Trading in Rhetoric: When David said no to Goliath

June 6th, 2015

Everyone knows the biblical story of David and Goliath. It is the classic example of the underdog rising up to beat the unbeatable opponent. Even though it occurred in Israel thousands of years ago, people still use David and Goliath’s battle as a metaphor for beating the odds. Heck, Malcolm Gladwell even wrote a book with that title. Unfortunately however, stories like that of David and Goliath rarely actually occur (why do you think we’re still using an example from thousands of years ago?). In the real world David often takes a good beating from Goliath and goes home to skulk and lick his wounds. End of story.

The United States of America likes to see itself as a modern day David equivalent. They started off as the underdog: a British colony inhabited by settlers who came to the ‘New World’ in search of a better life. After years of being under Britain’s thumb, they finally gained their independence in 1776, and have since risen to become a superpower. The Little Americans Who Could beat the big bad British Empire. And with independence, the American Dream was born. No longer did your class determine your place in life – if you were a mechanic but wanted to be a lawyer, you could do it! If you were a high school cheerleader, you could one day become President! (Yes I’m talking about you George W. Bush). If however you were a slave – taken from your community in Africa to come be beaten to death in the ‘Free World’ – you pretty much had to stay a slave. Darn. Sorry fellas, better luck next time.

But I’m getting off track: Although America may have started out as a modern day David, it is now most certainly a Goliath. Fast forward past the abolition of slavery, a few World Wars, the Civil Rights Movement and the Cold War, and you have the global hegemony that America enjoys today. That’s the funny thing about success: you may start out with your whole image built around being the underdog, but once you’ve worked your way to the top, fighting tooth and nail, you earn the ability to do to others what was done to you when you were at the bottom. The oppressed become the oppressors, and the cycle continues, despite your promises that you would never sink to that level. Power is a funny thing.

Ok, so what does all that have to do with being in Uganda? Quite a bit actually. But let me rewind to what got me thinking about all of this in the first place: on Thursday Shelby, Jeremy and I had the good fortune of being invited to a Regional Stakeholder Consultative Meeting on Promoting Pro-Development Investment Policies and Agreements in the East African Community (EAC).* Quite the mouthful of a title. Essentially, the meeting was to discuss trade between Uganda and other, more developed countries (namely the United States and countries in the EU). Now, my knowledge of trade agreements is fuzzy at best, so for most of the day-long meeting I was frantically typing down things I didn’t understand, hoping that they would formulate themselves into coherent ideas later. But no such luck. So please take the following explanation of international trade with a grain of salt, and if I butcher it I apologize:**

Over the last several years East Africa has had a spike in economic growth. In fact, of the top 20 fastest growing economies in the world, three of them are in East Africa. This region is resource-rich and as such it possesses valuable commodities like minerals that can be used in cellphones and computers (odds are at least a small percentage of your smartphone originated in East Africa). Naturally, countries that don’t have these resources want to get their hands on them. One way to do this is through foreign direct investment, or FDIs. Basically an FDI is exactly what it sounds like: a foreign country invests in a country they are interested in, which in theory gives the former country the resources they want, and the latter country’s economy is boosted and more local jobs are generated.***Because these are desirable outcomes for a country like Uganda, for the past several years the Ugandan Investment Authority has been promoting FDIs.

To take it one step further, now Uganda is looking into signing Bilateral Investment Treaties (BITs) with the US and countries in the EU to help facilitate FDIs and other types of trade between the nations. The idea is that the US and the EU will have access to the resources they want, and Uganda can grow its economy with the hope of becoming a so called developed country. It’s a win win right?

Wrong. To see why, let’s go back to the story of David and Goliath: Goliath was bigger and stronger than David, and no one could argue that it was a fair fight. But because it’s a story – and maybe Goliath was having an off day, slept on the wrong side of the bed or something – David miraculously won. But that outcome was very, very unlikely. Probably about the same likelihood of an average American winning the lottery, and therefore reinforcing the idea of the American Dream. So let me propose a different course of action: What if instead of choosing to fight Goliath, David had turned it down? What if instead he politely said, “No thank you, you’re much bigger and stronger than I am, so I’d be a fool to think I could beat you. I’m no gambler, so I think I’ll need to hit the gym for a little while longer before I’ll be ready to fight. Maybe throw a few extra protein shakes into my diet, or do some crossfit (even though it seems a bit like a cult).Either way, I’ve clearly got some work to do, so why don’t I give you a call when I’ve bulked up a bit?” This scenario wouldn’t have been nearly as exciting, but it definitely would have increased David’s chances of winning in a fight against Goliath.

