US-Africa Business Forum Interview Transcript: U.S. business investment and “soft power” in Africa

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US-Africa Business Forum Interview Transcript: Michael Bloomberg, Celtel Interntional’s Mo Ibrahim Talk U.S. business investment and “soft power” in Africa on Bloomberg Television

Aug.5. 2014 — In an interview on the fringes of the U.S.-Africa Business Forum in Washington, Michael Bloomberg, Founder of Bloomberg LP and Bloomberg Philanthropies and Mo Ibrahim, founder of telecommunications company Celtel International BV, spoke with Bloomberg Television’s Hans Nichols about U.S. business investment and “soft power” in Africa, and governance issues and civil society on the continent. The interview first aired on Bloomberg Television’s “Street Smart.”

Watch the interview in full: http://bloom.bg/1nq3bct

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FULL INTERVIEW TRANSCRIPT:

HANS NICHOLS (HN), BLOOMBERG NEWS: I am joined by Mayor Michael Bloomberg, Mr. Mo Ibrahim. Thank you both very much for joining us. It seems like a successful summit. Give us your take. We’ll start with you, Mr. Mayor.

MICHAEL BLOOMBERG (MB), FOUNDER OF BLOOMBERG LP AND BLOOMBERG PHILANTHROPIES: Well the idea is to get the governments of African countries to understand what America has to offer, to get America’s businesses to understand the opportunities in Africa, getting them together. Nobody’s ever put together all of the heads of the African countries in one place and at the same time given businesses the opportunity to really dialogue and make some contacts. I was telling this story before. I sat next to the president of Uganda. He cares about agricultural equipment. On the way out two minutes later, I’m talking with somebody. What do you for a living? He makes agriculturally equipment. I grabbed him and took him over and stuck him down next to – and they were babbling on when I left. It doesn’t matter —

HN: You should get a cut.

MB: I should get a cut. It doesn’t matter whether or not they do a real right then. What happens is later on the company salesman can say to the minister who does the buying or a store that does the buying, I was with your – my boss was with your president. They said we should talk. And when that happens, people do get together. And it’s all about relationships and knowledge.

HN: Well let me – let me get your take on that. Is this an opportunity to really solidify relationships or does more need to be done on the governance side?

MO IBRAHIM (MI), FOUNDER, CELTEL INTERNATIONAL: I think to start with, it is wonderful that this thing happened at last because US really should have done that some years ago. And of course it takes somebody like Mike here to make this happen. You need that kind of drive, business people to come and get this done. So I’m – I’m really delighted with the day. I think it was better than Davos. I don’t like it when – when too many senior people in the room and everybody’s nice to everybody because you don’t get anything done.

We need really intense, frank discussions. And to some extent that was much better than other similar things. It’s better than what happens in China or in France and – and – and similar summits. I’m not party for the other political discussions, so I am not in a position to know what those guys are up to or what they have achieved. But from the business point of view, I think that’s crucial.

MB: And you got to remember, people say China’s there. American investment in Africa is still greater than China. Yes, China’s been spending a lot of time, but China has a policy there. The way they structure it, their government goes and pushes an agenda and tries to get things that are advantageous to China. Nothing wrong with that. The American structure is very different. We try to have individual companies who make individual decisions that are in their individual interests deal and the totality really winds up to be something.

And so from an African country’s point of view, they can’t be dictated to because they have lots of choices, whereas another country, China or somebody else, you take it the way they sell it or you don’t take it at all. And that’s their strategy. Nothing wrong with it, but it’s a different strategy. And I think America’s case is very compelling to African countries. They want to be in business with a successful economy where most people are in the middle class. Some unfortunately are below and some, luckily for them, are above. But the average person in America has done so much better than the average person in let’s say China.

HN: So you’re saying more competition is going to lead to greater growth, but will it lead to lower margins? We talked about this with Mr. Dangote, of course has a strong cement business. Lower margins eventually. Is that going to be ultimately better for the economy?

MB: I think Bloomberg’s a good example. Price is not our first focus. We don’t go out and sell our product as the cheapest. We sell our product as the most valuable to the customer. And in the end, that’s what people want because their businesses have a lot of other factors going in than just the cost of raw materials, lets say, or one service. They want something that’s going to help them build for the long term.

MI: I really just wish to add that what pleased me today is for the – for the first time for some time we see America utilizing its soft power. I always believed in the strength of American soft power. This country has immense influence because of the culture, because of the history, traditions, the way they do things, innovation, the – the free society, the mobility within that society. You have a lot of things which at the end really is what I would call the American soft power.

Somehow for some years you started to believe that your power reside in the drones and the 7th fleet and all this hardware. Not really, that is not really American power. This is soft power, which is important. Africa’s open for you. African people love you. They listen to your music. They – I’m – I’m quite – quite pleased that Bloomberg now launched a platform – TV platform for Africa. I spoke twice actually don’t charge money, by the way.

MB: That’s okay. You were great.

MI: Because I don’t charge money, okay. The – that’s wonderful.

HN: — good follow up. I asked this at the beginning of soft power, but we’ve all been at summits where – and you’ve been now involved in African governance for 40 years. We’ve been at summits where there’s been a lot of frankly positive talk and there’s very little follow through. What needs to happen after the summit?

MB: Well but in this case there will be the follow through because those companies that came, they came to develop relationships to do business. And they go back, and if their salesman aren’t on the next plane over there and making the next phone call, they hear from their boss, sure. And these African countries, when you’re the president of a big country, the ability at the local level really to impact things is somewhat limited, but you’re the convener. You’re the one that provides the access. You’re the one that provides the excuse for these companies to get to those buyers, and those buyers are just as aggressive as are sellers.

