The African economy is poised to become the fastest growing economy in the world over the next five years. Unfortunately, the American government, the global foreign aid community and business interests around the world have no meaningful, reliable or easily accessible way in which to monitor this growth. It is time that the U.S. federal government begins to play a more active role in fostering the development of capabilities with which economic data from emerging markets can be more easily analyzed.
Data is clearly king in the 21st century. Somehow, however, our analytic capabilities with respect to an entire continent remain woefully inadequate. In order to improve the competitive economic position of the United States in Africa, in order to achieve our foreign policy objectives and in order to expand market access for U.S. businesses abroad, I believe that the U.S. federal government should actively sponsor efforts seeking to improve economic data collection by creating, processing and making available a large data repository of useful, open-source data on emerging markets.
{mosads}Over the past decade, the African continent has become a land of opportunity for many. The International Monetary Fund expects this trend to continue, predicting that out of the 20 fastest growing global economies in the next five years, over half will come from Africa. While this is heartening, growth has been uneven. U.S. investment has focused primarily on textiles, oil and gas — not exactly the economic sectors that typically lead a nation to grow into a powerful, modern economy. If global development is to occur in an environmentally friendly and stable way, investment grade data on other sectors of emerging market economies must be produced in order to attract investment.
One example of the need for better, more robust data is the new World Bank Group initiative Investing Across Borders. This commendable initiative seeks to regularly report on foreign direct investment around the world, gathering data from 87 countries. The latest report, from 2010, however, sampled fewer than half of the African economies. This lack of information regarding emerging markets, which is typical, disallows even standard comparative analysis of economies within a region when attempting to determine where investment efforts should be directed. This handicap continues to result in a reality in which the same regions are either continually supported or neglected, leading to inequitable, and undesirable, growth patterns across the continent.
Private industry follows an even less desirable model. Data providers to the financial and investment communities follow the low-cost model of aggregating data in areas and industries where data are already readily available, further leading investment to follow the data and the data to flow from the investment. Publishing low-quality data, which may be useful in certain instances, can quickly undermine corporate reputations, and growing data collection efforts beyond narrow business sectors can quickly become cost-prohibitive. This reality, again, displays the need for new actors in the data aggregation and publication space — actors that represent the public and global interest and that are able to bear the financial burden of such activities without immediately fearing the cost.
I believe one of those actors can, and should, be the U.S. government. By contributing to the effort of collecting, disseminating and analyzing investment-grade data, I believe we can enhance the prospects of workers in emerging markets, increase business opportunities for American businesses abroad and engage in foreign aid efforts in those areas that truly need it most. Toward that end, I intend to focus on this issue further from my seat on the House Foreign Affairs Committee, and I will be seeking appropriations report language over the next few months that seeks greater inter, and intra, agency coordination of such efforts.
Meng is a member of the House Foreign Affairs Committee.