Africa Must Play "Catch Up" With the Rest of the World

Museveni: "Uganda will be partner, not dependent"

Kampala, Uganda -- "We've been exploring ways in which we can make Africa catch up with the rest of the world," Ugandan President Yoweri Museveni said May 28 of his discussions with Treasury Secretary Paul O'Neill during O'Neill's tour of Africa.

Speaking at a news conference with international journalists outside his presidential residence in Kampala, Museveni said Africa is a "very rich continent," a vast area of land with 800 million people.

Discoursing on his country's internal and external problems, he said: "We need a multi-pronged approach. On the one hand, we need to deal with short-term problems like debt cancellation. But to insure that no new debts are contracted or that there's [not] a permanent dependency ... we must open the markets and then this country will be able to export. Then, instead of being dependents, we'll become partners. Because once we export, we attract investment, ... we create employment for our people here, their purchasing power goes up. They will in turn import American products so that it will now become a real partnership -- not a dependency."

Museveni decried the external "bottleneck" that has resulted from "protectionism in Europe, the fact that African products could not gain access to European and American markets."

"This has been partially addressed in the case of the United States with the [passage] of AGOA, the African Growth and Opportunity Act," he said. "They have opened markets for 1,800 products -- value-added products. In the past, the U.S. and Europe were allowing in African raw materials, but not ... African finished products. Now they are allowing them in, at least 1,800."

Museveni said he was "very pleased" that the American treasury secretary "is on my side," adding, "The Western world is now beginning to behave in a balanced way with Africa." In the past, the relationship was "parasitic ... not symbiotic," he said, citing the slave trade, colonialism, and the Cold War. Relations are now beginning to become symbiotic, he added.

Some of Uganda's self-inflicted problems have been "addressed and solved," he said, including the giving back of "all the properties" seized from Ugandans of Asian descent under former leader Idi Amin. "They are now thriving businesses, especially in the sugar sector. Right of ownership of property is now enshrined in the constitution," he said.

O'Neill spoke of Museveni's recent visit to Washington, saying the Ugandan president spent time "exploring directly the possible business connections with distributors and product-using companies in the United States to get around the lack of linkages between a product's existence here in Uganda and the export distribution of these things to the broader market."

The secretary said he was "struck by his [Museveni's] report on that part of his visit because it captures very well his own thinking process and ability to go way beyond a traditional political leader in understanding how linkages occur in creating economic value, and not just assigning it to a ministry, but accepting the responsibility of knowing for himself -- then coming home and helping his ministers understand it so that they can move forward."

O'Neill called Museveni "really quite a remarkable leader," and said he was instrumental in insisting "against some opposition" that universal schooling be a priority for children from a very young age and not from age 10 or 12, as others advocated.

Another constitutional right of Ugandans, instigated by Museveni, is the right to have clean water -- a favorite topic of O'Neill's.

"The constitution of Uganda says clean water is a basic human right, and I was very interested in the question of how fast the human right can be delivered," O'Neill said. "So we had a very interesting conversation about this, which will lead to some more work.

"There may be some areas like water and like AIDS assistance, and maybe primary education, where there could be a way of agreeing on money flowing for a particular purpose without it being an imposition. We must be very careful not to imagine that we know more than we really know."

Museveni interjected: "Secretary O'Neill is very strong on water and I completely agree with him. Sometimes our systems get bogged down in their own vision. For instance, they say we need an integrated development plan. ... By integrated they mean we need a plan for clean water, for sewage.

"Now that's all right, but for the rural areas we don't need an elaborate sewage system; once there is a clean standpipe in the village, even if you don't plan for taking away the water that is used, ... that gets rid of a lot of the problems of waterborne diseases, typhoid, [and so on].

"In Uganda, 85 percent of the people live in the countryside, so if you provide clean water for the countryside, you are already providing clean water for 85 percent of the people," Museveni said. "So you shouldn't waste time with people who worship words and don't worship the real god: the god of delivery, delivering results to people," he said to the enthusiastic applause of listening Ugandans.

The major issues of grants instead of loans and debt cancellation were raised by reporters in a question-and-answer period.

O'Neill was asked if the United States is willing to "write off debts of countries like Uganda." He said that the United States "has been among the nations that agree we should have HIPC [the Heavily Indebted Poor Countries Initiative] and then that we should have Enhanced HIPC. In addition to that, President Bush has said we should increase the assistance to the African Development Bank by 18 percent and we should increase the assistance to IDA [International Development Association], which is the multilateral-World Bank way of giving money, by 18 percent right now and, in addition to that, we should give another $5 billion [$5,000 million] a year to assistance."

A major reason for coming to Uganda, O'Neill said, "was to see projects and see how money is being used. ... I think we've seen some really excellent [projects]."

O'Neill added that President Bush "has said for low-income countries, we should stop giving them loans and we should give them grants." Stop "making loans to people who should get grants for water systems, and primary education, instead of continuing a fiction that we're going to give you a loan and somehow you're going to pay it back.

"In every G-7, G-8 meeting ... we've talked about this idea [of grants instead of loans]," O'Neill said, adding that some of the other major donors disagreed.

"I think we're close to agreement now, so that we can move forward, at least for the most heavily indebted countries and for the lowest-income countries: that the money flowing for primary education and water and for HIV/AIDS [assistance] can be almost all grants instead of loans, so that, overall, maybe the total flow of funds, instead of being 3 percent grants, 97 percent loans, will move maybe to something like 21 percent or 22 percent grants overall, with a heavy focus on those who need grants the most, instead of loans.

"You show me an AIDS project where you can make a loan and they're supposed to pay it back. It's ridiculous on the face of it. This is an important idea. We need to make grants to people who need it, who are showing leadership and a priority sense of what is important, instead of creating the fiction that will create the next generation of heavily indebted countries," O'Neill said heatedly.

Museveni added: "Debt cancellation must be coupled with market access. In 1965, Uganda was at the same level of development as South Korea. Now, South Korea is an industrialized country, Uganda is still struggling."

Market access is the answer, he said.