[Senate Hearing 109-203]
[From the U.S. Government Publishing Office]
S. Hrg. 109-203
THE COMMISSION FOR AFRICA: RECOMMENDATIONS FOR A COHERENT STRATEGY FOR
AFRICA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
MAY 17, 2005
__________
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COMMITTEE ON FOREIGN RELATIONS
RICHARD G. LUGAR, Indiana, Chairman
CHUCK HAGEL, Nebraska JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
LISA MURKOWSKI, Alaska BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
Kenneth A. Myers, Jr., Staff Director
Antony J. Blinken, Democratic Staff Director
(ii)
C O N T E N T S
----------
Page
Baker, Hon. Nancy Kassebaum, Commissioner, Commission for Africa,
and former U.S. Senator, Washington, DC........................ 5
Prepared statement........................................... 9
Birdsall, Nancy, President, Center for Global Development,
Washington, DC................................................. 16
Prepared statement........................................... 20
Feingold, Hon. Russell D., U.S. Senator from Wisconsin........... 3
Lugar, Hon. Richard G., U.S. Senator from Indiana................ 1
Martinez, Hon. Mel, U.S. Senator from Florida.................... 4
Thiam, Tidjane, Commissioner, Commission for Africa, and
Director, Group Strategy and Development, Aviva, London........ 11
Prepared statement........................................... 14
(iii)
THE COMMISSION FOR AFRICA: RECOMMENDATIONS FOR A COHERENT STRATEGY FOR
AFRICA
----------
TUESDAY, MAY 17, 2005
U.S. Senate,
Foreign Relations Committee,
Washington, DC.
The committee met, pursuant to notice, at 9:30 a.m., in
room SD-419, Dirksen Senate Office Building, Hon. Richard G.
Lugar, chairman of the committee, presiding.
Present: Senators Lugar, Martinez, Feingold, and Obama.
OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM
INDIANA
The Chairman. This meeting is called to order.
The Committee on Foreign Relations meets today to review
the report of the Commission for Africa issued on March 11, in
preparation for the July G-8 Summit at Gleneagles, Scotland.
The Commission for Africa was established by Prime Minister
Tony Blair to review international policy toward Africa. Prime
Minister Blair has stated his intention to make Africa policy a
priority of the G-8 during the United Kingdom's Presidency in
2005.
The G-8 already has taken steps to examine international
policies related to Africa. The Africa Action Plan was
introduced at the Kananaskis summit in 2002 and adopted at the
Evian summit in 2003. President Bush hosted the G-8 Summit at
Sea Island, Georgia, in 2004, where the plan was augmented by
the Global Peace Operations Initiative to train peacekeepers.
For 2005, Prime Minister Blair has chosen to elevate Africa
issues to the top of the agenda at the Gleneagles summit. The
report of the Commission for Africa echoes the Prime Minister's
contention that now is the time for the international community
to respond to the challenges of Africa with a concerted and
coherent program.
Today, we intend to consider the varied recommendations of
the Commission. The report is an ambitious blueprint for
harnessing the efforts of the G-8 and other nations on behalf
of African development and reform. It recognizes that African
governments must be partners for change within their own
countries and within regional organizations. It is significant
that of the 17 members of the Commission, 9 come from Africa.
There has been considerable effort to include in the report the
input of African civil society, as well as the private sector.
I met last week with Nobel Laureate Ms. Wangari Maathai of
Kenya, whose tree planting campaign has contributed greatly to
the reforestation of Kenya. Her individual initiative not only
has been an environmental triumph, it has provided resources
for the basic needs of women and children, because trees are
essential to shelter, fuel, and water conservation. She and
other individuals can have profound impact on Africa's future,
but must be enabled through good governance that facilitates
citizen participation.
I have been encouraged, recently, by the growing interest
in Africa in the United States. Our Nation sees more clearly in
the post-September 11 world how our own well-being is connected
to progress on the African Continent. Americans are coming to
understand that a stable and prosperous Africa can better
cooperate on a range of shared concerns, from weapons
proliferation and terrorism, to environmental challenges and
contagious diseases.
These changing attitudes have bolstered the work of those
in Congress who regard Africa as a priority for action. During
the last several years we have been able to put in place the
building blocks for a sustained American engagement in Africa
that can complement international efforts.
Last June, Congress passed a bill that I had introduced to
extend the Africa Growth and Opportunity Act. Thanks to AGOA,
which has exempted 1,800 African products from United States
tariffs, the African textile industry now employs tens of
thousands of workers. Moreover, nonoil trade between the United
States and Africa is expanding significantly.
In 2003, Congress passed legislation creating the
President's Millennium Challenge Corporation. This bold new
approach to aid will funnel extra assistance to developing
countries that are making improvements in economic reform,
promotion of the rule of law, and anticorruption measures.
Eight African countries are among the first 17 candidates
declared eligible for MCC funding, which builds on a key lesson
of AGOA--namely, that private investment will flow to countries
that create a stable, predictable investment climate.
In 2003, Congress also pledged $15 billion over 5 years for
the most serious crisis facing Africa, the HIV/AIDS pandemic.
In support of this initiative, I have introduced additional
legislation to address Africa's AIDS-orphan crisis, and a
resolution backing global cooperation on an HIV vaccine.
More work needs to be done to provide incentives for
private investment in Africa, to ensure that the revenues from
Africa's oil boom will go to all of its citizens, and to
relieve Africa's international debt burden. We also need to
promote agricultural development. Wealthy countries must modify
their own farm subsidies, so that Africans can both feed
themselves and compete in a fair world market for exports.
The legislation Congress has enacted, and the proposals
underway, have the potential to form the type of sustainable,
comprehensive program that we have previously lacked. But
enactment of a legislative framework for Africa is not an end
in itself. Initiatives must be carefully managed to ensure that
they work well and enjoy strong support. They also must be
coordinated with broader international efforts like the
forthcoming discussions of the G-8.
Today, we are joined by three distinguished witnesses to
discuss the Commission's report entitled ``Our Common
Interest.'' It is a great pleasure to welcome our close friend
and former Foreign Relations Committee colleague, Senator Nancy
Kassebaum Baker. She served with distinction for many years as
the chair and ranking member of the Subcommittee on African
Affairs. She brings extraordinary experience, understanding,
and compassion to the challenges facing Africa. And I would
simply note parenthetically, that Senator Kassebaum, during her
service, frequently was almost the only Senator who was
interested in Africa, and frequently prevailed upon this
Senator to join her in her office to greet Presidents, Foreign
Ministers, and other dignitaries coming from Africa, which I
was honored to do. So my education has been enhanced by my
friendship with our colleague, and it is a special privilege to
have her here today.
We are also joined by her colleague on the Commission, Mr.
Tidjane Thiam from the Ivory Coast, who has served at the World
Bank and as his country's Minister of Planning and Development.
Our third panelist is the president of the Center for Global
Development, Ms. Nancy Birdsall, whose insight and experience
in development will lend an important perspective to our
discussions.
We welcome our distinguished guests and thank them for
joining us in this discussion. We look forward to hearing their
insights on the Commission's report and their own personal
views.
Let me say at the outset that we know that we will have a
series of votes on the Senate floor, but fortunately not until
11:30. At least, that is the best word. That is about 2 hours
hence, and probably gives us the opportunity for the testimony
of our distinguished witnesses, as well as for questions and
dialogs with distinguished Senators who will join us on this
panel. I mention that so that all Senators and their staffs
might be advised that that will probably be the terminal point
for our hearing, as Senators will be engaged in a stack of
votes, and unlikely to return to the committee room.
At this moment, let me turn to Senator Feingold, who has
long served as chairman and ranking member of our African
Subcommittee, and who has intense interest in these issues.
STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR FROM
WISCONSIN
Senator Feingold. Thank you, Mr. Chairman, I thank you for
holding this hearing today, and I thank our witnesses for being
here. Of course, I look forward to hearing the views of Mr.
Thiam and Dr. Birdsall, but I am especially pleased to have the
opportunity to hear from Senator Kassebaum Baker, who served so
admirably as the chair of this committee's Subcommittee on
African Affairs when I first became the ranking member.
Senator Kassebaum Baker, along with Senator Paul Simon as
well as the chairman, really helped to inspire my great
interest in Africa, and I've maintained my involvement in
African affairs over the past decade in part because of their
wonderful example. Senator Kassebaum Baker, it is truly a
pleasure to see you here today, and to have this opportunity to
work with you again. You know how much I appreciated our work
together.
The Commission for Africa produced a weighty report full of
interesting insights and ideas, and I commend the Commissioners
for their work. We all know that issuing recommendations and
actually changing policies on the ground are two very different
things. At regular intervals we are given the opportunity to
bring a new seriousness and commitment to our engagement with
Africa. These opportunities are often associated with new
initiatives financed by squeezing resources out of the last
round of initiatives, or worse, out of basic development
efforts. In between these opportunities, we often lose
momentum, and our policies become reduced to reactions, in the
wake of conflict or crisis. But what's clear--and I obviously
know that you are very aware of this--is that we need
sustained, thoughtful, coordinated engagement if we are to
foster the real partnerships that we will need in the years
ahead.
There's nothing marginal or soft or somehow second rate
about the nature of the challenge before us. Today, our first
foreign policy priority is to combat the terrorist forces who
would do us harm. And Africa is unquestionably an important
part of that effort. The 1998 Embassy bombing, the 2002
bombings in Mombassa, and the consistent and credible reports
of terrorist organizations operating in North, West, and
Southern Africa leave no room for doubt, and it is easy to
understand, if we want strong African partners in our fight
against terrorism, we need to be strong partners ourselves in
Africa's fight against poverty. The Commission report offers a
number of ideas regarding just how we might strengthen our
efforts, by fighting corruption, by strengthening institutions,
and by investing in the African people.
I'd like to hear more about these ideas today, but I'm also
interested in about how our panelists believe an American
commitment to sustained, coordinated, multilateral engagement
to fight poverty in Africa might be maintained, despite that
impulse to reinvent the wheel that afflicts every new
administration, and often new Members of Congress. Constantly
changing casts of characters, and constantly changing competing
demands in the donor community, and in Africa, make it
difficult to secure adequate resources--but also adequate
attention, thought, and political will over the long term. So,
I'm looking forward to any remarks today that focus on what we
need to do here to be more effective, responsive, and
consistent in our approach.
I thank the panelists, and I thank the chairman.
The Chairman. I'd like to recognize now Senator Mel
Martinez, who is the chairman of our African Subcommittee.
STATEMENT OF HON. MEL MARTINEZ, U.S. SENATOR FROM FLORIDA
Senator Martinez. Mr. Chairman, I thank you very much, and
good morning to all of you, and welcome. I am delighted for you
to hold this hearing and look forward to hearing the testimony
from the witnesses, and I'm especially pleased to welcome
Senator Kassebaum Baker, whom I did not have the pleasure to
serve with, but I'm so honored to follow in your footsteps and
in the great interest you've had in issues of people around the
world. I believe it's a tremendous moment for us to come
together. Africa undoubtedly is at a crossroads, and we all, I
believe, as citizens of the world, share a moral obligation for
the success of the African Continent and understanding the
difficult conditions that exist in much of it.
I believe that our foreign policy focus is too often not
made clear, not being sufficiently focused on areas of the
world like Africa as I often have felt. I know many Latin
Americans feel the same way and I know that it's a large world,
but there's so much opportunity for good to be done, and our
country carries such a tremendous opportunity that I believe it
is part of our responsibility, to look to these developing
areas of the world, particularly now as we focus on Africa.
And I also was pleased to see in your report that there is
an acknowledgement and a recognition that Africa must drive its
own development, and that while nations like the United States
should be supportive, that the success will only come with
appropriate governance and appropriate institutions and Africa,
itself, must take responsibility for the future success of the
region.
There is much that we can do by increasing assistance that
is being provided to HIV/AIDS, and the Millennium Challenge
Account also, and a focus on counterterrorism as mentioned by
the ranking member of the subcommittee. These are all
traditional elements of our development policy and focus, which
must be continued into the future. The United States
Government, together with the international community, wants to
advance a comprehensive strategy for Africa, a strategy that
focuses on democracy and governance, institution-building,
human rights, and sustainable economic growth, a strategy that
focuses on building domestic capacity, which will bring about
lasting, positive change for the people of Africa.
So, I'm so pleased to hear and review the Commission's
recommendations, and its efforts to create a coherent policy
for Africa, but I think in general, the analysis and principle
behind the Commission report is a solid one, I look forward to
hearing from the panelists this morning in a more comprehensive
way. Thank you very much.
The Chairman. Thank you very much, Senator Martinez. Let me
mention that the statements of each of the witnesses will be
published in the record in full. Each witness may proceed as
she or he wishes, either giving a statement in full, or
summarizing. Let me just say that we are here to hear you, so
please do not truncate your remarks unduly. We are delighted to
have each one of you, and I'll ask you to testify in the order
that I introduced you, originally.
STATEMENT OF HON. NANCY KASSEBAUM BAKER, COMMISSIONER,
COMMISSION FOR AFRICA, AND FORMER U.S. SENATOR, WASHINGTON, DC
Senator Kassebaum Baker. Thank you very much, Mr. Chairman.
I've often wondered what it was like to testify on the other
side.
The Chairman. Now you know. [Laughter.]
Senator Kassebaum Baker. It may be more fun from up there
than down here, but I am very appreciative of being able to
participate this morning, in a hearing on the Commission for
Africa report. I'm particularly honored to appear with one of
my fellow Commissioners, Tidjane Thiam, who has come over from
London just for this hearing. He originally came from Cote
d'Ivoire, and is a distinguished businessman now in London.
I've benefited greatly from his wisdom during the Commission
debates, so I'm particularly pleased that he could be able to
testify with us this morning.
As you know, and as mentioned, Mr. Chairman, we were
brought together by Prime Minister Blair to look at Africa's
challenges and propose some suggested policy direction, which
he was to present as head of the G-8 meeting in July. We
released our report, ``Our Common Interest,'' in March, as a
total package of interrelated recommendations as well as the
price tag. The Commission's report seems overwhelming. Many
Africans would say, ``We have heard all of this before. We know
what the problems are, so why are the proposals--are the
proposals any good faith over the years.
As one of the 17-member Commissioners, I believe that one
of the significant reasons for attention to the report, is that
unlike previous studies, the majority of the Commissioners came
from Africa. These Commissioners emphasize the importance of
Africans themselves, demonstrating the necessary leadership to
address, ``the weakness of governance and the absence of an
effective state.''
Africa is changing, and a younger generation wants to break
the cycle of loss. This is an opportunity, not to just make a
pledge of support, or a nod to financial aid, but to step
forward and work together constructively to make a difference.
I also believe the Commission reflected Prime Minister Blair's
personal and genuine commitment to Africa's future. The
Commission was not a political ploy or public relations
exercise. It represented a serious and sincere attempt to help
Africa move forward.
President Bush and many of the other G-8 leaders share the
Prime Minister's commitment. In this report, we outline some
important new directions on coordination and institutional
sustainability. While the many recommendations form an integral
part of the whole, I believe we should identify one or two
immediate priorities to concentrate attention and financing, to
show what works and if such an approach can be successfully
replicated in other areas. The amount of money, in many ways,
is not as important as the effectiveness of the delivery
system. What is exciting to me is the opportunity to show what
might be accomplished with restructured approaches. First, the
Commission recognizes the foundation of Africa's progress
begins with better leadership on the African Continent. Many of
the failings of Africa over the past decade can be traced to
the lack of effective and accountable government. Without these
effective and accountable governments, Africa cannot progress,
no matter how much money is provided.
To improve governance, the report highlights the importance
of helping Africa develop effective civil service
administrations, independent judiciaries, and strong
parliaments. Fighting corruption is essential. We must find
better ways to stop the players with bribes, including
multinational corporations, and those who solicit and pocket
bribes on the African Continent. Again, that's a tall order,
and I'm sympathetic to what Senator Feingold said about being
able to sustain these things that we address so often, and the
reason I'm encouraged, as I've said, is I think there are
leaders today, such as Mr. Thiam here, who represent a change,
and recognize that change is taking place on the continent.
