilst touring the continent in 2006 as a freshman Democrat Senator from Illinois he said, “One of the messages I’m going to send out is that ultimately, Africa is responsible for helping its self”.

That’s all very well as long as it triggers an era of commercial pro-activity, not passive withdrawal.
Political persuasion, ethnicity and religious inclinations aside, all Africans expect President Obama to keep faith with his ancestry and affect a difference on the continent – and signal the dawn of a new relationship with the United States.

Among the many African leaders who congratulated Barack Obama on his victory was South Africa’s President Kgalema Motlanthe saying, “The election carries with it hope for millions of your countrymen and women as much as it is for millions of people of African descent both in the continent of Africa as well as those in the diaspora”.

Mothlanthe was the only African leader at London’s historic G20 meeting this April, and as such represented the hopes of Africa in helping to set a new global economic framework, which ultimately has the objective of distributing wealth in a fairer fashion. Perhaps he might make inroads on that relationship before Dr Zuma takes the helm of Africa’s richest nation?

Candidate Obama indicated three fundamental engagement priorities in America’s dealings with Africa: to accelerate the integration of Africa into the global economy, to enhance African peace and security and to strengthen African institutions and civil society.

His policy initiatives and rhetoric towards one of Africa’s bloodiest conflicts has been unequivocal; he was vocal on US policy towards Darfur condemning the Sudanese government as, “chiefly responsible” for the violence and demanding the Khartoum regime adhere to the Comprehensive Peace Agreement whilst as a junior Senator he co-signed the Darfur Peace and Accountability Act in 2006.

Joe Biden, his Vice-President, has called for a threat of military action against the Sudanese government to stop the killings and Susan Rice, Mr. Obama’s ambassador to the UN, has backed the threat of force. If the Sudanese conflict escalates, Obama could face some difficult choices.

He has been outspoken in the past on US policy towards Zimbabwe saying that the government of Robert Mugabe is, “illegitimate and lacks any credibility”. And he has urged South Africa’s ruling African National Congress to help stop the repression in Zimbabwe. Could a proactive call from the oval office, inhabited by a popular new African-American President be enough to squeeze Robert Mugabe from power?

In Kenya, long one of America’s closest allies on the continent, people may well expect that the grandson of a Kenyan owes it the country to become involved, should the shaky coalition that has held there, since the internecine violence that marred the 2007 election, start to unravel. However strong his family ties however he is unlikely to want to intervene directly. Somalia, another of Africa’s nastier conflicts, is also unlikely to warrant further American intervention. None of the conflicts in Africa has an easy solution and Obama is likely to tread with caution, knowing that America has no particular leverage over these places.

In the fight against poverty Obama has pledged to double America’s annual investment in foreign assistance from $25 billion in 2008 to $50 billion by the end of his first term and to make the Millennium Development Goals, which aim to cut extreme poverty by 2015, America’s goals.

Obama’s first overseas coming out ceremony was his trip to the London G20 summit in early April; World leaders faced an unprecedented range of challenges from averting an even more severe downturn whilst reshaping the financial system, preserving the world trading system, and laying the foundations for a recovery.

Attending the meeting where rrepresentatives from several African states, including; Liberia, Ethiopia and South Africa. Delegates pledged an additional $850 billion for the international financial institutions, including an extra $500 billion to the International Monetary Fund. As well as a special drawing rights (SDR) allocation of $250 billion and at least $100 billion in additional lending from multi-lateral Development Banks and to ensure that national representation is more line with the changing balance of the world economy.

Other significant pledges made at the London Summit included; $50 billion to support social protection, boost trade and safeguard development as part of a significant increase in crisis support for emerging markets as well as providing $6 billion in additional flexible finance for the poorest countries.

World Leaders of whom Obama was the undisputed superstar, also re-affirmed their historic commitment to meeting the Millennium Development Goals, including commitments on Aid for Trade, debt relief, and the Gleneagles commitments, especially to sub-Saharan Africa. Collectively then let’s hope that $1.1 trillion USD package can thus help mitigate further negative impact of the global financial- crisis on Africa.

Business in Africa would inject a note of caution that the massive increase in financing through the IMF and World Bank has to be judged against its ability to help achieve the MDGs. Not only is $1.1 trillion of financing for international bodies not the same as $1.1 trillion of extra spending.

The main source of new cash from the G20 gathering was a promise to create $250 billion of Special Drawing Rights. That is supposed to add to global liquidity by boosting countries’ reserves. However since most of these SDRs will sit in the central banks of the world’s biggest economies, they will do less to support demand than the headline figures suggest. The much-touted tripling of the IMF’s resources from $250 billion to $750 billion is, for the time being, more an aspiration than reality. So far, only about half the extra money has been pledged, much of it long before the London G20 summit.

More inclusive governance of the International Financial Institutions is certainly needed and present commitments to this have been slow to materialize, a priority for Obama might be to give emerging economies more clout.

The G20 has promised to increase their “quotas” or shares in the fund; a quicker solution would be to cut the majorities needed for big decisions, to remove what is in effect an American veto. Lastly the rhetoric on protectionism must be closely monitored. Seventeen out of twenty countries have not kept their commitments on trade protectionism from the last G-20 summit, and financial protectionism has increased.

As well as funding debt cancellation for Heavily Indebted Poor Countries Obama has promised to expand the President’s Emergency Plan for Aids Relief (PEPFAR, a George W Bush creation, who remains popular in Africa for this contribution) with at least $50 billion by 2013. The programme has kept at least 2.1 million people, most of them African, on life-saving antiretroviral drugs for several years.

Obama is unlikely to radically change a policy that is working well. But given the parlous state of the American economy, he is not currently in any sort of position to increase aid to Africa. His election manifesto did though offer policy solutions to expand prosperity by establishing the Add Value to Agriculture Initiative, which will aim to extend seed capital and technical assistance to small and medium enterprises in the sector.

There are also plans to launch the Global Energy and Environment Initiative to ensure African countries gain access to low carbon energy technology. As well as vowing to strengthen the African Growth and Opportunity Act, (AGOA) which assists countries in Sub-Saharan Africa gain access to the US Market.

Nelson Mandela wrote Obama a letter after his victory in which he touched on the fears and hopes for Africa, “your victory has demonstrated that no person anywhere in the World, should not dare to dream of wanting to change the World for a better place, we trust that you will make it the mission of your Presidency to combat the scourge of poverty and disease everywhere.”

Obama has spoken out in the past of his meta-physical connection with Africa. In his 1995 memoir, “Dreams from my Father”, he recalls his first trip to Africa, when in his late 20’s he wept as he sat between the graves of his father and grandfather.

Barack Obama, the first African-American President of The United States has made history and has considerable latitude to influence policies that can change lives across the continent. Of all the members of Africa’s Diaspora, Obama is surely the one most likely to drive the change that is needed.