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Chairman Hyde, Ranking Member Lantos, and Members of the Committee, thank you for inviting me to talk to you today about my recent trip to Africa, and the President’s initiatives to improve conditions in the developing world.
I went to Africa last month to listen and learn; to meet African leaders in and out of government, to meet doctors, farmers, teachers, students, and entrepreneurs. I went to hear their insights into the obstacles to Africa's prosperity.
I also went to find a real-world basis for recommendations to the President on how to allocate funds from the new Millennium Challenge Account. But most of all, I went with an open mind, and one pivotal question: How can the people of the United States and the developed world best help Africans and their elected leaders achieve prosperity at last?
I learned a great deal, and I want to share some of my experience with the Members of the Committee.
I have to say these were the most intense twelve days I’ve ever experienced. I met people like Sister Benedicta, who runs a hospital and orphanage in Ethiopia. She maintained an incredible radiance, even as she told us how many people die in her hospital every day – how many children die in her hospital every day. To witness that strength of spirit is a truly profound experience.
This trip confirmed three things for me. First, a truth we’ve always known: All people everywhere can do great things when they are given the tools and incentives for success. Second, that with leadership – honest, accountable, and committed to progress – everything is possible. Without leadership, nothing is possible. And finally, that in the right environment – focused on growth, enterprise and human development – aid works. Knowing that it can work, we have a moral duty to demand as much. Assistance should make a real difference in people’s lives.
We in the developed world must support African leaders who are creating the conditions for success – ruling justly, encouraging economic freedom, and investing in their people. And we must ourselves take a leadership role in demanding results.
In Africa, I saw signs of progress everywhere. Programs are working, aid is helping, and standards of living are improving. But there is a long way to go. The progress I saw deserves praise, but it just isn’t enough.
Let me highlight the areas in which we witnessed progress. In particular, I saw three kinds of investments in people that are vital to realizing Africa’s potential: clean water, primary education, and fighting HIV/AIDS.
Clean water is, surely, one of the most essential elements of a dignified, civilized life. No aspect of infrastructure is more basic. Yet 45% of sub-Saharan Africans lack access to clean, safe water. That’s about 300 million people – more than the total population of the United States. In Ethiopia, that figure is 78%, or 50 million people in that country alone.
One insight from my Africa tour is that local leaders, with some engineering and financial support, could develop clean water sources for their towns and villages fairly quickly. For example, in one Ugandan village I saw a concrete basin installed to protect a natural spring. The women of the village could collect the water directly from the basin instead of collecting it after it spilled across the muddy ground. The concrete basin cost a thousand dollars to install.
But the local chairman for the project told me that the greatest hindrance to installing the system had been local fears that a snake was protecting the spring, and that the snake would become enraged by any tampering and would take away the water. He had to spend considerable time persuading his fellow villagers to go ahead with the project. It took his leadership to get the project finished.
Or consider another village, where women were trekking to a muddy river to obtain water, even after a well was dug in the village. After the well was built, the women wouldn’t use it. It turns out that they valued their social time down by the river, and so they chose to continue collecting dirty water from the river, rather than clean water from the well. When the water tap was relocated further from the village, providing an opportunity to socialize, they started to use it.
In these and other cases, only local leadership could tailor development projects to suit local customs and culture. And it was sometimes shocking to see the disconnect between the aid bureaucracies with their grand, expensive, multi-year plans and the availability of more immediate, practical solutions. It made me wonder how much was going to aid, and how much to bureaucracy.
Compounding the problem are the changing demographics in Africa, especially the fast growing urban populations. Africa’s urban infrastructure, including water and sanitation systems, is antiquated and overextended.
If we can figure out a way to support African leaders in bringing local solutions for clean water to their nations – and I think we can do that much faster and cheaper than the endless studies say we can – we can liberate hundreds of millions of people, especially women and children, from preventable, debilitating illness and meaningless, wearisome labor. They would be free to pursue their dreams for a better life.
The second important investment I saw was in raising primary education enrollment. I believe that in Africa, in the United States, and in every part of the world, children by the age of about ten years old should and can have the tools to be life-long learners. But that requires that they get into schools at an early age, and stay in school, with well-trained teachers and adequate materials.
In Uganda, they’ve had tremendous success increasing primary school enrollment. Primary school enrollment has increased from about half (55%) of the children in 1994 to nearly all of them (94%) in 1999, and nearly half the students are girls. Education quality is improving as well. But there is still a long way to go. I visited schools where they have gone from a ratio of 16 students per book down to six per book. That’s progress, but it’s not good enough. We must set our expectations higher. Surely, we can get every student his or her own book.