The report highlights the role that increased foreign
assistance can play in Africa's development. Many of the press
articles about the Commission report have emphasized the
foreign aid numbers. But to me, again, as important as the
amount of foreign assistance, is the method of delivery. I've
long been frustrated by the uncoordinated, highly bureaucratic
ways we provide foreign assistance in Africa. Every donor seems
to have his or her pet scheme, with little effort to
consolidate approaches. The proliferation of initiatives
undermines effectiveness of foreign assistance. Even in our own
government, the numerous government agencies involved in
development assistance makes it difficult to coordinate.
The report recognizes that we must improve the ``quality''
of aid. I believe the American people, and people throughout
the developed world who will support increases in assistance,
if they know the money will make a difference in improving the
lives of Africans. I believe strongly that we should build on
the strength of public/private partnerships, such as the Bill
and Melinda Gates Foundation, or the recently announced Clinton
Global Initiative. But as an example of one that I'm familiar
with, I would like to talk about the partnership in the
healthcare field of the Kaiser Family Foundation, which has
successfully maintained involvement in South Africa since 1987.
Since that time, the foundation has committed about $200
million, and leveraged three times that amount from other
funders in support of South African's efforts to establish a
more equitable, national public health system. In the total
picture, financial needs in African health services, that is
not a large amount. And I am very appreciative, Mr. Chairman,
of your initiative regarding AIDS support for orphans. This is
an extremely important area needs now to be met to address the
future.
However, the basic principles that guided the Kaiser Family
Foundation work have proven most successful. One is the
collaborative partnership with the host country, working with
South Africa to see what was needed, encouraging those in the
public health sector to work together to achieve these results.
Second, external funders were engaged in local policy context.
This provides the local government a sustainable stake in
success of a national health program. It has proven to be a
most successful program, and I believe it's because its early
groundwork was done with the host country, with local
institutions that were needed to sustain a program over the
long term. So often we race in, and then we race out, and then
again, we reinvent the wheel. So that's why I use that as an
example that, I think, merits our thinking about.
The Commission report proposes the creation of an
infrastructure fund to support the development of roads,
railroads, and rivers. This is an area that can provide jobs
and begin immediately to enhance the economy, not only by money
in the pocket, but also by facilitating the movement of goods
to both domestic and international markets. We argue about
being able to encourage trade, it can't be done if there is not
the roads and railroads over which to take it, both to get it
to port, or get a better trade buy between countries within the
continent.
Again, public/private funding partnerships, I believe,
could be most successful. Coordinated management with the
regional government can serve as a model of a new approach that
has been tried sometimes in limited ways, and where it has
been, it can be proven to be successful. This does not require
a Marshall Plan idea, as much as it does a grassroot level
approach, and tough management. The success of the Marshall
Plan was that it was a business approach with a clear
understanding of institutional sustainability.
I skip over many important Commission recommendations, but
by just naming a few, it gives an idea of the width and depth
of the integrated plan. Debt cancellation, corruption,
education, strengthening governance, ending trade barriers and
subsidies, especially for cotton and sugar, and environmental
sustainability. Education, as we all know, is particularly
important, and is needed to provide the engineers, the
mechanics, the craftsman, the teachers, the nurses and the
doctors. There can be no more important legacy one leaves from
one generation to another, than quality education.
The report also stresses the most important voice in
Africa. One which is seldom heard--the women. As in most
countries, women are the backbone of family and community.
Their voices are critical to hear, through democratic processes
and leadership positions. I'm absolutely confident, Mr.
Chairman, that those voices could make a big difference in the
future of Africa.
Last, I mention security, and I think this is a subject
that Mr. Thiam will cover in more depth, but it's the basic
desire for us all. And no one can thrive, nor can a country
grow without a sense of security and hope. It is security from
wars, from disease, and from poverty. Poverty and the sense of
hopelessness can affect all else, and all too frequently can
lead to participation in renegade terrorist groups. I would
just like to report, and I--the recommendation of the
Commission won its strongest support from the African Union in
undertaking a dedicated effort for mediation--but control of
small arms is a major concern to Africa and last August I was
in the Democratic Republic of Congo and saw their buyback plan
that was being tested by the U.N. funding. I would have to say
just from my initial operation, it was not fully operating, but
it was set up to start. I think other initiatives should be
given a try. I personally wish we could consider not just
buyback for arms turned in, but again, money that would be
given as payment for work done in building a health center or a
school or road work so that there is a job as well for turning
in arms, otherwise there's not much to be offered except what
is money in the pocket.
We must also move faster to support reconstruction after
conflict ends, and during this trip in the Congo, I was shocked
by the slow progress to reconstruct the country. The plans were
drafted, the money was there, but projects had yet to get off
the ground, I think largely because there had been such a slow
effort to be able to pull together coordination. We risk losing
the peace in the Congo, and other post-conflict situations,
unless we can move faster to build the peace.
As President George W. Bush has said, ``persistent poverty
and oppression can lead to hopelessness and despair, and when
governments fail to meet the most basic needs of their people,
these failed states can become havens for terror. Development
provides the resources to build hope and prosperity and
security.'' There are no better words, I think, Mr. Chairman,
to describe the importance of Africa's future, and our common
interest.
One word of caution: We must be careful that we don't
promise more than we can deliver and we must fund what we
promise. Thank you, Mr. Chairman.
[The prepared statement of Senator Kassebaum Baker
follows:]
Prepared Statement of Hon. Nancy Kassebaum Baker, Commissioner,
Commission for Africa, and Former U.S. Senator, Washington, DC
Mr. Chairman, thank you for the opportunity to discuss the
Commission for Africa report. I am particularly honored to appear with
one of my fellow. Commissioners, Tidjane Thiam. Tidjane originally
comes from Ivory Coast, and is now a distinguished businessman in
London. I benefited greatly from Tidjane's wisdom during the Commission
debates, and am so pleased he was able to join the committee today.
As you know, Tidjane and I were 2 of 17 Commissioners brought
together by British Prime Minister Tony Blair to look at Africa's
challenges and propose some suggested policy directions. We released
our report, ``Our Common Interest,'' in March.
As a total package of interrelated recommendations, as well as the
price tag, the Commission's report seems overwhelming. Many Africans
would say, ``We have heard all of this before.'' We know what the
problems are so why are the proposals any different from the many other
plans that have been developed in good faith over the years?
As 1 of the 17-member Commissioners, I believe that one of the
significant reasons for attention to the report is that unlike previous
studies, the majority of the Commissioners come from Africa. These
Commissioners emphasized the importance of Africans themselves
demonstrating the necessary leadership to address ``the weakness of
governance and, the absence of an effective state.'' Africa is changing
and a younger generation wants to break the cycle of loss. This is an
opportunity not to just make a pledge of support or a nod to financial
aid, but to step forward and work together constructively to make a
difference.
I also believe the Commission reflected Prime Minister Blair's
personal and genuine commitment, to Africa's future. The Commission was
not a political ploy or public relations exercise; it represented a
serious and sincere attempt to help Africa move forward. President Bush
and many of the other G-8 leaders share the Prime Minister's
commitment.
In this report, we outlined some important new directions on
coordination and institutional sustainability. While the many
recommendations form an integral part of the whole, I believe we should
identify one or two immediate priorities to concentrate attention and
financing to show what works and if such an approach can be
successfully replicated in other areas. The amount of money, in many
ways, is not as important as the effectiveness of the delivery system.
What is exciting to me is the opportunity to show what might be
accomplished with restructured approaches.
First, the Commission recognizes that the foundation of Africa's
progress begins with better leadership on the African Continent. Many
of the failings of Africa over the past decades can be traced to the
lack of effective and accountable governments.
In our discussions, I was particularly struck by the arguments
coming from the African Commissioners, who emphasized the importance of
Africans themselves demonstrating the necessary leadership to address
the weakness of governance and the absence of an effective state.
Without this leadership, Africa cannot progress, no matter how much
money we provide.
To improve governance, the report highlights the importance of
helping Africa develop effective civil service administrations,
independent judiciaries, and strong parliaments. Fighting corruption is
essential. We must find better ways to stop both the payers of bribes,
including multinational corporations, and those who solicit and pocket
bribes on the African Continent.
The report highlights the role that increased foreign assistance
can play in Africa's development. Many of the press articles about the
Commission report have emphasized the foreign aid numbers. But to me,
as important as the amount of foreign assistance, is the method of
delivery.
I have long been frustrated by the uncoordinated, highly
bureaucratic ways we provide foreign assistance in Africa. Every donor
seems to have his or her pet scheme, with little effort to consolidate
approaches. The proliferation of initiatives undermines the
effectiveness of foreign assistance. Even in our own government, the
numerous government agencies involved in development assistance makes
it difficult to coordinate.
The report recognizes that we must improve the ``quality of aid.''
I believe the American people--and people throughout the developed
world--will support increases in assistance if they know the money will
make a difference in improving the lives of Africans.
We should build on the strength of public/private partnerships,
such as the Bill and Melinda Gates Foundation or the Clinton Global
Initiative. An example of one such partnership in the field of health
care is the Kaiser Family Foundation which has successfully maintained
involvement in South Africa since 1987. Since that time, the foundation
has committed about $200 million and leveraged three times that amount
from other funders in support of South African efforts to establish a
more equitable national public health system. In the total picture of
financial needs in African health services that is not a large amount.
However, the basic principles guiding the work have proven most
successful. One is the collaborative partnership with the host country.
External funders have engaged local policy context. This provides the
local government a sustainable stake in the success of a national
health prcgram.
The Commission report proposes the creation of an infrastructure
fund to support the development of roads, railroads, and rivers. This
is an area that can provide jobs and begin immediately to enhance the
economy, not only by money in the pocket but also by facilitating the
movement of goods to both domestic and international markets. Again,
public/private funding partnerships, in coordinated management, with
the regional governments could be a model. This does not require a
Marshall Plan idea as much as it does a grassroots-level approach and
tough management. The success of the Marshall Plan was that it was a
business approach with a clear understanding of institutional
sustainability.
I skip over many important Commission recommendations, but by just
naming a few it gives an idea of the width and depth of the integrated
plan--debt cancellation, corruption, education, strengthening
governance, ending trade barriers and subsidies (especially for cotton
and sugar), and environmental sustainability. Education is particularly
important, as it is needed to provide the engineers and mechanics, the
craftsman, the teachers, the nurses and doctors. There can be no more
important legacy one leaves from one generation to another than quality
education.
The report also stresses the most important voice in Africa, one
which is seldom heard--the women. As in most countries, women are the
backbone of family and community. Their voices are critical to hear
through democratic processes and leadership positions. I am absolutely
convinced this is a network that could make a difference.
Last, I mention security. Security is the basic desire for us all.
No one can thrive nor can a country grow without a sense of security
and hope. It is security from wars, from disease, and from poverty.
Poverty, in the sense of hopelessness, can affect all else and all too
frequently can lead to participation in renegade terrorist groups. The
Commission makes several recommendations to prevent conflict through
mediation. The African Union is undertaking a dedicated effort in this
direction. Control of small arms is a major concern to Africans. Buy-
back plans are being tested in the Democratic Republic of the Congo.
Other initiatives should be tried. Funding should be increased for the
African Standby Force. A well-trained, disciplined, and well-paid
African peacekeeping force could serve an important function.
We must also move faster to support reconstruction after conflict
ends. During my trip to the Congo, in August, I was shocked by the slow
progress to reconstruct the country. The plans we drafted, the money
was there, but projects had yet to get off the ground. We risk losing
the peace in the Congo--and in other post-conflict situations--unless
we can move faster to build the peace.
As President George W. Bush has said, ``Persistent poverty and
oppression can lead to hopelessness and despair. And when governments
fail to meet the most basic needs of their people, these failed states
can become havens for terror. Development provides the resources to
build hope and prosperity and security.'' There are no better words to
describe the importance of Africa's future and ``Our Common Interest.''
One word of caution--we must be careful that we don't promise more than
we can deliver and we must fund what we promise.
The Chairman. Thank you, indeed, for that very thoughtful
testimony. You have helped introduce your colleague on the
Commission, and we look forward to hearing now from you, Mr.
Thiam.
STATEMENT OF TIDJANE THIAM, COMMISSIONER, COMMISSION FOR
AFRICA, AND DIRECTOR, GROUP STRATEGY AND DEVELOPMENT, AVIVA,
LONDON
Mr. Thiam. Thank you, Mr. Chairman.
I'd like to thank Senator Lugar, and your colleagues on the
Senate Foreign Relations Committee for inviting me to give
evidence on the Commission for Africa today. I would just like
to thank Nancy Kassebaum for her very useful comments and for
all the insights and assistance she gave me, I have every
intention to continue benefiting from that assistance.
I would like to provide you with some written evidence in
the form of a letter, my comments now will draw mainly on the
contents of that letter. And I would like to open my
contribution by stating that I believe that Africa's growth and
development are first and foremost an issue for Africans.
Because of the nature and the mandate of the Commission, we are
focused on recommendations on what the international community
can do, however, the Commissioners, and all the African
Commissioners recognize that the primary factor for Africa's
development, for its successes and failures, remain with
Africans and African institutions, such as the African Union
and NEPAD.
Negative perceptions of Africa abound. One just has to open
a newspaper or turn on the television to hear about the
violence in Zimbabwe, deaths in Sudan, and poor governance. But
next to a visible and failing Africa, I would claim that
there's a more discrete, hardworking, and more successful
Africa.
In 1999 in my country, a power plant was designed and built
by African engineers, and financed entirely by the private
sector. I led the team of African experts that designed and
negotiated that public/private partnership. This project was
nominated by the Financial Times as one of the six boldest
energy projects in the world that year. As we speak, 170 young
women work in a plant in Morocco, producing some of the most
sophisticated components for net systems in the world. One of
the most productive tuna factories in the world is in West
Africa. If I look at a company like Nestle, which has thousands
of employees in Africa, it runs all its African factories
without any expatriates. So there are many, many positive
stories on the continent.
There is enough coverage of the African tragedy. What
matters now is to convince the world that something can be done
about it. Most deaths in Africa are entirely avoidable;
preventable. Just to take an example, I'm sure you know that
the first cause of child mortality in Africa is not AIDS or
malaria, it is diarrhea. Babies die of dehydration, because
their mothers do not know how to take care of them when they
are sick. That is an education and information problem. Several
countries have tackled it very cheaply and very effectively.
There are solutions that work, that are known. We know we can
implement them by empowering people.
I'd just like to touch quickly on four areas: The first one
is peace and security, the second one is trade, the third one
is AIDS, and then to finish, the implementation of our
recommendations.
Africa is plagued by many conflicts. Our report contains
many important proposals to help us prevent conflicts. Until my
country, Cote d'Ivoire, became better known for coups and
instability, it was recognized as an African success story.
There I have seen, firsthand, how the achievements of 40 years
of progress can be destroyed in less than a year. Cote
d'Ivoire's conflict and ultimately its solution are the
responsibility of I'vorians. But diplomats and donors did not
help by ignoring the tensions in the country, increased
pressure on land, the politicization of ethnic identities, the
impact of regional tensions on our internal policies. It didn't
help when donor countries so quickly recognized and even
supported the government of General Guei, and failed to support
the efforts of our neighbors and of the African Union to
sanction him and his government. I must say that that was not
the case for the United States which took a very firm position
on this issue and did not cooperate with General Guei's regime.
The Commission therefore argues in favor of greater and
more effective support to strengthen African organizations--the
AU and NEPAD--and their ability to promote good governance and
security. All societies have to deal with tensions and
potential conflicts. What is often missing in Africa are the
tools and mechanisms to resolve these tensions and conflicts in
a nonviolent manner. I would hope that the large international
consensus on the importance of peace and security, will lead to
more resources being devoted to conflict prevention, and peace-
building in Africa, as Nancy explained very eloquently. Without
peace and security, there will be no development. We need to
support vulnerable states, the so-called ``fragile'' states, as
they are a prime recruiting ground for terrorist organizations,
as Senator Feingold mentioned. In my country, we say that no
community should aspire to be an oasis in the desert, because
generally it's the desert that wins.
Moving on to my second topic, trade and economy, it is
important that the international trade system be managed in a
way that allows farmers in the rural communities in Africa to
make a living and raise their families. Africa has two things
in abundance--land and sun. Agriculture is therefore one of the
key areas, as you said, Mr. Chairman, where it can aspire to
enjoy comparative advantage. Our farmers cannot compete with
the subsidized meat, flour, milk, and butter coming from the
OECD, and the poor in the cities of Cote d'Ivoire eat bread
made with subsidized EU flour, with subsidized French butter,
and that is a tragedy.
