The Private Sector Driving Growth

[As prepared]

Thank you very much, Lloyd, for your introduction. It is a tremendous personal pleasure to address this distinguished audience of Sub-Saharan Africa's Ministers of Foreign Affairs, Trade, Finance and Agriculture; African and U.S. Ambassadors; members of the U.S. and African private sector and civil society; and other invited guests and officials of the U.S. Government.

I would like to extend my personal thanks to the Secretary of State, Condoleezza Rice and Foreign Minister Gadio of Senegal, for opening this Fifth African Growth and Opportunity Act (AGOA) Forum.

I am also pleased today to share the stage with Professor Firmino Mucavele, an accomplished economist who - as head of the New Partnership for Africa's Development - shares my vision of what foreign assistance must be all about. One of NEPAD's primary objectives is to place African countries, both individually and collectively, on a path of sustainable growth and development.

As we begin this year's forum, I am reminded of Minister Gadio's words on the last day of the Fourth AGOA Forum in Senegal last summer. Noting the United States' commitment to Africa in programs like AGOA, the Millennium Challenge Account, the President's Emergency Plan for AIDS Relief, and the President's Malaria Initiative, he said "if we have called President Clinton the first American-African President, we could call President Bush now, 'President Bush, the African.'"

I feel enormously privileged that three years ago, President Bush asked me to come to Washington to lead the development, and implementation of his extraordinary $15 billion Emergency Plan for AIDS Relief. As Secretary Rice noted, the Emergency Plan has had enormous success in rapidly increasing access to antiretroviral drugs to combat AIDS. Critical to that success, however, has been our approach to the delivery of HIV/AIDS assistance-an approach focused on partnership with host governments and citizens in the countries we seek to assist, sustainability, and results. It represents a much-needed paradigm shift in the delivery of U.S. foreign aid, one also reflected in the creation and implementation of the Millennium Challenge Corporation.

In my new role as this nation's first Director of U.S. Foreign Assistance and Administrator of the U.S. Agency for International Development (USAID), I look forward to working in partnership with the governments and citizens of Africa in implementing this approach across all of our U.S. Government foreign assistance.

The amount the United States spends on foreign assistance has risen significantly under this Administration. Our commitment to Africa is one reason. In 2000, the U.S. provided $1.1 billion in assistance to sub-Saharan Africa. In 2006, we will provide $3.3 billion. But even these significant increases pale in comparison to what can be achieved-sustainably-through private enterprise and individual ingenuity.

Looking back after more than 50 years, some aspects of U.S. foreign assistance have fostered permanent, and in some cases profound, positive changes in developing countries. This has occurred particularly when our partners were strong leaders with vision.

At the same time, some of the best plans for short-term benefit have not led to permanent change that lifts people out of poverty, and unleashes enterprise that creates jobs and builds wealth. This is because a crucial element of the overall equation in helping people help themselves - one too often overlooked - is the role of host governments.

Much of what has been done historically, under the rubric of international development, has mostly had the character of short-term charity. The international system, including donors like the United States, have stepped in to address citizen's basic needs-for food, or health care, or education. Often, donors created parallel systems of service delivery that shifted citizens' expectations away from their own governments to international donors. While the international donor community has an important transitional role to play, outsiders cannot, with sustainability, secure citizens' health and safety, educate a critical mass, or create the conditions needed for economic growth-all of which are necessary for development. Those are responsibilities only governments can fulfill.

As President Bush has said, our development assistance must engender lasting economic, social, and political progress through a transformation of institutions, economic structures and human capacity so that nations can evolve to sustaining further progress on their own. In Africa, as in the rest of the world, the primary responsibility for achieving this transformation rests with the leadership and citizens of the developing nations themselves.

The assistance and policies of the United States can and must play a vital and catalytic role. But in the assistance we provide as a U.S. Government, we know that it is not about us, it's about you.

My friend, Dr. Peter Mugyenyi, is the leader of the Joint Clinical Research Center in Uganda. He's one of the most inspiring, creative and effective leaders in the fight against HIV/AIDS on the African continent.

