The Reagan Administration's approach to the economic development of the continent stems from a virtually unquestioned reliance on the African private sector, bolstered by multinational capital. This strategy has been outlined in the Department of State's Current Policy Memorandum, No. 348, based on an address made by Chester A. Crocker, Assistant Secretary for African Affairs, to the United States Council on Foreign Relations on 19 November 1981, when he reminded his audience that the President had stressed the following two points at the Cancun Summit the previous month: freedom to choose, to own property, to work at a job of one's choice, and to invest in a dream for the future is an ingredient vital to economic success;…and individual farmers, laborers, owners, traders and managers are the heart and soul of development.

Disappointed with the development performance of most Third-World countries during the past two decades, many scholars and public officials have looked for a more effective strategy. They are concerned not merely with the extent of growth, but where it has occurred, with evidence that relatively little of the benefits of increased productivity has ‘trickled down’ to the poorer half of the populations of these lands. Capital-intensive methods have raised expectations in both the urban and the rural areas without generating adequate employment opportunities or distributing the benefits of growth equitably. As a consequence, the many poor remain as desperately disadvantaged as they ever were, making a re-evaluation of development priorities, within as well as outside of Africa, of the utmost importance at this juncture.

What, if anything, should be done about the rapidly mounting external debt of African and other Third-World countries? This question, prominent within the agenda of U.N.C.T.A.D. 5, is inseparable from the broader problem of what to do about the structure and performance of the global economy which, based on an international division of labour, puts numerous African countries in a situation where they experience acute and chronic deficits and unfavourable terms of trade. The accumulation of outstanding debt, and the concurrent obligation to meet growing service payments, is the result of that structure and process.

There are ideological, political, and economic incentives for nationalising foreign-based companies which operate in the export sectors of African economies. The basis of this appeal is the expectation that significant positive net benefits will arise from partial or complete acquisition of company assets. The expected gross benefits which serve as the basis for calculation are subject to risk, because national owners often become decision-takers within global markets over which they are constrained from exerting control.

The activities of multi-national companies provide primary sources of economic contact between African countries and the industrialised world. The companies' operations in both resource and product markets are often influenced by impositions made, or not made, by host governments in Africa. Such impositions result from bargaining between governments and companies in which each negotiating agent is intent upon obtaining the most preferred conditions—and these are affected by variables that occupy the central focus of our analysis. First, we outline what we believe are crucial variables that affect bargaining outcomes: i.e. particular patterns of benefits and costs arising from the ways that companies manage their businesses in developing lands. Second, we note particular instances where the critical variables appear to be influential, and explore how closer concentration on these might lead to more preferential outcomes from the viewpoint of African governments.

Recent articles by André Simmons and K. M. Barbour have analysed the various advantages of, and strategies for, regional economic integration in West Africa.1 This note focuses on the technical obstacles of full integration, and then on sub-regional economic co-operation as a more practical alternative.

How can one agree upon an accepted distribution of the benefits from regional economic integration? How could this be implemented among the West African countries ? These are the most difficult and contentious problems associated with forming and operating any customs union and free trade area among the developing countries. If an acceptable distribution of benefits does not come about, then ‘the operation of existing groupings may easily be rendered ineffective or, in extreme cases, they may collapse. The experience of the last few years demonstrates that this is not a remote possibility.’2

A recent article in this Journal, X, I, May 1972, by Robert E. Miller and Peter R. Carter on ‘A Cost-Benefit Analysis of Liberia’, examined the general cost pattern inherent in concession agreements based upon her ‘Open-Door Policy’, and noted that ‘officials of the Government of Liberia who are responsible for negotiating foreign concessionaire agreements… now recognise this pattern and hopefully plan better bargains in the future’. I wish to focus attention on Liberia's external debts, a particular cost largely resulting from that policy.

The Generalized System of Preference is composed of various schemes under which donor countries, or regions, offer non-reciprocal and general tariff reductions on the imports of semi-manufactured and manufactured goods from developing countries. The G.S.P. differs from preferences previously granted to African countries by European nations in two ways: first, the preferences granted relate to a broad range of articles rather than relating to specific primary commodities; and secondly, they are non-reciprocal and do not bind developing countries to grant trade preferences on selected imported goods in order to receive them on some of the commodities and food-stuffs that they export.