African economies are still hampered by unfair barriers to
trade, and subsidies in the developed world. The forthcoming
Doha Development Agreement is a prime opportunity to change
this situation for the better. Our proposals in this area are
among the most important.
I'd like to say a few words now about aid. My country,
before conflict, was one of the leading recipients of aid in
Africa. As a Minister, I was responsible for several years for
coordinating that aid, and I am one of many Africans who have
experienced the negative impact of unaccountable international
development agencies. I have developed a matrix of the
conditions that my country had to meet--there were hundreds of
them at any point in time. That was clearly, for me, the
symptom of a system that had gotten out of control.
Indeed, much of the report is focused on how to make aid
more effective. This will involve actions from the donor
countries of course, but also the recipient countries. I
recognize the damage done by corruption, and that aid has
become an unpopular concept now in most of countries because of
joint experiences. That being said, we call for better
cooperation between Africa and the rest of the world, and we
think that institutions like the World Bank have a primary
responsibility here. I hope that Paul Wolfowitz's leadership of
the World Bank will oversee many of the changes in culture,
including allowing countries to determine their own priorities,
and reducing the amount of resources spent on international
experts, bureaucrats, and controllers. Out of the 11 billion
United States dollars of aid to Africa, $3 to $4 billion are
spent on expertise and controllers, which is generally not
African expertise. You have more than 100,000 Africans working
in the United States when at the same time extremely expensive
technical assistance is used in Africa, and sourced from the
outside world, regularly. That situation has to be addressed.
One of the areas where aid can be most effective is
education. Nancy Kassebaum mentioned education for women. We
conducted a study in Cote d'Ivoire which showed that women,
illiterate women in the countryside, have 8.2 children on
average, and educated women in the cities have 3.2 children.
You can see that the prospects of these children and their
future will be completely different in one of these situations
or the other. Education of women has to be at the center of
development. We all regret the corruption that prevails in many
places in Africa. My experience has convinced me that one
cannot buy good governance with conditionalities. Here in
America, the guardians of democracy are its citizens, the men
and women of this country. Africa will have sustainable
democracies only when its men and women are educated and well
informed. They will then hold their leaders accountable, and
make corruption unacceptable.
I have read Mark Twain, and we all know that the high
standards which you enjoy in public life, and that the whole
world admires, were achieved over many decades and many battles
for transparency in government, for a free press, and for an
independent and strong judiciary.
Finally, I would like to make a few comments on how the
Commission's findings should be implemented. The report
proposes a comprehensive treatment of the issues, offering some
new ideas, but focusing in many places on how to implement and
keep commitments and hold ourselves accountable for what we
promise. Implementation of such a comprehensive report is going
to be a challenge, and will require commitment from both
African and G-8 governments.
Two thousand and five presents many opportunities for
making real changes for the benefit of Africa and of the world.
The G-8 Summit, the Millennium Review Summit in September, and
the Hong Kong WTO meetings in December, offer real
opportunities to take forward our recommendations. We are not
calling upon each government to do everything. We think that
countries should build on their recent activities and strengths
in taking forward this agenda. The United States has already
recognized that Africa is changing for the better, and given
its support to that. It has substantially increased its
commitment to Africa in recent years, and set up programs such
as the Millennium Challenge Account, and PEPFAR for HIV. The
United States has a strong historical interest in Africa and
there are many private connections between our two countries;
my own wife is American and used to work in this building for
Senator Biden. America historically has had a very strong
interest in the private sector and investment, and building the
capacity of African countries to trade. It has also supported
transparency and anticorruption initiatives, and efforts to
promote security in Africa, and I believe that the United
States can build on this, and with other G-8 countries, use
their influence to make sure that the most significant
obstacles to growth in Africa are removed.
In conclusion, I would like to thank you again for inviting
me to Washington to give evidence on the Commission report and
for your interest in this work. I believe that by putting our
intelligencies together we can build a better future for the
children of Africa, thank you.
[The prepared statement of Mr. Thiam follows:]
Prepared Statement of Tidjane Thiam, Commissioner, Commission on
Africa, and Director, Group Strategy and Development, Aviva, London
Dear Senator Lugar: I am sending this letter as my written
submission to the Senate Foreign Relations Committee hearing on the
Commission for Africa on 17 May.
First, let me begin by thanking you for the opportunity to appear
before the committee. It is an experience I look forward to. The
support of the United States is vital to development in Africa, and for
the successful implementation of the Commission for Africa's
recommendations.
The committee has already received copies of the report and
briefing materials on its contents. So rather than recapitulating its
contents in detail, I wanted to focus my written comments on why there
is a need for urgent action, and what I expect the results of
successful implementation would be from my own experience.
I, and most Africans in my generation, believe that Africa's growth
and development are, first and foremost, an issue for Africans.
External assistance must complement a movement from inside Africa--on
governance, on preventing and resolving conflicts, and on developing
the policies that will achieve development and growth. Because of the
nature and the mandate of the Commission, we have focused our
recommendations on what the international community can do. The primary
responsibility for Africa's development remains with Africans and
African institutions such as the African Union and NEPAD.
We present a comprehensive package, which includes governance,
peace and security, health and education, growth and infrastructure,
trade, aid effectiveness, and making international institutions fairer
and more effective.
Why Africa?
There are many arguments for why Africa needs action on these
issues. Many cite the moral reasons--and also the developed world's
self-interest, relating to the global threats created by the failure to
check the spread of disease and conflict in Africa.
But for me, the real message is one of fairness and opportunity.
Contrary to popular perception, Africa already presents many
opportunities. Many African economies are growing. Many international
businesses have seen the opportunities presented by Africa, and are
making profits there. A recent study commissioned by Vodafone shows
that Africa is the fastest growing mobile phone market in the world--
increasing by 1,000 percent in the past 5 years. International
companies make profits from growing markets and opportunities in
Africa, create employment in Africa, and build their businesses on the
expertise of their African workforces.
To allow the kind of growth that will allow Africans to find their
way out of poverty, Africa needs a level playing field. This means
reform to eliminate agricultural subsidies, and other trade barriers.
Also, Africans must be empowered to find their own solutions to their
own problems, which means democracy (to guarantee basic human rights),
market economies which will attract foreign direct investment and
create jobs, education (which will allow them to identify and seize
opportunities), and rule of law and peace and security, which will
allow them to enjoy the fruit of their efforts. All governments know
civil unrest and crime are serious risks when people do not have
opportunities and employment--and this goes particularly for the young.
The international community--particularly G-8 countries--have the
opportunity to build on the positive political and economic
developments. If we do not act now, then the opportunities for long-
term change could be squandered.
What do we want to achieve?
The Commission makes ambitious recommendations about how to create
this level playing field, how to ensure Africa has the capacity to take
advantage of greater opportunity, and how to check those factors that
threaten to hamper progress, such as instability and HIV and AIDS.
From my own experience as a Minister in Cote d'Ivoire, I can
suggest the following outcomes of implementing the recommendations of
the Commission for Africa.
As you know, until the late nineties and the coup in 1999, Cote
d'Ivoire was often identified as an African success story--with high
rates of growth and an economy that attracted inward migration from its
neighbours. The picture is now a very different one. Now that
instability has taken hold in Cote d'Ivoire, the costs to economic
development and poverty reduction have been done--and it will take a
long time for the country to recover. As in Rwanda, DRC, Sudan, Angola,
and throughout West Africa, the costs to African development of failing
to prevent conflict are hard to calculate. Much more needs to be done
sooner if we are not to see farther reversals in Africa's fortunes.
The demise into conflict in Cote d'Ivoire is ultimately the
responsibility of national actors, but the international community
could have done much more to influence events.
For a long time, donor and diplomats ignored growing tensions over
land, growing inequality between groups, nationality, and political
power.
Also, following the coup in Cote d'Ivoire, donor governments were
quick to recognise military regime, and in some cases, supported it. In
contrast, the Organisation for Africa Unity refused to recognise it and
barred the then-President, General Guei, from attending its summit in
the summer of 2000. Having seen the impact of the conflict on Cote
d'Ivoire and imagining what its long-term impact will be, it seems that
following African leadership would have been the better option for the
international community.
The Commission makes recommendations on how to improve future
responses by making donors better at identifying and acting on the
risks of instability, and by strengthening African regional means of
promoting improved governance and conflict through support for the AU/
NEPAD Africa Peer Review Mechanism and African Union and regional
organisations' operations to prevent and resolve conflict.
We also argue that the international community must focus on weak
and conflict-affected states, as well as ``good performers,'' as the
latter are also vulnerable to spreading instability. Regional
insecurity, particularly in Liberia and Sierra Leone, also brought
refugees and the risk of instability in Cote d'Ivoire. Politics and
stability in Cote d'Ivoire, like so many other countries, was impacted
by the easy access to arms in West Africa, largely financed by blood
diamonds. We make recommendations aimed at increasing transparency in
extractive industries and control the use of natural resources such as
diamonds to finance conflict, as well as controlling arms flows.
Much of our report is about making aid more effective, not least
our recommendations on international institutions. Whilst in government
in Cote d'Ivoire, I suffered the impact of international agencies
unaccountable to recipient governments and whose staff placed true
ownership and understanding of the context beneath their own priorities
and views. Aside from the impact on relationships, low effectiveness
and accountability of international institutions reduces the effective
use of development resources. The Commission calls on the International
Financial Institutions (IFIs), such as the International Monetary Fund
and the World Bank, to increase their focus on Africa and to make their
governance and internal structures more conducive to effective and
accountable operations. The countries must be left free to determine
their priorities and spend the money in the most cost effective way.
The IFIs give roughly USD 11 billion to Africa; 3 to 4 billion of that
amount are spent on experts, bureaucrats, and controllers--on every
dollar of aid 70 to 80 cents go straight back to developed countries.
Despite Cote d'Ivoire's earlier successes, agricultural subsidies
and trade barriers in OECD countries did great harm to our economy,
particularly agriculture. African farmers cannot compete with the
subsidised meat, flour, milk, and butter coming from the OECD. Higher
duties on processed cocoa products than raw beans discouraged added
value. The forthcoming Doha Development Agreement is a prime
opportunity to change policies on these tariffs and subsidies, as we
recommend in our report. Alongside our recommendations to increase
investment in the capacity to trade, infrastructure, and means to
improve the climate for private sector growth and investment, this
would enable agriculture to grow in African countries and for growing
populations to be fed as well as promoting growth and economic
development. We support the creation of an Africa Enterprise Challenge
Fund to support private sector initiatives that contribute to small
enterprise development--an initiative that has already elicited
interest from the United States.
Education has to be at the root of development and accountable
governance. Without education, the public are vulnerable to
manipulation and are ill-equipped to hold politicians to account.
Education of girls and women is essential to development. Women who are
educated are far more likely to have greater space between children,
reducing vulnerability to poverty and promoting healthier families. The
Commission recommends that African governments develop measures to get
girls as well as boys into school and that donors provide support to
these steps. Many people in the United States and Europe would be
surprised to hear that children in most African countries do not have
access to free basic education--fees for education are common. In
Uganda, when user fees were removed, enrollment of the poorest girls
doubled. The Commission recommends that donors provide financing that
enables the removal of these fees.
What are we asking of G-8 countries?
The United Kingdom's forthcoming presidencies of the EU and G-8
were a strong factor behind the creation of the Commission for Africa
by Tony Blair. The final report makes strong, action-focused
recommendation that require resources and political commitment from a
range of actors, not least G-8 and EU countries.
We are not expecting each government to do everything. There are
clear areas where individual governments have strengths. The United
States has increased its commitment to Africa and to development in
recent years: Doubling its aid to Africa, and creating the Millennium
Challenge Account and PEPFAR programmes, and implementing AGOA. This
shows a recognition of, and commitment to, supporting change in Africa.
The United States has shown a strong interest in issues such as HIV and
AlDs, promoting good governance and a good climate for private sector
growth and investment, and building the capacity of African countries
to trade. It has shown support for transparency initiatives, such as
the Extractive Industries Transparency Initiative and the African Union
and regional efforts to promote security, and has been active in steps
to promote the tracing of illicit assets.
The United States can aid the implementation of the Commission's
recommendations and promote further development in Africa by building
on these achievements and its existing experience in the areas of where
it has already shown an interest. The United States can also provide
support to a strong statement from this year's G-8 summit, action at
this year's Millennium Review Summit, including support for U.N.
reform, and in Hong Kong to promote a Doha Development Agreement that
provides real progress for developing countries.
We also call upon G-8 countries and others to use their influence
in the international system to ensure that international
organisations--such as the World Bank, International Monetary Fund, and
the United Nations--work well and in the interests of Africa.
The Chairman. Well, thank you very much, Mr. Thiam. We're
delighted to know of your family ties to the Senate, likewise.
I'd like to call, now, upon Ms. Birdsall for her testimony.
STATEMENT OF NANCY BIRDSALL, PRESIDENT, CENTER FOR GLOBAL
DEVELOPMENT, WASHINGTON, DC
Ms. Birdsall. Thank you very much, Senator Lugar and
members of the committee, I feel privileged. Thank you, Senator
Kassebaum Baker who understands the way things work here. Thank
you for this opportunity to appear before this committee to
talk about Africa and the excellent report, ``Our Common
Interest.''
I must say it's always, for me, in testifying before a
committee, a wonderful reminder of the privilege we have as
Americans in benefiting from our impressive system of
government, so it's a special pleasure to be testifying today
with a former Senator and distinguished member of the
committee, and I thank her and Mr. Thiam for the tremendous
contribution they made as Commissioners, working on this
report.
I would like to see my full testimony entered in the
record, and instead of trying to go through a lot of it,
because I am a policy wonk, it's long, I'd like to bring up a
couple of specific issues. In fact, what I'll do is remark
quickly on why I think this report is so timely, and then
comment on the major recommendation for the outside world, not
the only, certainly, but the major one, and then move to how
the United States might support the work of this Commission in
the run up and at the G-8 Summit.
I would like to associate myself, right away, with
virtually all of the testimony already provided by my two
colleagues, particularly on issues like education, girl's
education, the responsibilities of the rich countries on the
trade side, the problem of the fragmented, and really chaotic,
donor system, responsibility in the United States, and other
OECD countries to fight bribery, illegal capital flight, to do
our part on that score.
A word on why the report is timely. This was emphasized by
Mr. Thiam, and by Nancy Kassebaum Baker--the African
governments and peoples have made a real point of saying
they're in charge, and they feel accountable, and this
Commission report emphasizes the partnership of the mutual
responsibility of Africans to build sound and accountable
government institutions, and the rich world to provide greater
training opportunities and more aid.
The fact is that in the last decade and somewhat more, we
have seen unprecedented progress in Africa, including in areas
like health and education, at rates more rapid than what's ever
achieved in Western countries. We've seen many more countries
enjoying macroeconomic stability, and taking the necessary
steps to ensure that stability, which provides the right
environment for private investment, and we've seen countries
such as Mozambique, Ghana, and Uganda benefit from rapid and
steady per capita growth. We also have today, in Africa, a real
surge in the number of democracies, compared to 10 years ago.
So, it's the right moment to work in solidarity with colleagues
and governments in Africa.
Let me go to a comment on a key recommendation of the
Commission report, and that is the question of resources. The
report, as you know, recommends that there be a doubling of aid
to Africa from $25 billion today, approximately, to another $25
billion a year between now and the year 2010, and then, for the
next several years after that, to 2015. So, in effect, the
report is suggesting that we have a tripling of aid, if there
are results in the first period, over the next 10 years.
I'd like to make a few comments about that. The first is
that the amounts seem very large if you are dealing with the
fiscal pressures in the rich countries. In fact, however,
current aid to Africa is only about $28 per person in Africa,
which is hardly a foundation on which to build sustained growth
and development. However, it's also true that we have to be
concerned and watchful about how such big infusions of aid
would be spent. Let me mention four particular concerns.
One has to do with the speed at which the large increases
proposed can be used effectively. The emphasis is on the need
for recipient governments to be accountable, if aid is to be
affected, and that makes eminent sense. But it is risky to ramp
up aid too quickly. For example, too much aid can overwhelm
fragile preventative health efforts and road maintenance
programs if the tension shifts to new investments. In the worst
case, it can create pressures for corruption and patronage, as
procurement and expenditure management systems break down. In
effect, Mr. Thiam alluded somewhat to these problems of the
past. So there are these risks.