That is why President Bush committed last week to doubling funds for the African Education Initiative, which was first announced last July. This will raise our total spending on the initiative to $200 million over the next 5 years. The program will train more teachers, provide scholarships for girls – who are disproportionately excluded from schooling today – and work with historically Black colleges in the U.S. to supply millions more books to African children. It will also promote accountability and transparency in the school systems, so that communities can ensure that all the funds that are supposed to reach teachers and children are really reaching them.
The third, perhaps most crucial area for investment in people is health care. Nowhere is this more urgent, and more heartbreaking, than in the struggle against AIDS. In South Africa I saw mothers with AIDS caring for babies with AIDS, even when proven, inexpensive drugs are available to stop transmission between mother and child. I saw the dedication of nurses and doctors treating people with AIDS, and their patients’ struggle to survive.
Prevention of further HIV contagion is the utmost priority, especially to keep the next generation of newborns free from disease.
The President has therefore stated his intention to provide $500 million in funding for the International Mother and Child HIV Prevention Initiative. This initiative will increase our commitment to preventing infant HIV infection abroad by almost $200 million next year alone, up from less than $20 million last year. It will increase another 50% in 2004. We will start with the hardest-hit countries in Africa and the Caribbean, and expand the program as it shows progress.
In addition to promoting nevirapine dosing at birth, which can reduce mother-to-child HIV transmission by up to 50 percent, the President’s initiative will introduce more advanced combination antiretroviral therapy and best-practice postnatal care where local healthcare infrastructure permits. At least as important, it will improve healthcare training and delivery systems throughout the affected regions, bringing public and private resources to bear.
This is our challenge: to focus the attention of the world on getting results. Caring greatly is not enough. We must also succeed greatly.
Providing the framework for basic health and education is fundamental for enabling people to realize their potential. When governments are investing in their people, providing clean water, education, and health care, and when the other aspects of good governance are present – just rule and economic freedom – prosperity can blossom.
In fact, the private sector is already growing in parts of Africa. I visited entrepreneurs who are grabbing the opportunities that good governance has made possible. They are creating jobs in industries from coffee and cut flowers to athletic wear and data processing.
Government provides the conditions for growth, but it is not the source of prosperity. Private citizens create prosperity through enterprise.
And in Africa, where the conditions are right, citizens are doing just that.
For example, in Ghana I visited a successful U.S. investment, called Affiliated Computer Services, Inc. ACS sells data processing services to insurance companies in the U.S. It opened its office there in 2000, and already it employs over 800 Ghanaians, paying an average of three times the average wage in Ghana. 80% of the employees are women. The company now plans to expand its operations to four new sites in Ghana and to increase its workforce to over 1,000 people.
As foreign investments like ACS show success, others are bound to follow, and I am optimistic that increasingly advanced services, such as software development, will thrive in Ghana and elsewhere in Africa.
In Uganda, I met a woman, Lukia Ssemonobe, who opened a restaurant with micro-loan funding and a lot of hard work. This woman lost her husband a dozen years ago, and had to feed four children without income.
Indomitable, she borrowed $50 from the local branch of a micro-finance NGO, and used that and subsequent loans to build two businesses – a restaurant and then a tailoring shop. Now she employs about a dozen of her neighbors, supports her family, owns a home, and has become a leader in the community, caring for AIDS orphans.
In Ethiopia, an entrepreneur from Chicago invested in building a garment factory that makes sports clothes and ships them to the U.S. under the Africa Growth and Opportunity Act. The company now employs about 200 workers, each earning between three and 21 times the average Ethiopian income.
Jobs that deliver prosperity are created one at a time, by people like Lukia, or the investors in ACS. They see opportunities and choose to take the risks, confident they will reap the rewards of success.
Unfortunately, in too many cases, potential entrepreneurs and investors in Africa are deterred by arbitrary laws, corrupt bureaucracies and government favoritism. Africa is a continent of entrepreneurial enthusiasm – that’s what I saw. But these individuals have no chance for success without governments that fairly enforce laws and contracts, respect human rights and property, and fight corruption. Governments also must remove barriers to trade – both internal and external – and open their economies to investment. They must allow companies and entrepreneurs to compete without excessive interference, including interference from government-owned enterprises.
That’s no small order. But as private sector production takes hold in Africa, and incomes rise, African growth will become self-sustaining. Africa will be its own best market.
