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The Daily Utah Chronicle

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The Daily Utah Chronicle

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U.S. needs to focus investment on Africa

Luigi Ghersi.
Luigi Ghersi.

While the news of the war in Syria and the relations between the United States and Russia continue to dominate the news, the rest of American foreign policy continues to be neglected and ignored. As China increases its investment in African nations, foreign aid for developing nations from the U.S. circles around one percent of the total budget for the federal government. 
Continued support for developing nations is not only good for the international community, but also extremely healthy for the reputation of the U.S. abroad and should not be neglected. We should take a lesson from China and turn our focus towards expanding economic relations, no matter what political differences there may be between the U.S. and developing nations if we want to continue to remain relevant on the world stage.
This is not so much about giving humanitarian aid to African countries, as it might have been ten years ago, but instead, it’s about working to help develop infrastructure in growing countries to allow for more economic development.
While China surpassed the U.S. as the African continent’s No. 1 trade partner four years ago — and is at an estimated $200 billion in trade for this year — the relation between China and Africa is unequaled, and around 85 percent of African exports to China are raw materials. If the U.S. is able to capitalize on this, we could boost trade between African countries and the United States, enabling both sides to obtain necessities.
Africa is home to six of the fastest growing economies in the world and is expected to continue at a breakneck pace in 2013, but the Chinese trade relationship has created unequal opportunities for African countries. While African-Chinese trade reached $166 billion in 2011, the fledgling African manufacturing industry has taken a hard hit.
In 2000, the African Growth and Opportunity Act was passed, allowing over 40 African countries to ship tariff-free to the U.S., pushing African exports to $54 billion in 2011. However, many of those exports are raw products, which are manufactured elsewhere.
When the African Growth and Opportunity Act comes up for renewal in 2015, the U.S. should seize the opportunity to expand the benefits that it offers to trade partners. Possible options include the proposal from the Brookings Institute to reward American companies for investment in Africa, such as a zero tax rate on repatriated profits that do not come from natural-resource removal.
But companies generally do not build roads — instead, they go where the infrastructure will allow them to succeed economically. That is why the U.S. should continue to bolster foreign aid to growing African countries. African countries such as Kenya and South Africa have recently announced ambitious plans to continue to build infrastructure, the basic building blocks of any functional economy.
We should support governments in building better infrastructure, as well as continuing to encourage American companies to invest in their fledgling economies. The U.S. government does not need to build these growing African nations, but instead only needs to aid them to allow for economic growth for both African countries and ourselves.

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