July 24, 2013 | The Editors

Africa: trade or aid?

What is the most effective way for America to help improve the lives of the world’s poorest and most vulnerable people?

Guest contributor Heather Ignatius is senior policy and advocacy officer at PATH.

Earlier this month, US President Barack Obama traveled to sub-Saharan Africa, where he emphasized a new approach in the United States’ foreign relations with African nations: private investment and trade as a tool for growth that can help build Africa’s self-sufficiency.

On previous visits to African nations and other developing countries, in contrast, representatives discussed US foreign aid goals and the government’s role as a major donor for development. The president’s latest comments signal a shift in US policy away from foreign aid as a tool to stimulate economic growth and toward an approach that relies on trading relationships as a driver of prosperity.

Aid targeted to improving health is still vitally important in Africa. Photo: PATH/Gabe Bienczycki.
Aid targeted to improving health is still vitally important in Africa. Photo: PATH/Gabe Bienczycki.

Initiatives to build sustainability and self-sufficiency in Africa are long overdue and will significantly enhance the United States’ relations with African nations. In an era in which US foreign assistance is shrinking, measures to stimulate trade and private investment are becoming a greater driver for economic growth. At the same time, however, targeted foreign aid remains vitally important to improving some aspects of development in African nations, including health.

Aid for the most vulnerable

Often, investments in trade and economic development don’t reach the poorest of the poor. Despite Africa’s projected robust economic growth, for example, the continent’s poorest residents still face serious threats to their health. Africa is home to 12 percent of the global population, yet worldwide,  half of all maternal deaths and half of deaths of children under five occur in Africa. Investments in markets may help African prosperity overall, but the most vulnerable people—like these mothers and children—will continue to require targeted aid.

For a relatively small investment, Americans can and do help. Foreign aid makes up less than 1 percent of the federal budget—and just a fraction of that 1 percent goes to programs focused on improving health. Cuts to the aid budget would have little impact on reducing the US deficit. But they could result in major losses for people in developing countries who rely on government health services enabled by US support.

US taxpayer’s contribution: $14.14

In fact, a recent study by The Foundation for AIDS Research (amfAR) estimated that US taxpayers each annually contribute an average of $14.14 to government-supported global health programming. According amfAR, that contribution enables the delivery of:

•    HIV/AIDS treatment for one person for two and a half weeks; or
•    malaria treatment for 26 people; or
•    combination vaccines that prevent a variety of diseases for two children.

This is a perfect example of how aid can result in great payoffs for global health—and justification for arguments that we can do more.

Add to R&D

Research and development (R&D) can play a significant role in advancing health and promoting economic advancement and sustainability in developing countries. New technologies can bring transformative change into health systems and help equip them to better address their own health challenges.

At the same time, when products are developed in the countries that will ultimately use them, the capacity of local scientists and researchers to conduct research and development is simultaneously strengthened. PATH, for example, is exploring ways to establish hubs of innovation in developing countries with burgeoning R&D sectors, thereby strengthening growing industries while accelerating the development of products for those settings. Many of these efforts are supported by international donors, including the US government.

The United States’ contribution to development in Africa requires a variety of policy tools and partnership approaches, including foreign aid. Ultimately, these approaches must be applied to achieve the most important goal: improving the lives of the world’s poorest and most vulnerable people.

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