Second, the report does not make that explicit the logic of
different amounts of aid for different countries, depending on
the countries' progress in their own governance. The approach
that the Millennium Challenge Account chose. With the
Millennium Challenge Account, the plan is to concentrate aid in
those countries with the best governance who are also still
very poor, to ensure that the aid is used well.
A third concern about the recommendations on resources is
that the emphasis is, at least implicitly, on public aid to
public entities, government-to-government aid. I think that the
international community needs to be much more creative about
how to increase public aid--not just private giving, although
that's important as well--but public aid that goes more
directly to people. Following along the lines that Nancy
Kassebaum Baker referred to in the work of the Kaiser
Foundation.
Fourth, the report does discuss the problem of integrating
economies in Africa, so that they can better exploit their own
potential for trading with each other. So, I would call this,
in a sense, the regionalism challenge. But we do need to think
much more deeply about the problems that Africa faces, because
it is cut up into so many small countries. Imagine the economy
of Chicago--which is slightly larger than the economy of all of
sub-Saharan Africa--divided into 45 different entities, with 45
direct governors of central banks, 45 different customs and
tariff arrangements and so on. In that respect, I think that
it's worth thinking very hard about creating centers of
excellence that are across countries, say for university
training, for research and development, which would help retain
African talent, which is now hemorrhaging out of Africa, and
thinking about major investments, as the report does mention,
to enable them to exploit the tremendous benefits implicit in
better training opportunities.
Let me now turn briefly to ideas about what the U.S.
contribution could be in reinforcing the recommendations of
this report at the G-8 Summit. And let me say, I think it is
absolutely critical for the President, with the support of
Congress, to have some kind of a visible package in support of
Prime Minister Blair and our partners in the G-8 when he
arrives in Gleneagles.
I have five specific points that I'll mention, I don't want
them to exclude in any way many of the ideas already presented
to you by my colleagues.
The first has to do with the problems and the challenge of
peace and security in Africa, and the need to ramp up support
for the African peace and security architecture, particularly
through the African Union. The administration and Congress
should work together to fully support, as a start, a new Office
for Reconstruction and Stabilization at the State Department.
We have to commend Senators Lugar and Biden for the legislative
initiative that led to the creation of that office.
At the G-8 the United States could take major leadership in
emphasizing this issue of financing for dealing with the
problems of failing states, both in terms of peace and security
architecture, the AU, but also in terms of finding creative
ways to support those societies where government is fragile, or
the state itself is fragile. This is where some creative
thinking is needed.
The resources currently on the table for the work that
Senators Lugar and Biden initiated should be seen only as a
down payment, and if the United States could, at least at the
G-8 Summit, work with its partners to say, by next year we need
to have a forceful effort in this area, that would be terrific.
The second issue has to do with the crying need for malaria
and AIDS vaccines, which would be of tremendous benefit in
Africa. Much more aid could be spent effectively to help
Africa, but spent outside Africa, and this is one example where
the United States could take leadership in pressing for a
system, something called an advance purchase agreement, it's a
kind of prize. It's creating an advance market which would give
incentives to our pharmaceutical industry and the
pharmaceutical firms elsewhere in the rich world to put their
time and energy into developing vaccines. At the moment,
because the markets for these vaccines are so limited by the
poverty of the countries that would benefit from them, the
pharmaceutical firms have no incentive to invest in them. It's
a risky business, and it does take years of R&D in bringing
products to market, as we all know.
At the Center for Global Development, we have laid out the
specifics of how an advance market could be created in legal
terms and contractual terms with industry people, with lawyers,
and with economists how this kind of advance market mechanism
could be created. I urge the Congress to urge the
administration, at the least, again, to resolve at the G-8
Summit that this should be looked at very carefully over the
next year. There's also a pilot program which could be
supported more immediately for production of vaccines, which
exist already, but are not being produced in sufficient
quantity, where an advance purchase agreement would ramp up
their production, and make a difference in saving lives in
Africa.
A third area is debt relief. The Commission recommends 100
percent debt relief for low-income countries in Africa. At our
center, we have made a more specific proposal, which I would
hope the administration and Congress would support, which would
be for 100 percent debt relief immediately to all countries in
Africa and elsewhere with income per capita below $500, and
going forward, only grant aid, grant transfers from the World
Bank from the IDA window, as opposed to lending. This would be
consistent with proposals that the Bush administration has
already made, it would allow us to move quickly to 100 percent
debt relief for a specific set of countries, and it would
incorporate the view that, I think, is reasonable that for
those poor countries which have not yet grown, they should
receive grants only until their income per capita exceeds the
amount which suggests that they're succeeding in growing, and
they would be able to pay back debt.
I also would urge the Congress to consider seriously the
proposal for highly limited sales of IMF gold used, for
example, they are these very poor countries that have had 100
percent debt relief. The need to compensate them is, if there's
a price commodity shock, or if they suffer from a drought, or
another weather shock, is vital to create the environment for
their local, private investors to have confidence, to take
risks, and to be entrepreneurs in larger and larger forums, as
Mr. Thiam indicated.
Fourth area is trade, AGOA is making a difference already,
as Senator Lugar mentioned in his opening remarks. We advocate,
very strongly, that AGOA be locked in for at least 10 years,
again, in order to create an environment of confidence for the
business sector, and that the difficult and complicated rules
of origin set up in the AGOA act be addressed more frontally.
And, finally, on the aid system for Africa, I would like to
see it be more multilateral, to have more emphasis on results
and evaluation on results, and more emphasis on regional
infrastructure and capacity building. These are areas where the
United States could go to the G-8 Summit with some specific
proposals. On more multilateral, I refer to the need to ensure
that not only the U.S. bilateral program to fight the AIDS
pandemic, PEPFAR, but also the multilateral Global Fund to
Fight AIDS, TB, and Malaria, be adequately financed in the next
5 years.
On evaluation results, I refer to the leadership that the
United States could take, perhaps, with help from Paul
Wolfowitz when he goes to the World Bank in pushing for some
kind of club of donors, who would create an entity for
independent third-party evaluation of specific programs. It's
key for us to show the American people what is really working
through aid programs. And on regional infrastructure and
capacity-building, I refer to the particular strength that the
United States could bring to programs of major cross-border
infrastructure. If we think of the success we had across States
with the U.S. Federal Highway Transport System, and the
complications and the challenges even between States that that
represented, I think we could make a major contribution on
major investments in cross-border infrastructure in Africa, and
I would say the same with respect to centers of excellence at
the university level and for research and development.
Thank you very much, Senator Lugar and members of the
committee.
[The prepared statement of Ms. Birdsall follows:]
Prepared Statement of Nancy Birdsall, President, Center for Global
Development, Washington, DC
INTRODUCTION
Senator Lugar, members of the committee, thank you for this
opportunity to appear before the full committee today to talk about the
recent report of the Commission for Africa, ``Our Common Interest.'' I
would like to ask that my full testimony be entered as part of the
record, and I will then briefly summarize my major points.
In 2001, I helped found the Center for Global Development, an
independent, nonpartisan think tank based in Washington, DC, that is
dedicated to improving the policies of the rich countries vis-a-vis the
poorest countries in the world. I am particularly pleased today to
comment on the Commission's report--and to clarify what I think it
means for the United States--because the Commission's report is such an
eloquent exposition of what rich countries can do for their poor
counterparts in the developing world.
If I might, I would like to take this opportunity to thank Nancy
Kassebaum Baker, who was once a member of this distinguished committee,
and Tidjane Thiam for the work that they and their fellow Commissioners
have done under the leadership of British Prime Minister Tony Blair.
As you know, all of us in the room have a tremendous opportunity to
make progress in the fight against global poverty this year. Two
thousand five is referred to by many as the ``Year of Development,''
thanks in part to the work of the Africa Commission, but also thanks to
a number of other mutually reinforcing commissions, events, and
milestones. In January, this year, the United Nations Millennium
Project--under the leadership of Jeffrey Sachs--issued a 14-volume
report on what actions are needed if we are to meet a series of
international goals to reduce poverty, curb disease, and tackle
underdevelopment called the Millennium Development Goals (MDGs). In
July, the United Kingdom will host the annual G-8 Summit in Gleneagles,
Scotland--an event which will focus on development first and foremost.
Moving to September, heads of state from 191 countries will convene
in New York, on the floor of the General Assembly, to assess
international progress on development, security, and human rights and
chart a way forward on the difficult issues of U.N. reform. Finally in
December, the next round of WTO ministerial-level trade talks will take
place in Hong Kong, where, hopefully, the world will take concrete
steps toward a multilateral trading system that is more friendly to
developing countries.
This unusual confluence of events and increased global attention to
development reflects the deepening recognition--among national
officials, international organizations, and throughout civil society--
that the changes wrought by the new wave of globalization make reducing
poverty and global inequality more possible, more compelling, and more
necessary than ever. The United States, as the world's only superpower
and leading ``shareholder'' in the international financial institutions
and the United Nations, has a particular responsibility and an interest
to help move the development project forward. I do not need to remind
the members of this committee that nowhere is this needed more than in
sub-Saharan Africa.
In my remaining time, I will comment briefly on progress in Africa,
as reflected in the report of the Commission, then on several of the
Commission's key recommendations, and finally on the nature and kind of
support the United States should signal for Africa's development at the
upcoming G-8 Summit.
A TIMELY REPORT, IN THE RIGHT SPIRIT
The spirit of the report and the depth of its analysis should be
warmly welcomed. The report emphasizes the mutual responsibility--of
Africans and their governments to build sound and accountable
government institutions, and of the rich world to provide greater
opportunities and more aid. It incorporates lessons of the last 15
years on the need for help from outside to come in the form of
solidarity and partnership across the board, with respect to trade and
peacekeeping as well as additional aid, and for aid to be not merely
higher in quantity, but ``better'': More predictable, untied, in the
form of debt relief and grants, and most of all supportive of capable
and committed governments' own priorities.
The report is timely because it builds on a decade of considerable
success, in at least some countries in Africa, in many arenas:
Unprecedented (by historic standards in the West and in Asia) increases
in educational opportunities and access to basic health care, newfound
macroeconomic stability, and in such countries as Mozambique, Ghana,
and Uganda, steady per capita growth. These classic development
successes have been accompanied by, and reinforced on, the security and
political fronts. Though conflicts persist, many have been resolved
thanks to leadership within Africa, and today Africa has a dozen
working democracies compared to just three a decade ago.
COMMENTS ON SOME KEY RECOMMENDATIONS
The package approach. The report emphasizes the need for Africans
to attack their problems on multiple fronts at once: Trade, investment
in people, infrastructure, and the nitty gritty of improving government
budget management and accountability. This provides a rationale for the
proposed major increase in aid for Africa. Yet even the more competent
governments in Africa have limited capacity to manage simultaneously
multiple new investments and social delivery programs as well as better
auditing, introducing the rule of law, undertaking judicial reform and
so on. Their biggest challenge may well be to set priorities in the
deployment of their scarce administrative resources--which large
infusions of new aid cannot easily ``buy.'' Fortunately, the experience
of successful countries--Korea, India, Chile--is that doing a few
things right, in particular to encourage local private investment, can
trigger a sustained growth process; and that avoiding privileging
insiders (i.e. getting the politics reasonably right) goes a long way
to ensuring that the poor capture some of the resulting growth gains.
The hard part is deciding on those initial ``few things.'' They
have to be invented and led locally, by leadership that is savvy about
local institutional and political openings (and constraints). In Ghana
investing in rural roads may be the quickest route to raising girls'
education--by increasing rural incomes and reducing costs of transport
to markets. In Ethiopia, education, agriculture and AIDS programs may
depend more than anything else on implementing per capita block
transfers to new local governments. In Mozambique, the most critical
next step may be to address the regulatory and banking problems that
reduce access to credit for the working poor.
Another $50 billion in annual aid transfers. The Commission's
proposed increases in aid are trivial in terms of the rich world's
wealth, and are well below amounts other countries received at critical
moments in their development. South Korea received nearly $100 per
person (in today's dollars) in annual aid between 1955 and 1972.
Botswana, the world's single fastest growing country between 1965 and
1995, received annual aid flows averaging $127 per person. (It did so
by combining rapid expansion of diamond exports with exceptionally good
governance.) By contrast, annual assistance to sub-Saharan Africa today
averages about $28 per person--not nearly enough to build a foundation
for sustained growth and development.
However, it is not clear that the Commissioners grappled fully with
the question of at what speed the large increases proposed can be used
effectively. (The proposal is to increase aid flows by $25 billion
annually between now and 2010, and then assuming reasonable results, to
add another $25 billion annually. This would eventually triple total
annual aid inflows to sub-Saharan Africa from the current level of
about $25 billion from all sources. The emphasis on the need for
recipient governments to be accountable if aid is to be effective is
highly welcome and sensible. One problem is that that emphasis is
already heavily reflected in donor allocations across countries within
Africa. In the best-performing countries, aid, as a proportion of GDP,
is currently more than 20 percent of gross national income in Malawi,
Mozambique, and Ethiopia, and more than 15 percent in Uganda, Tanzania,
and Rwanda (in both cases, among others). It is about 12 percent of GNI
in Ghana. In most countries, aid finances virtually all new public
investment. In the seven countries in sub-Saharan Africa now eligible
for assistance under the Millennium Challenge Account (MCA), aid is
currently between 6 percent (Lesotho) and 25 percent (Mozambique) of
GNI, and is likely to increase further as they benefit from the MCA.
There are risks in rapid infusions of new aid. These risks include
reducing the receiving country's ability to compete in export markets
(if aid puts upward pressure on exchange rates or induces people to
leave productive private businesses to work in government and aid-
financed public programs), overwhelming fragile preventive health
efforts and road maintenance programs as attention shifts to new
investments, and in the worst case, creating new pressures for
corruption and patronage as procurement and expenditure management
break down. My concern is not with the amount recommended in itself,
but with the timing, with our limited understanding of the risks in the
aid community, and with the resulting need for much greater attention
to minimizing and managing those risks.
In addition, the report does not make explicit the logic of
different amounts of aid for different countries, depending on country
governance. Some countries have the leadership and competence to use
aid well; others have honest and reformist leadership but limited
capacity; still others have leadership that is unwilling and in the
worst cases deeply corrupt. The Millennium Challenge Account, for
example, promises ample aid to those countries most likely to use aid
well. (The report does note the logic of different types of aid for
different countries, depending on their governance, making the point
for example that countries performing well, in terms of governance and
macroeconomic stability, should be able to benefit from direct donor
support for their own expenditures across the board (``budget
support'')).
The regionalism challenge. The economy of all of sub-Saharan
Africa, including South Africa, is slightly smaller than the economy of
Chicago. Imagine Chicago with more than 40 ``mayors'' and Ministers of
Education and public works, more than 40 tariff regimes and customs
rules and barriers, and restrictions on movement of workers from one
neighborhood to another. The Commission puts welcome emphasis on the
role of such African organizations as NEPAD and the African Union--in
defining regional priorities, in managing peacekeeping operations, and
so on. In its recommendations on trade, the Commission does not shy
from pushing for reduction of the tariff and other barriers which
inhibit trade within Africa. It may not go far enough, however, in
emphasizing the potential benefits to Africa of developing regional and
subregional centers of excellence--for agricultural research,
university training, policy advice and review among peer governments--
among other reasons as a mechanism to encourage a return of the African
diaspora to the continent and discourage the ongoing hemorrhage of
Africans' most skilled and educated people to the rich world. The
report sets out the need for as much as $20 billion a year in new
infrastructure investments in the region, especially to encourage
exploitation of export potential; much of this new infrastructure
investment will have to be done across borders, and will require the
kind of difficult coordination and negotiations that among our U.S.
States helped bring to fruition the U.S. Federal Highway System.
THE UNITED STATES CONTRIBUTION AT THE G-8 SUMMIT
Peace and security in Africa. The Commission emphasized the
importance of peace and security in Africa, and the critical need for
donors to support the emerging African peace and security
infrastructure, particularly by strengthening the African Union (AU).
However, the report does not directly address the broader challenge of
building state institutions in weak and fragile states (those states
that have not yet ``failed'' but are at risk of doing so). On this
broader challenge, the United States could take several immediate
steps, while urging its G-8 participants to follow suit.\1\
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\1\ Commission on Weak States and U.S. National Security, ``On the
Brink: Weak States and U.S. National Security,'' Washington, DC, Center
for Global Development, 2004. Available at: http://www.cgdev.org/
weakstates.
