FROM THE OFFICE OF PUBLIC AFFAIRS

It is a pleasure to speak to youtoday, especially those who have traveled from Africa. TheCorporate Council on Africa and this conference can play a keyrole in what I believe is the best avenue for fostering economicgrowth in Africa and integrating Africa into the global economy:developing private sector activity. And all of you, and theinstitutions you represent, whether an African nation, abusiness, or a development institution, have critical roles toplay to achieve that objective.

Africa’s growth andprosperity can be viewed as a moral imperative, but even leavingthis aside, while Africa’s growth and prosperity certainlyis in Africa’s interest, it is also very much inAmerica’s interest. A critical challenge for those in thiscountry who recognize this identity of interest is to build amongtheir fellow Americans a better understanding of the numerousdimensions of that identity of interest. A growing and dynamicAfrica --an Africa committed to democracy, economic reform,sustainable development, and investing in human capital --willprovide higher standards of living for its people and be morestable politically and socially. That, in turn, will presentAmerican businesses and workers with new opportunities to expandtrade, create jobs and increase standards of living in thiscountry, and will strengthen our national security, as stabilityin any part of the globe contributes to our national security.Furthermore, the environmental conditions of Africa affect theenvironmental conditions in our country, and the healthconditions in Africa affect health conditions in the UnitedStates. In an era marked by true global interdependence, oureconomic success, our national security, our environmentalprotection, and our health are linked to a successfulinternational economy, international political stability,effective environmental protection and health care throughout theglobe. And, in my view, this is a perspective which the greatpreponderance of Americans must come to share to provide supportfor the forward looking international economic policies criticalto our future. Moreover, all of that is very much dependent onpromoting economic growth in developing nations.

And that has been a remarkablestory during the past two or three decades, which has seendynamic economic growth of a large number of developing nationsaround the globe that have reformed their economies. Oneobjective now shall be to work together for all the nations ofAfrica to join this march toward global prosperity.

Too many Americans perceiveAfrica as a continent beset by war, famine and environmentaldevastation. And there are real problems with illiteracy,overpopulation, poverty and health care.

Africa faces immense challenges--but Africa also offers equally great potential. And there has,in fact, been real progress in many nations in Africa and it isvery important that this have an appropriate weight in the publicimage of Africa in this country. The end of the Cold War hasfundamentally changed the economic and political landscape forSub-Saharan Africa. Democracy has started to take root --since1990, 25 African nations have held free and fair elections.Market reforms have also taken hold, and in response theregion’s annual average growth rate has risen from 1.4percent over the period of 1991 to 1994, to 4 percent in 1995.Some countries such as Senegal, Ghana, Ethiopia, and Coted’Ivoire have growth rates in the 5 to 7 percent range,while a very few, like Uganda, grew by 10 percent. But there isan enormous amount to do for Africa to achieve its potential andjoin the economic mainstream.

I believe we now have aheightened focus and a new perspective on Africa in theAdministration and by many members of Congress. As the late RonBrown --the man who inspired us all in the Administration by hispassion and optimism for Africa --recognized, we must takeAmerica’s economic ties with Sub-Saharan Africa beyond theera of simply assisting nations in need. While well-targeted aidis essential, it cannot make up for bad polices. We must form newmutually beneficial relationships through trade and investment tofoster private sector led growth. African nations must beintegrated into the global economy and the United States cancontribute greatly to that effort. If we seize this opportunity,all of us --Americans and Africans --will reap the benefits. Wemust then ask what we can do to help those countries that are onthe reform path.

In that context, let me suggestsome conclusions we have reached with respect to what has workedfor developing countries in other parts of the world over recentdecades, in countries that are transitional from communistregimes, and seems to be working for some countries in Africatoday.

First, the key to prosperity isto unleash the power of private sector led growth. Developingcountries or transitional economies from Asia to Latin America toCentral and Eastern Europe have fueled dynamic economic growth bypromoting private sector activity, not by preserving inefficientstate run industries.