And in fact it goes both ways. Life is not so simple that there’s a seller and a buyer. Some things we can sell to him and he can sell other things to us. Sometimes we’re partners together to sell – to sell something to you. Sometimes we’re competitors because you and I have gotten together or you and he have gotten together. Life is much more complex, and that’s the nice thing about having individual companies work things out and structure something based on the particular situation on the ground for that one transaction.

HN: So it’s the commerce. It’s the sales guys. They’re the follow-up calls. They make this into something sustainable.

MB: The evidence that a man of (ph) society doesn’t really work is pretty compelling. The USSR went away. China has become much more capitalistic than it ever was before. If you – the example I gave this morning. America boycotted Cuba. The Cuban people are worse off today than they were 45 years ago. If we had traded with Cuba, the Cuban population would have been overwhelming better. It’s a great location. It would have been great for tourism and that sort of thing, and smart, educated people. And they got nothing out of that and America got nothing out of it.

HN: Yeah. There’s a different view in south Florida. I’m not sure you would necessarily —

MB: I understand that. They just happen to be wrong. The evidence – somebody said that the boycott would get rid of Castro. Yes. It took 45 years and you got his brother. That’s not exactly a proven strategy to work. I don’t know how much you need evidence to show this is a bad idea. I understand people who said they took away my property. They raped, pillaged, murdered. Whatever they did, life goes on. You have to come back and – and look for the future.

MI: Actually from the outside world actually, we love America too much, but sometimes you drive us to – really to (inaudible) we are very surprised (inaudible) Cuba. Is it because Cuba is a communist country, because you don’t like the regime? What about China? Why don’t you boycott China? They are also communist and you don’t like that regime. You (inaudible) so many – I don’t think in this kind of world you achieve anything by pretending some other people do not exist.

MB: That’s right, and it’s another great example. If you remember – you’re too young to remember this, but there used to be a wall right through Berlin, okay? And there were —

HN: I lived 200 meters from that wall.

MB: Okay, and you looked down on it from your TV studio. And there were these two, the world’s greatest armies ever put together, the USSR and the US, okay? And they face each other. They never pull the trigger. They because of mutually assured destruction kept the peace, but what happened? One day the people in East Germany on television saw what the people in West Germany had and they said, we want that. And they walked up to the soldiers and said get out of our way and they ripped the wall down. One of the two greatest armies in the world and they just disappeared. That shows you the power of the public. If they want to do something and it makes sense, they can get it done.

HN: Well that’s the power of the market, the power of the public. You do have to have elections though, and I just spoke with President Paul Kagame. Quick question for you. He said he’s thinking about running for a third year, 2017. He’d be in office more than 14 years. Positive sign for Rwanda?

MI: Rwanda is a difficult question to be honest because there’s a number of issues there. I – I quite admire what our friend President Kagame has done there. Really in terms of development, it’s wonderful. The issue whether he still stand or somebody else will stand is an open question really. I just hope to think that Rwanda is so rich and creative that there’s also more than one Kagame, there are also more great leaders coming out of Kagame – after Kagame. And I hope he makes the right decision there and give an example also for how to move forward.

HN: Today this focus was on commerce, on deals, and I think it’s been a positive story. Is there a danger that some of the governance issues have been swept under the rug, that there’s too much of a premium on chasing profit?

MI: That’s – I totally agree. There’s very scant references to issues of governance, very scant actually during the meeting. By its nature, when you have a meeting and you have 50 presidents sitting there in the room, there is also the niceties of diplomacy and (inaudible) and the last thing you want to do is to lecture to be able to do.

So it’s – it’s rightly so to be left to us in the civil society to raise that issue with American civil society or African civil society because simply we – we don’t have embassies or diplomatic relations or – there is no – I always say I’m unemployed, so nobody can fire me. So I speak my mind, and that’s very liberating. So I think we need to get the right balance there. I would like to see maybe a little bit more civil society involved. Then you can have some issues discussed without the – the – the —

HN: (inaudible)

MI: Yeah. No hectoring. No – no –

MB: Let me look at it from another way. Let’s assume you think that in country X people don’t have the rights and privileges and wealth that you think they should have. You can complain about it. I don’t know what good that does, or you can try to find a way to get them the things that you think they should want, assuming they want it. And the best way I know is to help their economies. People who live in good economies get good government because they get good education. They know how to use the levers of power.

The government has to be responsive to them. And so if we have a country, you can say let’s not trade with them or you can trade with them and the natural hand of the marketplace will I think bring them around. I come back to my example with – with Cuba. We boycotted them. They have a system we don’t think is right. I don’t know if it’s right or wrong for them. That’s up to them to decide. But if we traded with them, it’s hard to believe that they wouldn’t have had a much more robust economy with – with virtually everybody participating.

HN: So this was not the moment. We weren’t soft selling. This summit was not soft selling.

MB: I don’t think it’s the – it’s not the purpose. There’s lots of ways to do things. You can’t do everything in one. And that’s one of the problems with government. We pick a target or an objective, and as we try to do something to achieve that goal we get distracted because we’ve got to get votes from everybody. And pretty soon the thing we’re trying to do has no – bears no relation to the project that – the original intent, and in it’s so diluted even if it did go in the right direction there wouldn’t be enough resources left by the time you get to the end of the chain.

Do you – if a country’s committing genocide, should you do business with them? No, I think not. Sanctions against Russia clearly to my way of thinking is appropriate, but in the end you’re going to go back and deal with Russia. You can’t have one of the biggest countries in the world isolated.

HN: Commerce trumps all. I think the market’s closing. We’re going to go need to pay some bills and toss it over my colleague Pimm Fox. I think we started in Africa. We took a tour. We went to China. We went to Cuba twice, made a stop off in Berlin. I thank you both very much for your time.

Credit: Bloomberg Television courtesy of Africa Practice.

 

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