Coming back to my original question, what can we in the U.S. do to support African success? In addition to supporting President Bush’s new initiatives for stopping the spread of HIV and broadening access to education in Africa, we need to push ahead with the rest of his reform agenda, which includes restructuring, increasing, and improving the effectiveness of wealthy nations’ support for African development.
On March 14, 2002 President Bush announced that the United States will increase its core assistance to developing countries by 50% over the next 3 years, resulting in a $5 billion annual increase over current levels by FY 2006. This increased assistance will go to a new Millennium Challenge Account that funds initiatives to improve the economies and standards of living in qualified developing countries. The goal of the Millennium Challenge Account is to reward sound policy decisions that support economic growth and reduce poverty.
The Millennium Challenge Account recognizes that economic development assistance can be successful only if it is linked to sound policies in developing countries. The President therefore instructed Secretary of State Colin Powell and myself to develop a set of clear, concrete, and objective criteria for measuring progress in three key areas: ruling justly, investing in people and encouraging economic freedom.
Treasury has been working with State and an interagency group to investigate options for criteria and country selection.
The same policies that make a country eligible for Millennium Challenge grants will also make other official aid more effective. We are not setting out to pile one more program on the layers already present. We aim to improve them all, and streamline the aid process wherever we can. Too many of the responsible developing countries already labor under the demands of countless bilateral, multilateral and NGO aid bureaucracies. These organizations mean well, but poor countries end up consuming a large part of their aid allocations – and then some – just trying to qualify for the next helping. Sometimes it seems that more money goes to administration than assistance.
Also, international donors have sometimes knowingly made loans to poor countries for programs that could never generate a return sufficient to pay back the principal and interest due. The reality is that essential investments in sectors such as education and health care – investments in people – cannot directly generate the incremental revenue to service new debt. Of course, in many other cases, loans simply financed corrupt leaders, who stole the money and left their impoverished citizens saddled with the debt.
As a result, many caring people now extol debt forgiveness as the path to African development. I would agree that debt forgiveness may help, but it alone is not the solution.
First, debt forgiveness solves nothing if we allow new debt to create the next generation of heavily indebted poor countries a decade from now. To prevent this situation in the future, President Bush proposed a year ago that up to 50 percent of the multilateral development funds to the poorest countries be provided as grants instead of loans. President Bush’s proposal led to intensive discussions with our development partners, and the principle of substantial grant financing for the poorest countries will be embodied in an agreement among the donors to the thirteenth replenishment of the International Development Association (IDA-13). African nations will be the largest beneficiaries of this initiative, under which all financing to the poorest countries for HIV/AIDS, and nearly all for other key social sectors, will be provided with grants.
The United States is also increasing its financial contribution to IDA-13 and to the replenishment of the African Development Fund by 18 percent. IDA programs need only show they are making a difference in people’s lives to receive a portion of these additional funds – a challenge development organizations, their supporters, and their beneficiaries should welcome.
Replacing loans with targeted grants will eliminate the need for governments to repay long-term investments in people. It will thereby help eliminate the next generation of debt service problems. It is time to end the sad cycle of indebtedness for countries committed to success.
But it is also a simple fact that even without debt, it is impossible to prosper without income. Even if we forgave all debts, many of these countries still could not fund their own budgets, and they would immediately have to borrow more. In Uganda, over half of the government budget comes from foreign aid. Half the budget! That is not a sustainable situation. The only way out of that kind of shortfall is internal economic growth. Local leaders must create the conditions for self-sustaining prosperity, not further dependency.
In the long-term, domestic entrepreneurship as well as trade and foreign investment are far more important for economic growth than official aid. The purpose of aid is to speed the transition to economic independence. But we are using other mechanisms to help as well. For example, the United States created the Africa Growth and Opportunity Act to open U.S. markets to exports from sub-Saharan Africa. As Uganda’s President Museveni said "If somebody buys what Uganda produces, then he is rendering my country the best assistance possible."
The Africa I saw on my journey is already changing. And we in America stand ready to help, eager and impatient to support real improvement in the lives of the African people.
I believe this: with the right combination of aid and accountability – from both rich nations and poor ones – we can accelerate the spread of clean water, education, and healthcare throughout Africa. We can help the African people create vibrant, self-sustaining economies founded on private enterprise, which will generate a rising standard of living.
With the support of the Members of this Committee, and the United States Congress, we can help Africa achieve prosperity at last. Not in the next generation, but right now. In this era of global opportunity, no continent, no country, and no person should be left behind. President Bush said it best – there are no second class citizens in the human race. We must make his vision into a worldwide reality.
Thank you.