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First, the administration and Congress should work together to
fully support and finance the new Office for Reconstruction and
Stabilization within the State Department. This office is charged with
coordinating U.S. efforts to address the threats posed by weak and
failing states, and seize quickly the windows of opportunity to support
their recovery and stabilization. Its creation stems from a forward-
looking 2004 legislative initiative of Senators Lugar and Biden. I want
to commend their leadership in this important and heretofore neglected
area.
Second, the United States could take increased leadership with its
G-8 partners in building up the African peace and security architecture
of the AU and the respective regional and subregional entities that
will, ultimately, be responsible for responding to, and hopefully
preventing, the next Darfur, Rwanda, or Congo. As a first step, the
United States should maintain and increase its level of support for the
Global Peace Operations Initiative, a G-8 plan to train 75,000
peacekeepers, a majority of them African, by the year 2010. I
understand that Congress approved just over $100 million for this
program in fiscal year 2005, and that the administration has requested
another $114 million for fiscal year 2006. These sums should be seen as
only a downpayment. I urge the administration to work with Congress to
increase support for this initiative, and to work with our G-8 partners
to follow through on their commitments as well, in a coordinated,
coherent, and timely manner.
Malaria and AIDS vaccines. A good portion of aid to Africa--
certainly on the order of $5 billion a year--could best be spent
outside Africa, where absorption constraints will not bind.\2\ How?
Africa and other poor regions constitute poor markets, and because of
their poverty, private companies, including in the United States, have
little incentive to create the technologies that are relevant
specifically to them. African countries are poor because of limited
technological opportunities (for rain-fed agriculture in Africa's soil
conditions, for example), but in turn these opportunities are difficult
to create because of the region's low income. The research that led to
the Green Revolution in Asia was almost wholly publicly funded. It
yielded among the highest economic returns of any development
investment.
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\2\ See also Jagdish Bhagwati, ``A Chance to Lift the `Aid Curse,'
'' The Wall Street Journal, March 22, 2005.
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In health, the problem is particularly acute, as lives are
literally at stake. An estimated 90 percent of all research undertaken
by rich country pharmaceutical firms is on diseases prevalent in the
rich world--that affect less than 10 percent of the world's population.
Rich country governments can address this problem in a simple yet
powerful way. They can make a legally binding promise to reward the
creation of new technologies, be it via ``prizes'' or via agreements to
purchase a fixed amount of the resulting product or process. With such
a promise, the rich world would guarantee a minimum financial return to
research undertaken by private firms for the benefit of developing
countries.
The financial and legal outline of this kind of advance market
mechanism, at an estimated cost of $3 billion, has recently been
developed for the case of a malaria vaccine.\3\ The United Kingdom has
proposed creation of such a mechanism on a pilot basis for the
immediate guaranteed purchase of undersupplied immunizations, and to
create a similar advance market for an AIDS as well as a malaria
vaccine. The Bush administration could signal its support at the G-8
Summit for the United Kingdom proposal by indicating its willingness to
explore with Congress how to provide United States financial support
for such a mechanism, and by urging that such explorations be made in
the other G-8 countries and reported on at next year's summit.
---------------------------------------------------------------------------
\3\ The proposal and its legal, financial, and budget implications
are set out in Ruth Levine, Michael Kremer, and Alice Albright,
``Making Markets for Vaccines: Ideas to Action,'' Washington, DC,
Center for Global Development, 2005. Available at: http://
www.cgdev.org/publications/vaccine/.
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Debt relief. The Commission on Africa recommends 100-percent debt
relief for all ``low-income countries'' in Africa. My colleagues and I
have elsewhere proposed that countries with per capita income below
$500 (many of which are in Africa) receive 100-percent debt relief,
including from multilateral as well as bilateral debts), and that they
receive only grant transfers from the World Bank and the African
Development Bank--until their income grows beyond $500.\4\ The United
States could bring this simple and straightforward proposal to the G-8
Summit. Agreement on it would resolve the still prickly controversy
between the United States and Europe on use of IDA resources for
grants, while reflecting the widespread congressional and public
support in the United States for debt relief programs. The United
States could also support highly limited sales of IMF gold to cover the
IMF debt write-down, and could propose limited use of gold or
contributions from donors to ensure that the IMF could assist the
poorest countries that have had debt relief to manage weather,
commodity price, and other shocks, over a limited time period.\5\
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\4\ See Nancy Birdsall and John Williamson, ``Gold for Debt: What's
New and What Next?'', CGD Note, 2005. Available at: http://
www.cgdev.org/docs/CGD%20Note_IMF%20Gold.pdf; and Steve Radelet,
``Grants or Loans? How Should the World Bank Distribute Funds to the
World's Poorest Countries?'', CGD Note, forthcoming.
\5\ Nancy Birdsall and John Williamson, ``Delivering on Debt
Relief,'' Washington, DC, Center for Global Development, 2002.
Available at: http://www.cgdev.org/Publications/index.cfm?
PubID=42; see also Nancy Birdsall and Brian Deese, ``Delivering on Debt
Relief,'' CGD Policy Brief, 2002. Available at: http://www.cgdev.org/
Publications/?PubID=31.
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Strengthening AGOA and locking in aid to support trade adjustment
and address preference erosion. The Commission includes an excellent
set of recommendations for changes in the trade regimes of African
countries themselves, to encourage more trade within the region, and in
the advanced economies. The United States will already be looked to for
continued leadership on pushing forward the multilateral Doha round. At
the center, we have recommended that in addition: (1) The Congress
extend current AGOA preferences for at least a decade, and (2)
eliminate the complicated and burdensome rules of origin treatment.\6\
AGOA has contributed to increases in apparel and other exports (and in
jobs, for example from 10,000 to almost 40,000 in Kenya in apparel)
from some African countries (though with recent worrying signs of a
leveling off with the end of the quota protection under the Multi Fibre
Agreement). Its effectiveness, however, is limited since it is
perceived as easily revocable for any one country on the part of the
United States, and because of its complexity. (The proposed ``Trade Act
of 2005'' introduced by Senators Baucus, Feinstein, Santorum, and Smith
would address these points in part.) In addition, the United States, as
a longtime leader in trade liberalization and trade capacity-building
and adjustment help, could propose at the G-8 Summit that simple
guidelines be developed, under the rubric of the WTO, for assistance to
Africa tied to reduced fiscal income as tariffs decline, and to
temporary adjustment problems with job declines in sectors affected by
preference erosion.
---------------------------------------------------------------------------
\6\ William R. Cline, ``Trading Up: Strengthening AGOA's
Development Potential,'' CGD Policy Brief, 2003. Available at: http://
www.cdev.org/Publications/index.cfm?PubID=88.
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Aid to Africa: More multilateral; more evaluation of results; more
emphasis on regional infrastructure and capacity building. At the G-8
Summit the United States should emphasize the importance of improving
the quality of aid to Africa. In addition to the ideas included in the
Commission report, emphasis is needed in three areas.
First, the G-8 should agree to maximize new donor contributions
through multilateral channels, which are less subject to political and
other sources of volatility and less burdensome on recipient countries
than the multiplicity of programs, rules, protocols and negotiations
implied by the many different bilateral programs, including those of
the United States. Multilateral agencies include, of course, the World
Bank, and in the critical fight against AIDS in Africa, the Global Fund
to Fight Aids, TB, and Malaria. Second, as the champion of aid
effectiveness and results-based aid, the United States should begin
discussion with its G-8 partners on the creation of a completely
independent evaluation system for assessing and reporting publicly on
the effectiveness of aid-funded programs in Africa--funded by all
sources. Independent evaluation of aid programs has been a constant
recommendation of various independent and congressionally mandated
commissions over the last decade. Becoming serious and systematic about
such evaluation is particularly critical if the case is to be made for
sustaining the increases in transfers to Africa that the Commission
envisions beyond the next several years. Third, the United States
should focus any additional aid to Africa on support for regional
centers of excellence and for major investments in cross-border
infrastructure since these are areas where the United States has
particular strength.
The Chairman. We thank you very much, Ms. Birdsall, we
appreciate that comprehensive report, and likewise specific
suggestions.
We'll now have questions. We'll have a 10-minute round, and
then after we've completed that, perhaps a second 10-minute
round. Let me begin the questioning by asking you, Senator
Kassebaum Baker, from your experience as a person in
government, quite a part from your membership in this
Commission, just consider for a moment most of the intervention
by the administration. I credit President Clinton and former
First Lady, now Senator Hillary Clinton, for initiatives at the
White House that led to a consideration that became AGOA. I
also recall considerable debate we had last year on its
extension. I take Ms. Birdsall's point seriously. It should be
extended for 10 years. Obviously, one reason for fighting for
it last year was the uncertainty that faced all these new
enterprises in Africa, but the Congress doesn't often work in
10-year periods of time. Uncertainty may be a factor in
business. It is in politics, too.
We have the AIDS situation, which President Bush's
administration pushed very, very hard, but there has been a
difficult parliamentary struggle. First of all, you've got the
idea, and then you struggle to implement the moneys. Some would
feel the promise of the $15 billion, by $3 billion a year,
hasn't been received, although we're certainly moving in that
direction. Likewise, there has been some rivalry, although I
think subdued, with the United Nations activities in the same
area. There have been problems trying to come to grips with all
of the constituencies that are interested in African issues,
quite apart from its priority of Africa, vis-a-vis other things
going on in the world.
Senator Kassebaum Baker, as you take a look at this, what
reaction, if any, has the administration had to this report,
thus far? Maybe this is too early to raise that question. Maybe
they're still studying it, trying to think it through. What can
we anticipate in the instructions that President Bush may give
to the delegates as they approach the G-8 meeting? What sort of
support has there been for the initiative of Prime Minister
Blair or any of the points that you have made today? In other
words, what is the political framework that faces us as we try
to implement whatever comes out of G-8?
Senator Kassebaum Baker. Thank you, Mr. Chairman.
As you well know, it isn't easy, and I think we're all
realists in knowing that, as you say, the argument can come
each year on whether some things are going to be reauthorized
or appropriated. Regarding this report, I want to emphasis
again, we were all independent of our governments. And some of
us didn't agree with all aspects of the report, either. But it
was a consensus that was put together. As far as knowing what--
I tend to believe in my conversations with some of the
participants that will be representing us and working with
President Bush for the G-8, that they feel it's very important
to lend support to Prime Minister Blair's efforts on Africa.
President Bush feels the same way, as I mentioned, in wanting
to see success there in, I think, as far as specific things,
I'm not sure. Last year they addressed some initiatives at the
Sea Island meeting in Georgia. I think that on the whole those
will be reiterated, and support for those would continue. Other
than that, I hesitate to say.
The Chairman. So, the jury is still out in terms of the
specifics.
Senator Kassebaum Baker. Yes, I do think so, in terms of
the specifics, and I'm not sure that I would know what they
were. I would just add that I think, though, what is important
is, what can be helpful are hearings such as this, and a voice
such as yours, where one, we are laying out the many positive
things that are being done, is also to take a look at it as if
you would, as maybe Senator Martinez and Senator Feingold in
the subcommittee structure, of what you might believe is some
important message to come from this. I mentioned that maybe
it's a good idea to pick a couple out, to lend emphasis to, so
that it enhances the debate. Now, whether that reaches the
level of the G-8 taking any action, I doubt, but I think that
just that could lend some support to a momentum for some
direction, whether it's in peace and security, whether it's
better coordination. Of course, I can remember way back when I
was on the committee, I used to argue that for a long, long
time, and it never seems to take hold. Everybody talks about
it, but nobody wants to be in charge of coordination. And how
we get at that, I'm not sure, unless the point is reached that
we recognize it is so crucial to the success of any effort. And
that includes the donor countries working together. It seems to
me it improves the effectiveness of what moneys go if we can
make sure we are not overlapping, that where there needs to be
something addressed, some one group can fill there, what the
host country thinks, and I've talked this over with some of the
administration, and I think everybody's puzzling exactly what
could be done. All I say is that I know Prime Minister Blair
hopes it will be at the top of the agenda, but we can easily be
overtaken by events, and so one never knows.
Not a very successful answer, Mr. Chairman.
The Chairman. Well, it's very helpful. I raise it to you
because you have experience. You've been a fighter for these
issues when you were on this side of the table, as well today,
and it is tough going. One reason we're having the hearing is
because we're applauding the work that the Commission has done.
It's an important report before we get to the G-8. The
administration or anybody else may not pay that much attention,
but, at least, we try to highlight it in our own ways. The
subcommittee likewise will be following through, as will the
full committee.
One way we will be working is an agenda I already had. I
wanted to ask Mr. Thiam about this, and likewise, Ms. Birdsall.
The question is the forgiveness of debt, for example, the
impact of the multinational development banks as they pertain,
not just to African countries, but to other countries as well.
The committee has been deeply in the weeds in this issue,
examining not only the World Bank, but likewise the other
banks, for the very good reason that there have been frequently
inattentive or corrupt governments, or huge debts, so the
people of these countries suffer twice.
First of all, they didn't get the benefit of the loans and
such things, and second, they have all the subsequent debt. And
then third, we come and say, well, it's time to wipe the slate
clean again, and we're back to zero. This is probably
inevitable, but we're trying now to ask even the World Bank,
the most responsible of these, under previous leadership, and
now with Mr. Wolfowitz--what about this? What kind of
mechanisms are there for transparency, recognizing sovereignty?
This is a delicate issue in African states. We've not talked a
great deal today about our public diplomacy, but how do African
states take a look at the United States wading in and looking
down into the crevices of all of these loans? Some governments
may say, ``It's none of your business, we're dealing with the
World Bank, and they've loaned us money for a dam. Now maybe
the dam got built, and maybe it didn't, maybe it flooded all
sorts of people's farms and so forth, but that's not your
concern. It's our concern.'' Have we taken charge? Can you give
us any guidance in this area? This is a relevant issue, I
think, not only for the
G-8, but because of the ongoing situation there.
Mr. Thiam. Thank you, Mr. Chairman.
I think it's an extremely important, sensitive, and complex
issue. I think that to understand it, you ought to distinguish
country by country, because it's very hard to take a position
that would be valid for all countries. You ought to look at
different categories of countries. I believe some countries
have reached a quality of governance that is such that one
could give them the aid in a global manner, letting them
determine their own priorities. However, today, only a
relatively small number of countries in Africa are in that
position. I think we could draw a list of those countries. I
think there should be a reasonable consensus on who they are. I
think these countries should be allowed to go forward, and aid
should be mostly delivered to them as what we call budgetary
support, which allows the government to spend freely on its own
priorities.
I think the other kind of easy case is really the very,
very poor performers, where I think nobody would suggest any
significant increase in aid because there is no capability
there to put that aid to a productive use. The really difficult
are the third category, the ones who are in the middle, neither
very, very well governed, neither terribly governed. And I
think part of the answer is what Nancy Birdsall said, it's
really to diversify the channels by which the aid is delivered
to those countries, and try to go for private/public
partnerships and reach those populations directly. But in
regard to Nancy's concern about debt relief, I really believe
debt relief should be total. I think the one case I knew, which
was Cote d'Ivoire when I was in government, 50 percent of the
budget had to go to debt service, so once you understand that
in government most of your expenditures are salaries, on the
other half all you're doing is paying salaries, and you're
supposed to balance investment with the rest, and the rest is 4
or 5 percent, so, and many, many countries are in the same
situation, so having any kind of meaningful development without
a high level of debt forgiveness I think is hard to imagine.
Debt forgiveness shouldn't mean that the door is closed now on
the future of those countries, and countries should still be
allowed to borrow more money.
Just one comment on that, that's something that I really
feel strongly about, it's about fiscal reform in most African
countries. What's happening in many countries, independent
governments took over after the colonial administration when
government revenue was primarily based on customs. And what
that has done is build a huge corruption machine. We all know
how many custom administration reform programs have been
implemented all over Africa, and most of them have failed. I
think it is very important, politically, that the burden rests
on the citizens, and that progressively, African countries
rebalance the way they raise government revenue from this kind
of very regressive, custom-based system to a much more
efficient taxation which could be low, but based on the
democratic economy, e.g. land tax. Then when the citizens
realize that it is their money that the government is spending,
they will be much more encouraged to actually get involved
politically, and exert much more control on the leaders and
hold them accountable. Actually, I think that issue of tax
reform and fiscal reform in Africa is an important one.