Second, solid macroeconomicconditions and other sound economic reforms are key to attractingforeign private sector capital. There has been a vast increase inthe flow of private sector capital to developing and transitionalcountries, but in today’s competitive global economy,investors --from foreign corporate direct investors to portfolioinvestors --have countless choices of where to invest and theystrongly favor those countries with sound market-based economicconditions: that is, fiscal discipline; a flexible exchange rate;effective banking system; and countries that have put in placesound and fair legal systems, with effective enforcementmechanisms.

Third, openness to the globaleconomy can also contribute greatly to prosperity. Closed marketsprotect economic inefficiencies that lead to high prices andinferior goods and successful developing countries are moving toreduce barriers to trade and to integrate themselves into theglobal marketplace. The countries of the Southern AfricaDevelopment Community, and others in the Sub-Saharan region, arebeginning to move toward trade openness that can bring newefficiencies, new investments, new technologies, and access tonew markets for their own exports.

Fourth, when you look ateconomically successful developed and developing nations, perhapsthe single most important factor is a firm commitment toinvestment in a nation’s greatest resource, its people, byimproving education and health care.

Finally, democracy not only givescitizens a voice in their own government, with all thenon-economic benefits which flow from that, it also contributesgreatly to economic growth by fostering transparency,accountability and the rule of law --conditions which increaseinvestor confidence and reduce corruption.

Having focused on Africa, let meturn to the United States and what we need to do to support thereform efforts of African nations and Africa’s economicgrowth. Let me suggest a number of steps we can take:

First, we must fully fund ourcommitments to international organizations such as the WorldBank, the IMF, the African Development Bank and the UnitedNations to do our fair share and to maintain our leadership inshaping the global economy. In no other part of the world arethese institutions more important than Africa. It is also veryimportant that the World Bank and the IMF look closely at theirprograms in Africa to make sure that they are working and aresupporting Africa’s boldest reformers. More generally, theseinstitutions have their problems, but they are working to addressthose problems. And our ability to continue pushing to affectchange in these institutions will be greatly limited if wedon’t pay what we owe.

Second, we must continue toprovide leadership to relieve unsustainable levels of debt.Africa’s debt burden is now almost as large as its totalG.D.P. --the result of a lot of mistakes made by too manycountries and by too many lenders. For countries that arecommitted to reform, it is important to relieve this debt,especially because that then frees up resources to invest inpeople. The United States has been a strong supporter ofbilateral debt relief and through the initiative for the HeavilyIndebted Poor Countries, or HIPC, and we will continue to do so.But I repeat, the benefits of debt relief should go to thosecountries that are on an effective reform path. Already anagreement has been reached in principle for Uganda to qualify fordebt relief through the HIPC program and we expect decisions tobe taken soon for several other countries.

Third, just as it is in theinterest of African countries to open their markets to worldtrade, so too must we work to maintain the United States’traditional openness to trade. Indeed, we will be discussing withCongress how we can open our markets to African trade evenfurther. We would hope that our allies and trading partners wouldtake similar steps.

Fourth, we should utilize to thefullest extent we can the agencies and programs we already haveestablished to promote trade and investment, such as theExport-Import Bank, the Overseas Private Investment Corporation,and the Trade Development Agency. It should be possible to devisemore imaginative ways of stimulating trade and investment betweenthe United States and Africa.

Finally, we need to establish amore direct and more systematic policy dialogue with Africanreformers to learn directly from each other what works and whatdoesn’t. Vice President Gore has set the example with theU.S.-South Africa Binational Commission he co-chairs with DeputyPresident Mbeki. I know that many of my Cabinet colleagues wouldlike to build on that example. Relatedly, I think the FirstLady’s recent trip to Africa gave Americans a heightenedfocus on Africa and a balanced view of Africa’s problems,accomplishments and potential. Just last week, Deputy SecretarySummers and I sat down with the First Lady to get the benefit ofher observations and insights. I know she is looking forward toaddressing you tonight.

I believe we must move forward inall of these areas to promote growth in Africa. By workingtogether, each of us accepting our respective responsibilities,we can enter a new era of prosperity for Africa for the benefitof both Africa and the United States. Thank you very much.