At a meeting in Ethiopia last year, Dr. Mugyenyi made a comment that really struck me. To paraphrase, he said that it is neither practical nor moral for the people of Africa to expect that the rest of the world will take care of their problems forever.

He explained that it is not practical because it means their own destiny will be at the mercy of changing political priorities in nations far beyond their control.

And it is not moral, he said, because the people of his continent have many of the tools t hey need to meet their own needs, and those they do not have they can and must develop.

There was a murmur of agreement in the largely African audience. They understood that too.

Dr. Mugyenyi has made incredible progress through his own organization in making drug treatment available in Uganda.

In one largely rural district, his organization has now succeeded in providing access to antiretroviral therapy to 100% of those who need it, with a locally-designed strategy they can sustain in the future.

To be clear, for now Dr. Mugyenyi is working in close partnership with the President's Emergency Plan For AIDS Relief, utilizing the extensive financial support we are providing.

Indeed, at this point, our support is indispensable.

But he is already developing capabilities and resources so that a time will come when he will no longer depend on us.

We didn't tell him to do that; he totally understands what's required for the long-term sustainability of his very important work.

When it comes to economic development, President Bush has said, "The role of government is not to try to create wealth … The role of government is to create an environment in which people are willing to risk capital, to take risks; an environment in which people are willing to realize their dreams."

Three years ago, one African, Ms. Caroline Kendem-Sack, took a risk and founded Brodwell - building on a family business her mother started more than 30 years ago. With assistance from the United States through the West Africa Global Competitiveness Hub, Ms. Kendem-Sack expanded her business of exporting swimsuits and lingerie to France, quadrupling her factory space and more than doubling her workforce by manufacturing medical scrubs for the U.S. market. In addition, she was honored in 2004 by the U.S. apparel industry for establishing an innovative workforce development program that included HIV/AIDS prevention and treatment.

People like Ms. Kendem-Sack are key to successful economic development. But her efforts are supported by open trade; transparent governments; democratic and economically sound approaches to addressing the needs of citizens and supporting their aspirations; and a vibrant private sector not constrained by excessive burdens and regulations, but spurred on by Government's actions to implement pro-economic growth policies.

It is important for African governments to set the stage for their private sector players to succeed. The most powerful locomotive in the world cannot move an inch unless its tracks rest on a firm foundation. Governments must provide the strong, predictable foundation for private sector development.

As countries that have qualified for AGOA, you meet the requirements for trade preferences with the United States. But, qualifying for AGOA benefits is just the start of a long-term partnership that looks toward a number of goals.

This partnership is formalized in the Presidential African Global Competitiveness Initiative, which includes five key elements. The first is further modernization of African trade regimes and business policies, and then development of pro-growth laws and regulations. The second is strengthening of capacity in the private sector. The third is promoting citizen involvement in a transparent rule-making process. The fourth is working with the financial sector to increase access to finance. Lastly, the initiative calls for accelerating investments in critically needed infrastructure that promotes growth.

Since our last meeting, our commitment to helping Africa create the conditions for economic growth has deepened. The United States supported the launch of a fourth African Global Competitiveness Hub in Dakar, Senegal, in November 2005. One month earlier, the United States sponsored the first of four regional workshops to accelerate trade in Ethiopia.

We are expanding the work of the four regional African Global Competitiveness Hubs to strengthen private sector trade and promote access to finance for the African private sector. In addition, we are continuing our assistance for developing sanitary and phytosanitary systems that provide the means for you to export your agricultural products to the United States.

We will be launching a new focus on leveraging infrastructure investments in roads, energy, ports, and information and communication technology. We are also exploring opportunities to address measures that protect Africa's intellectual property rights, and we will continue to partner with African leaders who are addressing business environment reform.

The U.S. will continue to push for international assistance, both bilateral and multilateral, to help Sub-Saharan countries realize their potential. At the same time, Sub-Saharan Africa must take concrete steps toward addressing their local environments for promoting regional and international business development.

We will support your reforms, and we will work with you as partners. Working together, we can make a difference in delivering a better future for children, and their mothers and fathers, across Africa.

Thank you very much.