The Chairman. I thank you for that response. I just comment
that this committee takes seriously the need to authorize
money, and to support appropriations for money. We're likely to
be more credible as the multinational bank situation is cleared
up, because we have to authorize our contributions. We're not
the only country contributing, but we are a major factor, and,
therefore, we expect at least some accountability. You've
pointed out only a small number of the countries, but, at
least, the responsibility of the money being used well gives us
some credibility with our constituents, so that we may say in
essence, the money is getting where it is intended. There is
some responsibility and transparency, and so the reforms, both
on our side and on the African side, are important, and that's
one of the things we wanted to illuminate in our hearing.
I want to recognize now, Senator Feingold, for his
questions.
Senator Feingold. Thank you, Mr. Chairman.
I'd like to first invite the Commissioners to comment on
just what they mean when they talk about good governance. How
inclusive is this concept? Are we talking about accountability
and transparency with regard to how donor dollars are spent? Or
are we also talking about genuinely democratic governance--
tolerance of dissent, and respect for the rule of law? Where
does respect for basic human rights fit into the Commission's
vision of good governance, and is there consensus within the
Commission, within Africa, and within the broader donor
community about what this term ``good governance'' really
means?
Senator Kassebaum Baker.
Senator Kassebaum Baker. Thank you, Senator Feingold. I was
actually going to say that Mr. Thiam might want to answer that
first. For myself, I regard good governance as being an
independent judiciary, and an independent parliament and a free
press. I think that's crucial. And I think, actually, if you're
from donor countries, for instance, because you've got the
means within a country to exercise a voice that would be
effective in monitoring that.
But I would like to, perhaps, yield to my colleague who I
think has the experience in Cote d'Ivoire.
Mr. Thiam. Thank you, thank you Senator Feingold.
I would agree with that--I mean, an independent judiciary
and free press and an effective parliament is important. One
issue, I think, that is extremely important also is minority
rights. In a fragmented, very diverse environment, majority
rule simply does not work. The idea that if you have 50 percent
plus one vote, you get 100 percent of the power just cannot
work, and that is something that I think many African
constitutions haven't handled very effectively or very well.
I use an analogy with Europe to get the message across.
Imagine that you would have to elect the President of the
European Union on a one-man, one-vote basis. That would never
work, because the Portuguese will tell you, ``Well, he's been
elected by a combination of French, British, and German, and I
don't recognize myself in this man.'' Now you look at the
heterogeneity that you have in many African countries, it is
very high. The one-man, one-vote system in many, many places
just leads to very, very serious issues, unless the rights of
minorities are explicitly protected in the constitution. I
really believe that encouraging African constitutions to move
in that direction will go a long way toward resolving current
issues.
Senator Feingold. If the Commission's recommendations were
implemented, as I understand it, African governments would
receive a substantial increase in foreign assistance, that they
would have substantial flexibility to use. Does empowering the
state to this degree risk weakening the relative power of
African civil society? And if a stronger civil society is the
key to demand-driven good governance, does this assistance
actually, possibly risk undercutting some of the Commission's
core goals? What can and should be done within the framework of
the Commission's recommendation, to ensure that aid helps to
actually strengthen civil society?
Senator Kassebaum Baker.
Senator Kassebaum Baker. I have some, perhaps, reserved
views on giving, who's going to monitor and who's going to give
and who's going to receive the aid. I personally have some
problems just saying education money should go to the
government. I personally believe it works better if it is a
partnership of the government with private fund foundations or
NGOs or our own financing facilities like World Bank.
I think you need to be specific, if we're indeed engaged in
aid of that sort. Large amounts of money, I think, aren't
productive, or effectively used unless there is a goal and a
network with which it's delivered. I don't think it can be
sustained if, indeed, you're looking at money that, say, would
be going to Uganda, unless you've got a working group there
that includes the civil society, that includes the others that
work, but somebody who is in charge, in the government, who has
firmly been involved in working out the plans to sustain it,
whether it's a health minister, for instance, or someone like
that. I think just giving it to the government to say, ``This
is for education,'' and I'm making it sound too simple, but in
my mind that doesn't work.
Senator Feingold. Thank you, Senator. Mr. Thiam, do you
want to comment on that? Okay.
The Commission report emphasizes the importance of conflict
prevention, and of course, I wholeheartedly agree. What kind of
increased spending on diplomatic presence might be necessary
for the United States to meaningfully implement this
recommendation? Senator, I know you and I have both had the
experience, and I'm sure the chairman has, of visiting
seriously understaffed, sometimes seriously underfinanced U.S.
diplomatic posts in Africa, I think we need to be more serious
about our presence in order to engage in the kind of conflict
prevention that could help avert crisis and keep things on
track. Do you agree, and how should this need be balanced with
a call for more assistance resources?
Senator Kassebaum Baker. Well, I do agree, I think now
being in Tokyo in the U.S. Embassy, I certainly value the work
of the Foreign Service, and I personally believe that the
presence there can be very valuable, if you have an active
Embassy and Foreign Service officers who are out in the
community. I hate, because of our fears, that we become more
withdrawn because it's absolutely essential to know what's
going on, and to be engaged in the country as a whole, and I
really think Dr. Birdsall and Mr. Thiam would agree with that,
that you can't know what's going on if you're not out there and
you can't rely on just people coming to you and telling you,
``This is what we think.'' You get a sense of what's going on,
and it's very important to be engaged that way. It's become
harder because of the dangers that have been posed, and we're
never sure, but on the other hand, I think it's important. As I
say, I wish we would look at some new initiatives, perhaps,
that we could be engaged in trying to get some control over the
small arms market. Africa's flooded with small arms, and it's a
real concern to Africans.
Senator Feingold. Do you want to comment, Mr. Thiam?
Mr. Thiam. Just quickly, I believe it's very important to
increase that presence, and we've given some numbers in the
reports, and figures on the costs of these crises in terms of
lost lives and lost production and aid, actually, that has to
be mobilized to rebuilding, and we're talking billions of
dollars in each case. Whereas, the kind of preventative
intervention we are talking about is much cheaper, and
objectively you're talking putting tens of millions of dollars,
or even billions, and I think that's money that could be very
well spent in intelligence, mediation, in prevention to head
off these crises.
Senator Feingold. Ms. Birdsall, did you want to comment?
Ms. Birdsall. Yes, if I may, on the specific issue, I would
certainly endorse the idea that it's relatively inexpensive
compared to other inputs to have as substantial presence as
possible in our Embassies. I think, however, at the same time
that the critical issue for weak and fragile states in Africa,
those who are emerging from conflict, and those who are
interagency approach to be more effective. We do not really
have an overall coherent strategic view in terms of how to deal
with both rapid response to opportunities to be helpful, when
there's an opening, when a new reformist government comes in,
and response when there are rising risks. And that has to be a
combination of more strength at the Embassy level, on the
ground, but more interaction of the NSC, USAID, Millennium
Challenge Corporation, the Pentagon, the Office of
Reconstruction and Stabilization at the State Department, et
cetera, et cetera.
The center issued a report last year on weak and fragile
states, not only in Africa, and one of our major
recommendations was there be a rethinking of how the U.S.
Government could be more effective and more strategic in
dealing with more than 50 states in the world which are weak in
some respect.
I wonder if I could just say a word, going back to Senator
Lugar's question about the debt, and make two comments. The
first is that, as you all know, there has been a long and
fractious, and in some respects silly, debate between the
United States and the Europeans over the issue of debt and
grant for the future. I think Senator Lugar called it ``inside
baseball.'' There is an opportunity now to rise above that,
there's tremendous overall consensus, frankly, about the
fundamental issue. There's tremendous support on all sides in
the United States and in Europe, so this is an area where it is
possible for the administration at the G-8 Summit to push our
partners to some sort of a real deal, a conclusion that's
visible and which countries, which are eligible, have already
been deemed eligible for the HIPC program of the World Bank and
the IMF. They have already been pronounced as having reasonably
good governance and good economic management. Those countries,
if they are also very poor, and have a lot of multilateral
debt, it just will wipe the slate clean to write off that debt,
finally, completely. And their Ministers of Finance will then
have an incentive both to increase revenue collection from
reasonable taxes, and to have control over the use of those
revenues to set their own priorities. Now they have the problem
that the taxes they collect go for debt service, and what they
get in return is not revenue that is easily allocated, they get
hundreds of different projects, hundreds of different missions
from the World Bank, from the United States and from U.N.
agencies. So, if they are clearly having good management, then
we can--they and we can see a kind of accountability in their
use of their own revenue, once their debt has been eliminated.
I think in this respect, the remarks of the Senators, both--all
of you--on the question of whether it's working, the United
States could also take leadership in defining some kind of
independent approach to evaluation of these different donor
efforts, including debt relief, so that we can tell the
taxpayers in the United States and elsewhere, what has worked
and what hasn't worked. But to do that requires real
leadership, because we don't have that kind of independent
entity at the moment.
The Chairman. Thank you very much, Senator Feingold. The
Chair recognizes Senator Obama. Let me just mention that
Senator Martinez has briefly left us for a vote in the Energy
Committee markup. He apologizes for missing this particular
round, but it's a pleasure to have Senator Obama on hand.
Senator Obama. Thank you very much, Mr. Chairman, I
apologize for being tardy, but I had a chance to read
everybody's statements. This is an especially welcome
opportunity for me, not only because, obviously, my father was
from Africa, but my mom was from Kansas, so it's a great
combination.
Senator Kassebaum Baker. It's a great combination.
[Laughter.]
Senator Obama. I've been an admirer for many years, so I
appreciate the opportunity to speak with you.
Let me preface my remarks just by indicating how impressed
I am by the work of the Commission, as well as the willingness
of the Blair government to spend its political capital on this,
I think it's absolutely critical, and all of you are to be
commended.
And I'm pleased that there is a recognition that what is
happening in Africa is unique, in some respects. You take a
look at a country, like my father's country, Kenya. In 1961
when I was born, the levels of development in Kenya were
probably on par with South Korea, maybe even slightly ahead of
South Korea. Obviously that's not something that could be said
today, and this indicates lost decades of opportunity for men
and women and children on the continent.
It's also important to note that when we're talking about
issues like HIV/AIDS or crushing poverty, those aren't
restricted to Africa. To the extent that our overall United
States foreign policy thinks in terms of how we're going to be
addressing some of these long-term global challenges, I think
Africa inevitably is helped. At the same time it's appropriate
for us to focus, in particular, on Africa because if we can
figure out things that work there, then some of those lessons
can be taken to other countries.
A couple of areas that I just wanted to explore with you
that have already been touched on. The issue of security--I'm
wondering, and I don't know which one of you wants to address
this--whether there are particular recommendations or
structures, whether that's the African Union, involvement with
NATO, particular approaches that the Commission thinks are
appropriate in thinking about security and regional conflict in
Africa. And the reason I say this, it's already been noted in
the Commission report and some of the statements that have been
made earlier--we can not foster any meaningful development as
we're seeing in portions of Iraq right now, in the absence of
basic security. And this is obviously a delicate topic, because
the question of whether international security forces are
involved in a country's internal conflicts, particularly when
it's a Western country, coming into an African country is
always sensitive, but I just don't see how we end up moving
aggressively on these goals without slipping backward, if we
don't have some basic security infrastructure in place. So, I'm
wondering, Mr. Thiam, if maybe that's something you want to
address or are there other mechanisms that you think need to be
a part of this process?
Mr. Thiam. Thank you, Senator. With your permission I'll
address the question, and if Senator Kassebaum Baker would like
to comment, too, because we together worked on that specific
issue as Commissioners, peace and security. If you'll allow me,
maybe, I will tell you why I decided to work on this issue in
the Commission. It's because, in December 1999, I got a very
nice letter from the World Economic Forum telling me we're
nominating a dream cabinet every year, and you are one of the
12 Ministers in the world nominated, and you should come to get
your award in January 2000. I never made it, because there was
a military coup in between, so that's just made me more
sensitive.
Senator Obama. It underscored the fact that you needed to
address these problems.
Mr. Thiam. So, that was relatively unique, more seriously,
I think what we're saying is really that we have to work with
the African Union, and also recognize that it is a less than
perfect organization today, but it's a reflection of some of
the weaknesses that we've been commenting on regarding African
states, but it is the only organization we have. It is the
closest to the issues, and I think it's the best able to
intervene, so the capability of the AU to intervene when the
fighting starts and there is a violent conflict underway, I
think, is critical. What went on before is interesting, there
have been a lot of assessments of what the AU has been doing,
but I think there is certainly a recognition now in the AU that
we need it to move from the noninterference principle, to a
nonindifference principle, and on Africa-initiated, Africa-
supported need for intervention, and I think we need to
strengthen its capabilities, logistically providing transport
and all kinds of support so that interventions are more
effective.
The other way we can make progress is on the arms trade. I
don't believe that there is one machine gun produced or
manufactured in Africa, so this is a big, big, big issue around
the arms trade, and the trade around small arms. And there's
one specific area there which is the brokerage--sorry, it's my
English, I'm French-speaking originally.
Senator Obama. No, no, no. I promise you, your English is
better than my French.
Mr. Thiam. I believe the United States has a very strict
legislation in that respect, to control the brokerage of arms,
but that is not the case on the international level, and there
is a clear gap there that needs to be filled. So, we've
recommended an arms trade treaty, and we think that can be a
very effective way to deal with that. And there is also a whole
series of measures around conflict goods. People can sell their
natural resources and use the revenues to finance a rebellion
or a conflict somewhere, all that--I work for an insurance
company--all that can be controlled today very effectively by
the international financial system, so I think there is much
the United States can do to make life more difficult for people
who want to start an armed conflict anywhere in Africa. Today
you can start a civil war anywhere in Africa for $5 or $10
million.
Senator Obama. I would be very interested to hear your
recommendations on this subject.
I'm wondering about something that, Senator, you may want
to touch on this as well. Is your assessment, based on your
interactions with some of the countries that are participating
in the African Union, that there's sufficient commitment from
the member states to welcome significant investment in the
African Union, along with coordination with NATO, for example,
on training, or other strategies? Are we at a point in time
where the organization is solid and stable and the members are
invested enough that we should be making a larger investment?
Senator Kassebaum Baker. Well, sometimes, as you know
Senator Obama, you have to take risks, and I think this is one
that we have to take. It seems to me it holds the potential, I
would say it has support of the African nations, I think that's
not in question. There is some, probably, tension between
NEPAD, which of course, is part of the African Union, but I
think it still has to show that there's a strength, I think
they've come together recently in Darfur, although limited, I
think, it shows that they were standing up and taking some
necessary steps forward, and I happen to believe it is going to
work, and I think we need to give it the support, because I
don't see anything else there that holds quite the same
opportunity in the way that it does.
Senator Obama. I have a couple of other questions. My
mother actually did a lot of international work focused on
women. I understand that a measure of how well we do with
respect to development strategies is how well we're educating
women, increasing their literacy, and allowing them to enter
into the commercial sphere. I'm wondering if that was something
that was noted by the Commission?
Senator Kassebaum Baker. It is, and I will just say that
all three of us addressed that and feel strongly. I, myself,
would like to see more radio utilized by women, in programs
that could talk about health care, and education, and you
mentioned, education as such is an inexpensive way to talk
about how to take care of children, and nutrition education,
but a women's radio network that can reach a lot of people,
because their interests are rooted in community and family, and
really in many countries, they're mainly engaged in
agriculture.
Senator Obama. Right, that's an interesting point.
Senator Kassebaum Baker. I think it is something that I
believe has real potential to, with little money, encourage the
voices of women to be a part of the process.
Senator Obama. Mr. Chairman, I know my time is up, are we
going to have a second round?
The Chairman. Yes.
Senator Obama. I'll follow up on some questions then.
The Chairman. Thank you very much, Senator Obama.
Let me return to something that was touched upon, but not
explored in our earlier questions, and that is a point that you
outlined, Ms. Birdsall, about the vaccines. You pointed out,
correctly, that many American pharmaceutical companies that
deal with these endemic diseases are not really sure where the
market is. How will they get paid for all of the inoculations
and shots and whatever is required? And, so on the one hand,
the world looks at this and says, this is not the way life is
supposed to be. If there are life-saving devices, surely
somebody ought to be willing to come to the rescue. But on the
other hand private firms have said, ``Well, not necessarily
us.''
