Secretary O'Neill Says Development Aid Must Deal with Realities of Life

Says U.S. can't tell Africa "be like us" and you'll succeed

Addis Ababa, Ethiopia -- "I think development assistance and ideas that don't deal with the reality of life the way it is ... are doomed to failure," U.S. Treasury Secretary Paul O'Neill told an international press conference in Addis Ababa May 29.

O'Neill was on the last stop of a four-nation, 12-day fact-finding tour of sub-Saharan Africa.

"For problem-solving purposes," he said, "it's very important to know what's possible, especially for government leaders to have expectations that are within the realm of possibility but at the very upper end of what human potential is."

He also said he doesn't believe people achieve their desired goals because of government, or "because a government was able to figure out how to organize the market and set prices. ... In fact, I think all of the evidence is to the contrary."

A reporter had asked whether the American model of capitalization focusing on free markets was the right one for development in Africa. O'Neill said: "I think that places that succeed greatly ... [do so] because people succeed greatly, one at a time. It doesn't mean they do it independent of other people, but with their own energy and liberation through education, people succeed and they succeed by making enterprise."

He added: "Having said that, [I don't mean to say] that there can be an equivalent light bulb switch being turned to go from where some countries are to a model like the United States.

"We have to be very careful in what we do in the United States not to be cavalier in saying, 'Just be like us and everything will be okay.' That's obviously not the case."

He cited examples from his current tour. One was "a thousand dollars to protect a natural spring so it could be a source of clean water" for villagers. He said the people were at first afraid of efforts to purify their water because they believed it "was overseen by a snake and that if they messed around with the water and tried to provide a concrete still basin for it, the snake would take the water away."

He said the lesson he drew from this was that economic development takes place in the real world as it exists in people's minds with whatever learning and experience they have, and "it's pretty easy to sweep it away and say, 'We don't pay attention to those kinds of things.'

In his experience, O'Neill said, he has "never found companies or countries that exceed their expectations. So it's important to have the highest of expectations but to couple those expectations with the reality of what is, ... then to have leadership with the skills to understand the pathways of what is to what can be.

"All of the individual people of Africa have the God-given human potential to succeed greatly," he said, adding that doubters should come to Africa "and see the wonderful examples of human initiative, of stretching to have a meaningful life."

Asked about the administration's recent passage of farm subsidies, which African governments say "don't help," O'Neill pointed skeptics "to AGOA [African Growth and Opportunity Act], which is a U.S. initiative that was put in place over a year ago to specifically open U.S. markets to what I believe is 1,800 African products. It's a preferential opening for Africa, and I think we've already witnessed a huge increase in products from Africa coming to the United States."

He said this proves that the United States "is showing its good will and its open-market attitude toward Africa ... and, more specifically, to products of Africa. But it's not the only initiative. The president has been pressing hard to work with the Congress to enact so-called trade promotion authority so that we can do more.

"At the most fundamental level, the president and I believe [that] in an ideal world there are no trade and tariff barriers. ... And so in the longer term, that's the direction we want to be headed.

"As we look at Africa, we note that one of the things that's true between and among the countries of Africa is that the trade and tariff barriers between the countries of Africa are high and represent significant barriers to internal development."

The markets near to one another in Africa, he said, have the lowest transportation costs, "and therefore a significant opportunity for economic development enhancement if these barriers could be taken down."