What Food Rights Alliance, SEATINI, and the other NGOs were arguing for at the trade meeting on Thursday was essentially a version of this alternative scenario. They saw right through the presentations by the sleazy reps from the Ministry of Trade who advocated for BIT agreements with the US. In 2008 the East African Community (EAC) signed a Trade and Investment Framework Agreement with the US where parties undertook to monitor and promote bilateral trade and investment between them, and now they want to move forward with this Investment Model Treaty. The EAC wants to take on Goliath, but SEATINI, FRA and the other organizations want them to wait. They want them to wait because while FDIs are fashionable, there is no evidence that they actually help a country develop. Sure they boost economic growth, but depending on the sector there are often very few jobs created, and those that are created are low level, low wage jobs.

Furthermore, foreign investors have their own agenda. They aren’t interested in helping Uganda develop; they’re here for inputs, markets, and cheap labour. Their interests are governed by the logic of capital accumulation. The reality is, they’re here to purchase Uganda’s raw materials at low prices, take them back home to process, and then sell the products for much higher prices. And what does Uganda get in return? A bit of economic growth, and the hope that by doing business with developed countries they will develop. Sounds to me like the US is getting tangible materials, and all Uganda gets in return is rhetoric and ideology – their very own American Dream. But ideology won’t feed people, and neither will rhetoric.

Back in the day Britain wanted America to sign a Free Trade agreement, but America said no. They recognized the need to protect their agrarian economy, because as a Professor of Political Science said at Thursday’s meeting, “free trade is not for the faint hearted”. Instead of accepting Britain’s offer, America invested in themselves and overtime their economy and their power grew. Then, years later when they were strong enough, they went back and re-tabled the idea of free trade with Britain. In this case David did exactly what Goliath didn’t want him to do: he waited until he was strong enough to fight, and then he won.

Now America is Goliath and the EAC is David. Goliath is asking David to fight, and it looks like David is going to fall for it. Unless the NGOs represented on Thursday can get their voices heard:**** they recognized that despite what it looks like, the EAC is actually holding all the cards. They have the goods, and all America has in exchange is some money and a dying idea that they’ve been peddling for decades.

My mom, a facilitator, says that you always have the most power before you sign a contract. That’s when you still have room to make requests and hammer out your terms. Similarly, the EAC is in a powerful position right now. As one representative at the meeting asked, “is one of the barriers to Uganda’s development not having a trade agreement with the US? Is Uganda losing by not signing the agreement?” The answer is no, they aren’t. Uganda has what America wants, and they can choose to give it to them or not. And as the professor of Political Science pointed out, “if trade and investment treaties are the answer, then what’s the question?” The proposed trade agreement says it will protect investments in both territories – but Uganda doesn’t have any investments in America, so really what it is saying is that Uganda will agree to protect America. Seems a bit counter intuitive given that Uganda is the one that needs protecting.

As the same Professor stated, “salvation never comes from overseas”. Therefore, it sounds like it’s time for Uganda and the EAC to invest in itself. If it develops a strong industrial base then it can process the raw materials found in this country, and therefore be able to provide for themselves and sell the resulting products at higher prices. As Obama said, “markets make good servants but bad masters”. Signing this agreement would put the market in the driver’s seat, and Uganda’s development would become a mere footnote on the agenda, instead of the main focus. Uganda has only been independent for roughly 60 years – if it waits about 140 years more, it just might be ready to beat Goliath.
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*Our boss told us she had asked if she could “bring her children along” to the meeting (i.e. me and Jeremy). For a woman without children she is one of the most motherly people I know – especially when it comes to teaching her children lessons. Many a meeting has been punctuated by a teachable moment where she tells us and our co-workers how to chair a meeting, how to secure funding, etc.

** This explanation is essentially trade of dummies. Not because I don’t think you can understand the complexity of trade agreements, but because I don’t. In this case I’m the dummy.

***For a more detailed explanation of FDIs please toodle your way on over to Jeremy’s highly informative blog. He does a great job of explaining it.

****Sitting in Thursday’s meeting and listening to the brilliant people around me defend their country I couldn’t help but feel warm and fuzzy inside. Is it possible to feel patriotic for a country you aren’t from?

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