Now, you've outlined an idea here which I think is an
important one, and hopefully will be a part of the discussion
at the G-8, and that is, is there some sort of advanced
package, or some promise at the end of the rainbow? If you do
the research and you have millions, tens of millions of orders
for this, to save lives in Africa and elsewhere, there is some
value in doing the years of research, including maybe tens of
millions of dollars or more that's required to do this. For the
moment, organizations like the Gates Foundation have entered
into this, mercifully, and this is one of the remarkable things
about our world--that private wealth has created these large
entities that are nongovernmental, that can go wherever needs
may be found. One thing we've tried to do in this committee is
to applaud, specifically, the Gates Foundation and their work,
and even to think now about some type of antidote for HIV/AIDS,
which has sort of been beyond the pale thus far of successful
research. It will take a lot of money, and they're providing a
lot of money.
As you have outlined this idea, is there any receptivity,
given the fact that there's going to be an international
meeting that involves the United States, but also involves
other large organizations on an international basis? What if
the G-8 countries said, ``Well, we're willing to accept our
part of this situation''? How do you form an organization to
handle the amounts of money that are required to provide this
fund that induces the tens of millions of research on the part
of somebody? How do you assign who does the research? Do you
wait for volunteers? I'm just eager to hear. You must have
given some thought to this, or somebody has. It is a
tremendously important idea. Otherwise we're going to be back
to the Gates Foundation, and they will probably get somewhere
at some point, and then the question will be, who pays for all
the serum, or those who administer, and so forth? Can you
enlighten us any more?
Ms. Birdsall. Right, I'd be delighted to say a little bit
more, and let me encourage, if not yourself, then your staff,
to look at the report that I referred to, which is footnoted in
my testimony, because it does a better job than I could do,
frankly.
But the idea is fundamentally that a number of sponsors--
and sponsors could include the Gates Foundation, which by the
way, helped finance much of this work I'm referring to--
sponsors would be governments, foundations and could be
international organizations like the World Bank that might have
some financing available. So sponsors would enter into
contracts with willing pharmaceutical firms from anywhere in
the world. So you don't really need an entity, luckily, you
need a legal arrangement that pulls the money together, or the
promises with those pharmaceutical firms willing to enter into
it. And in the case of the malaria vaccine, which we outline in
that report, essentially those pharmaceutical firms would be
guaranteed a purchase of an acceptable vaccine, which countries
would actually have to buy, demand, but the purchase price
would be guaranteed to them.
For example, for every immunized person, $15.00. And that
guaranteed price would last for a specific number of purchases,
so there would be approximately $3 billion out there from the
sponsors to go to one or more firms which might develop a
vaccine, and then perhaps, a second firm, a better vaccine.
Then, part of their legal agreement would be that once 200
million doses in this example had been bought, they would
reduce the price, indefinitely, going forward, and promise
production, indefinitely going forward, at $1 per immunized
person. So, just as you outlined, the concept is to create a
market where a market doesn't exist.
The Chairman. Well, it's an extraordinary idea, and I
really appreciate you bringing it to our attention, as well as
the report you've cited. It's an idea that has not received a
great deal of publicity, and yet is monumental. And as we're
discussing what has to happen in Africa, we've all focused on
the security to begin with. There have to be stable states, and
that will take some doing. It really comes down to this public
health situation in which, as we have heard in testimony from
our ambassadorial nominees, you must deal with malaria and with
HIV/AIDS. Well, usually they're prepped for that, they've done
their homework. But, when somebody demonstrates that a huge
percentage of the population of many African states is already
infected, as well as the whole group of affected people that
are parents, as opposed to children or grandparents, or
teachers and productive individuals. There are some states,
even as we talk about this, that are being decimated.
Ms. Birdsall. I didn't answer your question about the
receptivity to it, and I would like to mention that there has
been just in the past 3 or 4 months a lot of discussion of both
this long-term malaria/AIDS vaccine effort, but also of a pilot
that the United Kingdom is anxious to start, which would be not
for the R&D for a new vaccine, but would be for a guaranteed
purchase contracts for existing drugs and immunization
products, which are not being produced in adequate supply. And
the idea there is to bring down the price by guaranteeing the
purchases to firms going forward so you can get a better deal,
in effect. So, one approach for the United States at Gleneagles
would be to agree to some form of this pilot scheme for
existing immunization products, and to ask the partners in the
G-8 to study carefully a more ambitious idea and come back the
following year with their, hopefully, commitments to actually
moving forward.
The Chairman. Mr. Thiam, do you have a comment about the
Africa priority at the G-8? When I was visiting over in the
United Kingdom last summer, already then the British Government
anticipated for the G-8, the whole Africa emphasis. It came
some time back, which, of course, gave you an opportunity on
this Commission to study this. Now Tony Blair is back after the
election, he is still the Prime Minister, but it's been
suggested that all sorts of things may happen prior to the G-8
meeting.
To what extent in your judgment, visiting with the Prime
Minister or others, is this emphasis on his part such a
paramount consideration that he is determined to try to get his
colleagues, maybe our President and others, to say that this is
a topic on which we can leave the G-8 at Gleneagles without a
formula? In other words, are we really going to press to a
conclusion, do you believe, in this situation?
Mr. Thiam. I really believe so. There is every indication
in the talks, and just the fact that we're here today
discussing this issue, I think is very, very important and very
positive. One thing the Commissioners strongly believe in is
the role of public opinion and the public in the developed
countries in these debates to, and there is a very significant
opportunity--through NGOs and various organizations to really
reach out to as many people as possible, and talk and explain
and communicate. I always say, it's not enough to describe the
tragedies, because I think everybody's aware of that, there is
a history of images of famine and war and hunger and disease,
but it is more important to convince that something can be
done. I think that's where the battle should be fought, to
really convince that this is a tragedy, but it's actually
preventable.
Nancy was talking about the children dying of dehydration,
advocate, and I think for many countries there's a very large
public opinion movement leading to Gleneagles, but we don't
know what may happen between now and then that will determine,
I think, as Commissioners continue pushing the direction and
we're very happy to receive your support in doing that.
The Chairman. You'll be doing your part, and hopefully
we'll do ours too, by providing feedback.
Senator Feingold.
Senator Feingold. Mr. Chairman, I have a couple of more
questions for the Commissioners, and then one for Ms. Birdsall.
As Commissioners, you know a demographic analysis of sub-
Saharan Africa shows that the region's massive youth bulge
continues to grow, as African populations become increasing
dominated by large youth populations, states face tough
questions about whether African economies will be able to
generate jobs for these youths, and about whether African
realities will be able to meet the raised expectations of
urbanized populations with access to the same media messages
that our own children see.
How do the Commission's recommended strategies emphasize
the importance of focusing on youth, and how prominent were
youth actually in your consultation process?
Senator Kassebaum Baker. To be perfectly honest, I don't,
as recognition of demographic change, but I don't know that we
focused that much on youth, as such, other than education and,
I think, a role in the economic outlook for the future. I
personally think it's terribly important that young people are
educated to know there is a job out there. It seems to me in a
many young people want to go into international affairs, or the
government, and there are only so many government jobs. We're
not helping that much, I think, to train them into skills and
jobs, and therefore they're not there. That's why, I think for
me the important thing is to have them understand there is a
light at the end of the tunnel, to use that old expression,
because in these fragile societies, I would just urge that the
committee not forget idly the work that needs to be done in a
fragile society as well. Because otherwise, take a look at the
DRC. If it falls apart again, we have turmoil in that region
again, and it is a very fragile balance, because young people
have nowhere to go. There are no jobs, and they are dragged off
to serve in these armies, 13- and 14-year-old boys, and I've
seen them, and you have too. And there is nothing out there.
And that's why I feel so strongly about trying to find means of
building something in order to develop these skills, and I like
the center of excellence in training in the regions, and it's
also like our old Voc-Tech programs, training in skills that
can be taken into work in the community. I think it's very
important, not only in Africa, but the demographic change in
other areas--Latin America is one, and in the Pacific region,
Southeast Asia where the societies are young, and the jobs for
so many are just lacking, and I think it's one of the big
issues we face, and it's long term and it really should begin
now.
The Chairman. Mr. Thiam.
Mr. Thiam. If I may just respond to that, I think it is the
number one issue in Africa, absolutely. When I was a child, the
population of my country was 4 million, it is now 16 million.
Many African countries have gone through similar experience,
their population quadrupling over 30 years, a nation multiplied
by four. There is no amount of economic growth that can allow
you to accommodate that, going back to my experience of the
soldier who arrested me. I looked at him and I said, ``How old
are you?'' And he told me he was born in 1982; he was 17. It's
really absolutely vital that we're able to create those jobs,
and the answer to that is private investment in the private
sector. I take a company like mine; we've created 4,000 jobs in
India in 2 years, and Africa needs to get its share of these
jobs. It sounds illusory when you talk about conflict and civil
war, but I mean, it's all the more pressing to deal with both
these issues, and to stop that, and to bring that situation to
an end so that quality investment can take place because all of
my experience with companies shows me that providing the right
environment--companies will invest--there's a lot of money out
there that is ready to go in, provided the conditions are
right, but time is of the essence because today, money is going
elsewhere, and the gap between Africa and the rest of the world
is only increasing. So, we must absolutely address this issue.
Senator Feingold. The Commission also emphasized the
importance of a coordinated multilateral effort to help realize
Africa's vast potential, and in some ways the report seems to
assume, I think, more unanimity and motive and perspective than
may actually exist. China is, I noticed, in my trips to Africa,
a tremendously important actor in Africa. But China's view of
investing is Sudanese oil resources right now, and the United
States view of governance and human rights issues are quite
different. Donors will make different calculations about whose
interests in African states and African populations should be
paramount in policy making.
In light of these realities, do you think that the kind of
coordinated, unified effort you proposed can actually succeed?
Senator Kassebaum Baker. I'll leave that to Mr. Thiam.
Mr. Thiam. Thank you. Yes, I think it can. I think
Africans, and African leaders, have historic responsibility, of
course, it will not succeed unless we have the quality of
leadership that can make it succeed, so the first answer has to
be either what kind of leadership are we able to produce in
Africa, and then I think if we have that, then I think it can
happen and we can succeed.
Senator Feingold. You mean leadership of an African
country.
Mr. Thiam. Yes.
Senator Feingold. A leader who is capable of handling what
might be differentiating the motives of the United States
versus China in terms of their objectives in Africa.
Mr. Thiam. Do what a leader is supposed to do, which is to
really further the interests of his people without creating any
major damage to anybody else, and the ability to discern what
is the long-term interest of the country is crucial and there's
no substitute for it.
Senator Feingold. Let me ask one more question, Ms.
Birdsall. I'm often struck by how frequently I hear reference
to the Millennium Development Goals when I'm abroad, little we
discuss these goals here. Will you comment on the
administration's support for the Millennium Development Goals
and explain what progress the United States has made in
achieving our commitments on these goals? Are we on track with
regard to our own efforts to meet the Millennium targets for
2015? What does this tell us about the will that exists here to
engage in the kind of energized, robust development effort
outlined in the Commission report?
Ms. Birdsall. That's a very tough question. You know, what
is notable, you're right, is that in the United States there
has not been the attention to the words Millennium Development
Goals, and I think that's because of the greater concern in the
United States about the implications for the size of aid
budgets, the Millennium Development Goals are seen, maybe too
much, in the administration, and perhaps in Congress as about
money, and there's an allergy--perhaps a healthy one--to either
the executive branch, or the legislative branch making any
commitments about money, so the words are not popular
politically, that's true. And this is unfortunate, I think it
might be time for our government to carve out some position
that is about the Millennium Development Goals in their
entirety, because the goals essentially reflect the concept of
a partnership of mutual responsibility, a compact between the
rich world and the poor world, which is exactly the approach
taken in the Africa Commission Report.
On actual progress in the United States, I'd like to call
your attention to an annual effort at my center which ranks the
rich countries in their commitment to development, defined
across the warming and its problems--which Tony Blair is also
concerned about and will raise, I'm sure, in Gleneagles--
security issues, technology development and friendliness, trade
of course, migration, and I've missed one. In any event, it
looks across the board at seven components of U.S., and other
countries' approaches to the development challenge, and the
United States ranks, in the last year's ranking, in the middle,
or maybe a little higher, something like 7th out of 20 or 21.
Essentially because, although United States trade policy in
many ways is not great, it's better than that in Europe and
Japan in terms of our open borders, same with migration. We
rank very poorly in terms of our aid effort as a proportion of
our overall economic wealth. I would say we also ranked
somewhat middling in terms of our aid effort on the quality
side. The U.S. programs are seen as part of the problem of
fragmentation and lack of coordination across the donors
imposing high costs on recipient countries, instead of being
part of the solution.
The Chairman. Thank you very much, Senator Feingold.
Senator Obama.
Senator Obama. Thank you, Mr. Chairman. Let me pick up on
something that was mentioned earlier, and that is the issue of
regional cooperation. And I thought you had, Ms. Birdsall, a
wonderful reminder that if you combine economies of the
continent, they are slightly smaller than the city of Chicago,
which says something. Now, Chicago and Illinois are famous for
having too many governments, by the way of mayors and townships
and all kinds of stuff.
With respect to Africa, if we concentrate resources in ways
that give us economies of scale, I'm wondering--and any of the
three of you, I'd be interested in your opinions--as the
Commission was doing its work, was there some sense,
strategically, that we should focus our resources on some key
regional powers? What is happening with those powers as anchors
to overall development strategies? I'm thinking that if Nigeria
had its act together and South Africa is the lynchpin of the
southernmost portion of the continent, and whether it's Kenya,
Uganda, a couple of the stronger countries on the east, that
creating some spaces in which transparency and economic growth
are taking place, would affect other parts of the region. I'm
wondering, is that something--that's something that has been
discussed, talked about; does that make sense?
Ms. Birdsall. Do you want me to say something about that? I
think it's a critical question. We do know that some of the
conflicts in some parts of Africa are exacerbated because of
what's called the ``net neighborhood effect,'' and that could
be offset if there were these anchors.
Let me say a word, in particular, about Nigeria, because
South Africa is already quite an effective anchor, including
for a regional, a subregional group in the southern part of the
continent that is working reasonably well. But on Nigeria, I
think it's an interesting example of the potential for the
United States to take some leadership. Nigeria has now had for
several years, under the second Obasanjo regime, a reforming
cabinet. In particular, the Minister of Finance and the head of
the Central Bank, are both working very hard with very
effective teams to deal with corruption problems. The Nigerian
Government, in the last year, has saved a substantial portion
of the windfall it has received because of the high oil price,
and there is a problem of debt in Nigeria which is creating an
internal political problem in which the Parliament is resisting
some of the reforms because of its agitation over the long
history of the way debt was accumulated in Nigeria. Nigeria
actually only borrowed about $3 or $4 billion during its early
democratic government in the eighties, but the military
government subsequently didn't pay, and as a result, the
interest on that debt, and $3 or $4 billion has now accumulated
to almost $30 billion because of arrears and penalties, and
this debt is owed mostly to Europe--France, Germany, the United
Kingdom, a little bit still to the United States and Japan, so
there's a lot of----
Senator Obama. So were they operating this on a credit
card? That sounds familiar----
Ms. Birdsall. They weren't borrowing more, they just
stopped paying back, so the cost of that debt ballooned because
of interest and penalties, as some of us might know, if you
don't pay your credit cards, right, they were having a credit
card problem. So here's a case where the United States,
including possibly at Gleneagles, could signal that it would
support a risky, it would be risky, as Senator Kassebaum
referred in an earlier comment to the logic of taking risks
when there are opportunities. We could take leadership on the
Europeans, in particular, moving ahead and saying, okay, we
will write off this debt, in fact, the Nigerians could offer to
use some of the debt at a reduced rate, and there is discussion
of that going on between the Nigerians and some of the debtors.
So this is one where--in our security interest--as well as
in terms of improving management in Nigeria, exploiting an
opportunity to create an anchor, and by the way, of course,
Obasanjo has shown great responsibility already in terms of the
situation in Sierra Leone and Togo elsewhere on helping out
when there are neighborhood conflicts. Here's an opportunity
for the OECD countries, the advanced countries, with some risk,
admittedly, because this--but to shore up a reforming
government, and to ensure that, at least in the next election,
the efforts of Obasanjo's government to undertake economic and
political and social reforms are not undermined because the
popular vote goes against their inability to have dealt with
the debt.
Senator Obama. Senator.
Senator Kassebaum Baker. No, it was another subject, thank
you.
