U.S. Department of the Treasury

(Archived Content)

FROM THE OFFICE OF PUBLIC AFFAIRS

I am very happy to be here to keynote this Conference, which provides us with the opportunity to explore groundbreaking trade and investment opportunities in North Africa. It is a part of our efforts pursuant to the U.S.-North African Economic Partnership to bolster the relationship between our countries. I hope all the participants from the U.S. and North Africa will come away with new investment plans and a better understanding of how to take advantage of the myriad opportunities the Maghreb region offers.

I want to especially commend the U.S. Trade and Development Administration for the energy and initiative it has shown in organizing this Conference. My good friend Joe Grandmaison and his team, with the assistance of the State Department, worked extremely hard over many weeks to make sure all of you will have the greatest possible opportunity to exchange information about the projects the Maghreb is undertaking and about the experience and credentials of the American firms that may be interested in participating.

We are very honored to have with us Ambassador Jazeiry, Ambassador Atallah and Ambassador el-Maaroufi. Their presence shows the importance the Maghreb nations place on sound, market-based economic development, on foreign investment and on this Conference as a vehicle for meeting these goals.

I want to extend a special welcome to those of you who have come here from North Africa and express my admiration for the work you are doing. You are engaged in nation building, in the best sense of the term. The projects you are undertaking--power grids and ports, telecommunications facilities and industrial parks, utilities and petrochemical projects-- are the sinew and muscle of a successful economy.

I have long advocated closer U.S. commercial ties with the Maghreb region. As Under Secretary of State in 1998, I proposed the US-North Africa Economic Partnership as a means to refocus our attention on this critically important region of the world. In my visits to each of the countries in our Partnership, I have been struck by the desire of business people and government officials, both in the Maghreb and here in the United States, to expand our trade and investment links. I am also impressed by the pace and range of economic reforms that countries in the region had planned or implemented. The Partnership was created to help broaden the range of economic relations and forge closer commercial links between the US and the Maghreb.

There is also another, equally important focus of the Partnership: to encourage regional trade and investment. Morocco, Algeria and Tunisia together comprise an 80 million-person market with a combined GDP of $137 billion. There is great potential for trade in the region in the agriculture sector, service industries, regional tourism, and the energy sector. To reach their full potential, it is critical that intra-regional barriers to trade and investment be reduced. This will enhance your own economic activities, and will encourage foreign companies to serve the North African market from the Maghreb countries instead of from elsewhere.

A number of senior U.S. Government officials have visited each of the Maghreb nations and engaged in high level policy dialogue aimed at promoting economic reform and liberalization. Since its inception, the Partnership has hosted two Ministerial-level meetings with the Maghreb countries and formed a Steering Committee, consisting of the three Ambassadors who are here today to work with senior officials of our government to monitor progress toward economic reform. This is a cornerstone of the Partnership: serious and frank dialogue between senior government officials to help put in place the right kinds of economic policies that will contribute to sustainable economic development, broader trade and investment, and closer economic cooperation. Our discussions with senior officials in the region have resulted in specific programs on the ground, all aimed at improving the Maghreb's investment climate and the region's longer term macroeconomic policies.

Many of the projects you will be discussing this week were developed through feasibility studies and other project planning services provided by our Trade and Development Agency. The US Agency for International Development is in the process of linking Morocco, Algeria and Tunisia to potential US investors through its groundbreaking Global Technology Network. Our Treasury Department is providing technical advice on debt management and has plans for providing technical assistance on further financial sector reform. The Department of Commerce is helping the region develop, establish and strengthen investment regulations through the Commercial Law Development Program. The Office of United States Trade Representative, as some of you know, is meeting this week with senior Moroccan officials on the Trade and Investment Framework agreement. There are many other examples of the kinds of targeted programs we are planning or have on the ground in the region to promote opportunities for foreign investors and higher standards of living for the Maghreb's people.

This Conference offers a unique and historic opportunity for the Maghreb region to showcase a wide range of investment opportunities for US companies. The projects you will learn about over the next two days have been carefully selected to offer maximum opportunities for investors in some of the most promising sectors. Power grids and ports, telecommunications facilities and industrial parks, utilities and petrochemical projects are just a few. As these projects are implemented, the region will grow to accommodate even more economic activity, expand employment, compete in world markets, improve social services and offer better standards of living. This will create a virtuous circle that will lead to still higher levels of trade, investment and employment opportunity.

This Conference and the U.S.-North Africa Economic Partnership underscore the U.S. commitment to this important region. Our policy is based on helping the Maghreb help itself through sustainable economic policies, market-based initiatives, and increased U.S. business investment that will help create growth, prosperity and employment for the people of the Maghreb. This Conference provides a concrete manifestation of that policy.

I hope investors here today will give careful consideration to the trade and investment opportunities that will be on display over the next few days. I have seen firsthand the Mahgreb countries and each of them is committed to making themselves more attractive places for investment. They are working to take advantage of the benefits and opportunities of the information age. They want very strongly to become part of the New World economy. They have projects planned to bring their telecom facilities into the 21 ^st century, supply their economies with adequate power, build new industrial areas, modernize their transportation facilities and their agriculture, and deal with the inevitable environmental problems of an expanding population. Each country, as you will see, has sophisticated planners and talented and visionary business people and government officials who have given much time and effort to the design of the projects that will be presented here this week.

I would like to conclude with some general observations on development that apply to the Maghreb as well as other areas of the world. Experience shows that market-based economic systems provide the best environment for creating jobs, generating economic activity and raising living standards. But markets themselves do not necessarily create the conditions needed for them to function well. When it comes to generating investment by developing a skilled work force, maintaining sound macroeconomic policies, managing national debt, providing full and accurate information for private investment decisions and protecting intellectual property rights, government activity is needed for markets to produce the best results.

Investment capital most often flows to those countries that offer a conducive investment climate - a predictable and transparent regulatory system, a vibrant and independent private sector, an established infrastructure to support new business ventures, and educated workforce, and physical proximity to other buoyant markets. A business friendly environment is created by forward looking governments that plan and then enact the necessary reforms-sometimes painful and politically unpopular ones - to lay the groundwork for sustained growth. This involves reforming and reducing the role of the state in the economy, liberalizing the trade system by lowering tariffs and other barriers, and investing in a country's human capital through increased spending on education and health care.

Moreover, the deep-seated reforms required of developing countries sometimes cause changes that could result, in some short-term dislocation, even when the longer-term results will be higher sustained growth and lower unemployment. If the people of a country are to be expected to accept these, they must have some confidence that a social safety net is in place to help them weather the transition and manage the risks of a market economy. Social programs should be aimed at developing human capital, so that people have the skills to change occupations and make other adjustments. They should also be directed toward alleviating substandard living conditions. Economic reform cannot just show up in statistics. People must be able to see the change in their job opportunities and the conditions of daily life. So there is an important role for government in creating the kind of conditions that encourage, in the broadest sense, the foreign investment the Maghreb nations need and seek.

I believe that, with all the work that has gone into the preparation of this Conference, it will be a valuable experience for all participants. I hope it will also result in business people from the US and North Africa working together on projects that will foster economic growth and development in the Maghreb region and continue to strengthen the bilateral relationships that have been fostered through the US-North Africa Economic Partnership. Good luck in your endeavors over the next few days.

Thank you very much.