Mr. Thiam. I would just like to build on that, because I
strongly support what Nancy Birdsall has just said, but I think
it's not an either/or. You do have to support the Nigerias, the
South Africas and to help regional powerhouses. But I think
it's like a chain. You are as weak as your weakest link, and
you, as I say, the point is often made that we share the same
geographic space, so if a teacher in the classroom says,
``Well, I'm only going to focus on my good pupils,'' the point
is, there is a contagious disease in the classroom, it's going
to spread, and kill all the good pupils. So ultimately, you
must take care of all the pupils and not just focus on the best
ones.
Senator Obama. Absolutely, I guess the question has to do
with some of the debates we had when we were discussing the
President's Millennium Challenge Accounts. That is, there are
going to be some states, that, because of a variety of reasons
are able to take on more, and we want to invest more in those
states. Then there are others in which moving away from
traditional aid programs that provide for basic public health
that those may be the most important things that we can do in
certain other countries, and I'm just wondering whether
internally within the Commission you envision prioritizing and
thinking about capacity within these discrete countries. There
may be some benefit to making sizable investments or taking
bigger risks with certain countries than others.
Mr. Thiam. I agree with that. I think we haven't published
a prioritized list of countries, but we certainly support the
approach and have an idea of which countries should come first.
Senator Obama. Senator, was there a comment that you just
wanted to pick up on?
Senator Kassebaum Baker. Before we closed, I wanted to go
back to the question, perhaps, that Senator Feingold raised
about whether, with the Commission, and the Commissioners,
could we bring people together? I would just like to say that I
do believe, and it was recognized by the Commissioners that
while we might have separate ways of dealing with some of the
issues, clearly the issues that were laid out were ones of
which we all knew were problems for the continent of Africa.
And I think the term ``compact'' is a useful one in the sense
that these were concerns that all donors, all major donors in
the G-8 share, but there was also an acknowledgement that there
would be different ways that we might move toward helping
achieve that. I think the three of us have addressed here the
fact that the greater coordination we can achieve, even with
our different paths, knowing what we're doing and how we can
make them work effectively within a country address is
something that would be a major achievement, I think, to
success in seeing fruition in reaching the success of the
compact.
Senator Obama. Mr. Chairman, I know we're running out of
time, I'm going to have to leave, I don't know if you're
planning an additional round. If you don't mind, maybe----
The Chairman. Go ahead, Senator, because we will probably
not have another round, the votes, now I'm advised, will
commence about noon.
Senator Obama. Okay.
The Chairman. And then we'll be locked into that situation.
Senator Obama. I hope the chairman finds this a useful
question. My final question is: What specific steps do you
think the United States and this committee can be taking to
advance these goals? We have an administration that, I think,
is sincere in wanting to pursue development in Africa, but
seems to be allergic to multilateral efforts. You don't need to
editorialize on that, but I will--they have their Millennium
Challenge Accounts and a particular way that they want to move,
and I don't think their goals are contrary to what's in the
Commission, but my sense is they seem to be steering the United
States onto a particular policy path.
What do you think would be the two or three most important
steps that the United States could take, and maybe, Senator,
you could particularly address the role that this committee,
having served on it, could take in encouraging the sort of
collaboration and coordination that you just discussed?
Senator Kassebaum Baker. Well, thank you, that is an
important question, and I know the chairman, as he said, was a
real leader on African issues when I was the subcommittee chair
and ranking member, I had both roles to play, but, and so it
has had a history in this committee I think, of an interest in
Africa on both sides of the aisle. I share a desire to see us
be more collaborative, I think it's important for us when we're
trying to meet some large efforts that we bring to bear our
expertise in the arena with others, so what is done has greater
rewards at the end of the day because it has been working in
collaboration and conjunction with others.
I think Nancy Birdsall made an excellent example of how
many different agencies are all there on the ground, and again
a lack, and I think the question is, how do you bring about
that coordination? Whose responsibility is it? And within one's
own country, and government, as well as among.
I guess I don't know whether this is a role the committee
wants to undertake to look at that, and how you further it, I
suggested in my remarks that we focus on a couple of things,
and we would each have, I suppose, our own priorities, but mine
would be working with infrastructure and that was a
recommendation that was in the Commission that a public/private
partnership be formed in a separate type of trust fund
initiative for infrastructure. And this is infrastructure that
I think would cross regions, so again, you're pulling other
countries together so you can enhance your transportation, but
I'm sure others would point to other areas, and security
issues, and that is one that I think, actually, we are doing in
good collaboration with other countries.
I think for this committee if there is the interest that
just taking a couple of the issues that are in the report, and
maybe the buyback initiatives, or how one gets a handle on
recommending what to do about small arms in Africa. Those kinds
of things, maybe, are conducive, and I would suggest education.
A lot of money and interest is involved in education now, is it
being coordinated as effectively as it could be to help? So, I
think there are all kinds of things that the committee could
do, and I know, Mr. Chairman, I'm very appreciative, I think
all three of us are, for this chance to sort of explore these
issues before the committee. This gives us a chance to have a
good hearing on the report, and I think these kinds of things
help keep the issues alive, because there are so many issues we
face today, that I think for most people it's awfully hard to
focus on the further distance. We see Darfur and we think,
``Well, we've been through this before, we've seen these
pictures on TV before.'' And there's a certain sense of, what
can we do to help? And I think that's what would be very
positive, is if at the G-8 all the countries would say we can
do something positive, it may not be meeting the Millennium
Challenge Goals, but what's important is, showing that
something is done in a concrete way that's positive, that
provides an incentive for others, then, to move forward. And by
others, I mean African governments themselves.
That's my own personal view. But I think it reflects,
pretty much what the Commissioners felt, even though, knowing
that our own governments might be taking some different actions
that ultimately the goals were the same, in the areas that were
addressed in the report.
The Chairman. Thank you very much, Senator Kassebaum. I
want to recognize now Senator Martinez, who has returned from
his duties elsewhere, as we mentioned. We're delighted you're
back.
Senator Martinez. Thank you very much, sir, and I know
Senator Kassebaum Baker understands the many demands on our day
as we run from one hallway to another. I'm still trying to find
my way, which makes it increasingly challenging to try to do
that, but anyway, I have a number of questions, and I am sure
that some of these may have been covered, so please forgive me,
but I thought I would just try to go at them, and if it's
repetitious, please advise, but I wanted to ask Mr. Thiam how
the report has been received in Africa, both at the
governmental level, and in civil society, and in general, if
you have any observations you might share with me on that.
Mr. Thiam. I think, although the report has been well-
received because the strength of the African representation of
the Commission was important to Africans, out of eight
Commissioners and coming from a variety of countries. So it was
significant amount of time in consultations in West Africa,
Central Africa, which involved civil society and which were
actually quite productive. I do think that there is a lot of
skepticism. I think people would say, ``Well, the report makes
sense, you're dealing with real issues,'' and so on. Some
people even say, ``Okay, it is hard-hitting dealing with things
like corruption,'' and so on and so forth. But everybody's
waiting now to see what is going to happen, and that's why this
phase we're going through is so important. We need to come from
the G-8 with something concrete coming out of that, because I
always say that in Africa, I think the cost barrier is higher
than in other places because we've just failed too many times,
and a failure this time would be, again, another tragedy, and
just reinforce the feeling that there is no hope.
Senator Martinez. I think it's important that so many of
the participants, including a person I consider a friend, was
part of the Commission, and so many other Africans were
participants, which I think would enhance their credibility as
being something that's generated by and for Africans, and so I
think that's an important aspect of it, and I also believe that
if we're going to make progress on this whole area of the
solution as I think the Senator alluded, is a solution that has
to be African, and there has to be buy in into the report, even
before, or regardless of what may take place when the G-8 come
together, because that's when we want to bring in some,
obviously tangible, needed benefits, but I think that there's
going to have to be some recognition that if the answers are
think is so important, that there be the understanding of the
report in that fashion.
Senator, I wonder, as you mentioned in your remarks, that
the aid, the size of aid or the amounts of aid--at the end of
the day--may not be the most important, because of social
issues and so forth. How much aid do you think is appropriate
in terms of increases, or the Millennium Challenge Account, are
we doing our part in your estimation, obviously there's been
some efforts on AIDS and other things, how do you view where we
are at this point, and where we should be?
Senator Kassebaum Baker. Well, Senator Martinez, I think we
have done some important things, the Millennium Challenge
Account, and with HIV/AIDS, I think the HIV/AIDS particularly
has been an extremely productive combination of public/private
partnership, as I mentioned.
What I said is that I don't know that it's the number and
the amount of money so much, as the delivery system. And I feel
that we have frequently not encouraged as much collaboration
with others, and particularly the host country and those within
it to make sure that there is their buy in, as you say, to
what's being done. Are we doing something from here that then
may or may not be something that is going to be sustained in
country? And I think that that's an important part of the
equation.
If you go back to the history of so many things, many of
these cycles we've been through before, infrastructure, and
then it was something else, and now it's back to
infrastructure, and, I think, if we are going to see it work,
it isn't whether it's going to be $25 billion or $2 billion,
it's going to be the commitment to sustaining. We can't say
this is our goal, and a lofty goal, and walk away and next year
repeat the goal. I would much rather start with something much
smaller and see it succeed, and build on it, than a lofty goal
which is just so many words, ultimately. And that's why I feel
so passionately about taking a few things and showing how they
could succeed, with some restructured planning, rather than
sort of embrace something too large. Does that answer your----
Senator Martinez. It does, and I think it's an approach
that I would have to concur is probably appropriate, rather
than get too big on the idea and too little on the
implementation. I think you're talking, I think you're correct
in terms of solid achievement that can be measurable, there can
be success to build on and continue to build on in a steady
fashion.
Ms. Birdsall, I'm intrigued with your testimony that had to
do with debt forgiveness and the cycle of debt, as the chairman
alluded to, borrowing that ends up in the wrong places,
followed by debt that cannot be paid, and then apply to
forgiveness of debt, only to then begin the cycle of borrowing
all over again. How can we effectively break the cycle--I can
buy into the notion that you mentioned of a $500 income level
forgiveness, which I presume probably would be healthy anywhere
in the world if that was the situation, but then how do we go
from there toward a grant system, and preclude the further
borrowing?
Ms. Birdsall. I think that's exactly the right question,
donor system that new transfers to countries that have shown
good management, and therefore have had their debt relieved, in
other words, the international community has made great
progress in the last 10 years in shaping the program called the
HIPCI program, the Heavily Indebted Poor Country Initiative,
which forgives both multilateral, past multilateral and
bilateral debt, so how can that progress be locked in to
prevent, in the future, another round, and there are really two
ways. One is for the poorest countries who clearly cannot, they
need resources to get the ball rolling, to invest in the
prerequisites of growth, in education, in health, in creating a
healthy business environment and so on. And even if they can
pay back, until they get over $500 per capita, why not allow
them to use any additional resources they have to reinvest.
So that the first part is to lock in an agreement that
going forward, resources go in grant form, which most bilateral
donors are doing already. It's basically the regional
development banks, the World Bank and the IMF that are still
sometimes making loans. And this administration has actually
taken a very strong position on that, it's been a long and
contentious battle over IDA resources going in grant funds with
the Europeans, but essentially that battle has been resolved
now, for all practical purposes, it just requires clarity on
what the rule is, it's a little bit muddy and confused now. The
second part going forward is to ensure that new aid is
effective, that's more important than anything else. I think
there wouldn't be concern about whether it's loans or grants,
and that these countries could use the aid effectively to get
onto a growth path. So there, we get right back into some of
the other issues of the role of the United States in supporting
a coordinated, cooperative approach, the amounts that the
United States itself provides, and the uses of those resources
within the countries.
Senator Martinez. One of the things that I believe is so
important in the path to development, obviously stable
government and rule of law, but it's also the judiciary, and
you mentioned the role of the independent judiciary, a
functioning judiciary. It seems to me that that's a
precondition to investment, foreign investment, which
ultimately is the hope to take the place of aid, but it would
be the engine of development, really, until you can kick into
that next step of development, which is people wish to invest
in your society. It seems to me important that some project be
initiated in terms of establishment of the rule of law, and
establishment of, I don't mean just the rule of law, I mean a
judicial system, rules of commerce that would be transparent
and understood, and the ability to enforce them in a judicial
system, whether it be with assistance from international
organizations or otherwise, is there any specific
recommendations in the report concerning this area?
Senator Kassebaum Baker. We mentioned this as being
important, I happen to know the American Bar Association has
had various programs in several countries on the continent,
Nigeria, particularly, on and off over the years----
Senator Martinez. I'm specifically thinking of that,
Senator, that the projects that the American Bar has undertaken
whether in the Eastern European nations when they were first--
--
Senator Kassebaum Baker. The CEELI program.
Senator Martinez. Right.
Senator Kassebaum Baker. And that's been very effective in
Eastern Europe, and they've started a similar initiative in
Africa. I can't speak to what it's doing right now, can you?
Mr. Thiam. There is a similar program in West Africa called
OHADA. I think it's a very interesting idea, which is to take,
on the regional level, where judges that are in the regional
court are less susceptible to local pressures and local
considerations and corruption.
Senator Martinez. It would seem to me to be a good idea,
regional courts are regional.
Mr. Thiam. Exactly, and that's working quite well, for
arbitration issues and so on, I think that could be duplicated
in other regions, so----
Ms. Birdsall. There is a tremendous amount of support for
these kinds of programs from the World Bank, and at least, I
know in the case of Latin America, from the Interamerican
Development Bank, and I would guess that the African
Development Bank is also heavily engaged, I think under the
leadership of Paul Wolfowitz at the World Bank, there could be
strong signals from the Congress, even, that maintaining and
improving the investments there, in measuring the levels of
governance by many different criteria--rule of law, free press,
property rights, friendly business environment, all of these
ingredients that we itself is very useful in clarifying what
help is needed in what settings, and in also clarifying which
countries can absorb more resources more quickly, going back to
the point that you referred to, Senator Kassebaum Baker.
Senator Martinez. I realize my time is up, and I appreciate
the Chair's indulgence, I see the hour of noon has arrived, so
I appreciate the panel being here, and the wonderful report and
the time you're taking with all of this.
The Chairman. Well, thank you very much, Senator Martinez.
I appreciate especially your leadership and that of Senator
Feingold in the subcommittee, because clearly much of the
followthrough on this will lie on your shoulders, but you'll
have some assistance from all of us. Let me just mention
briefly that Paul Wolfowitz has been mentioned several times as
the President of the World Bank. He has called me and indicated
his interest in Africa, and his interest in taking a trip to
Africa at an early point in his new responsibilities. He has,
in fact, even run through a potential itinerary, asking for my
judgment about these various countries. I think that's
important, and so it may very well be that he will ask for the
assistance of this committee and our staff in trying to think
through some of the issues that regard the World Bank and the
loans and their responsibilities, and maybe more strategically,
the entirety of the agenda we've been discussing this morning,
so that's a helpful sign. Among other things I know he will
look at, and we have not had a chance to explore to date, is
the question of oil. You take a look at the continent, there
are a lot of assets in Africa, collectively. Extraordinary
exploitation may occur. We have had other testimony of citizens
of China and India and others working--some would say--for the
last acre that might have any drilling, potentially. As they
think of their needs, and how all that fits together, it would
be an interesting question to explore how Africans will use
their own resources. This is not, necessarily, a deficit region
in terms of opportunities. That will have to wait for another
hearing but it may be a part of the consideration at the G-8 or
in other circumstances.
I just want to observe, finally, that the President asked
for some $33 billion total in the so-called ``150 Account.''
That's the account that deals with foreign assistance,
generally. This committee authorized that request, all $33
billion, but by the time we finished the budget process on the
floor, we were down to $2.3 billion less than this. The
appropriators are now working with that recommendation in
coming up with the so-called 302(b) allocations.
Now, it's our hope, I think, in this committee, having
voted for the $33 billion, that the full amount can be
considered by the appropriators. The outcome, to say the least,
is uncertain. We have the seriousness of the problem ahead of
us to date, and we also know that in the real world of
congressional situations, with two houses, and many committees,
that sometimes our own enthusiasm and idealism is not
necessarily reciprocated by others. Yet we offer the witnesses
the assurance of our own concern, as well as that of those who
are listening to this conference today.
We thank you all for your generous allocation of time, both
to the Commission report, as well as to the analysis of what
has occurred. We thank all Senators, and the hearing is
adjourned.
[Whereupon, at 12 p.m., the committee was adjourned.]