"The three-fourths of a billion residents of the African continent represent a consumer market of enormous potential for the companies that have the wit and the will, and the imagination to establish a presence there," U.S. Ambassador to Portugal Gerald McGowan told participants at a business conference February 15.

In a speech that opened the conference "Emerging Business Opportunities in Lusophone Africa: Portuguese-U.S. Partnerships for Development," held February 15-16 in Cascais, Portugal, McGowan outlined what he called "a chance for a synergistic approach that has benefits all around."

"If we can combine the regional expertise of Portuguese companies with the excellent access to capital and risk coverage found in the American business community," McGowan said, "we'll create new economic opportunities for the investors involved, and for a part of the world that desperately needs development and stability for its people."

The two-day conference brought together American and Portuguese businesspeople, African government officials, and representatives of financial institutions, who learned about specific opportunities in such sectors as infrastructure and utilities, textiles, tourism, manufacturing, agriculture, and fisheries.

The conference also included presentations by major Portuguese investors and private banks, and by officials of the World Bank, the African Development Bank, the European Investment Bank, OPIC (The U.S. Overseas Private Investment Corporation), the U.S. Export-Import Bank, and the U.S. Trade and Development Agency.

Following is a text of Ambassador McGowan's remarks, as prepared for delivery:

(begin text)

U.S. Ambassador
Gerald S. McGowan

Opening Remarks

Conference on Emerging Business Opportunities
in Lusophone Africa

Hotel Quinta da Marinha, Cascais

February 15, 2001

Distinguished Guests, Ladies and Gentlemen:

This is a very special day for me - one of those times when you see something that you've dreamed about finally become a reality. In fact, I'm reminded of the Kevin Costner film, "Field of Dreams". Do you remember that one? It's about a baseball fan who dreams of bringing a major league team to his small town in the Midwest. There's a famous line in the film about his obsession with building a baseball stadium in the middle of nowhere: "If you build it, they will come." Well, this beautiful setting here in Cascais certainly isn't the middle of nowhere, but this conference is something I've been dreaming about "building" for quite a while.

Ever since I arrived in Portugal as U.S. Ambassador a little over three years ago, I've been intrigued by a concept. I firmly believe that there are natural opportunities for American and Portuguese firms to do business together in Lusophone Africa, which for the Americans in the audience, means the Portuguese- speaking countries of Mozambique, Angola, Guinea-Bissau, Sao Tome and Principe and Cape Verde. As I've gotten acquainted with businessmen in Portugal, I've come to appreciate the valuable knowledge and experience that the Portuguese entrepreneurial community has regarding conditions in Africa. At the same time, I'm aware that most small and mid-sized American companies know very little about Lusophone Africa, and are reluctant to invest there. What emerges from this situation is a chance for a synergistic approach that has benefits all around. If we can combine the regional expertise of Portuguese companies with the excellent access to capital and risk coverage found in the American business community, we'll create new economic opportunities for all investors involved, and for a part of the world that desperately needs development and stability for its people.

But before I go any further, I want to salute the person who has shared this vision of mine and made it possible for us to be here today. As Director of the Luso-American Development Foundation (or as it's known by its Portuguese abbreviation, FLAD), Dr. Rui Machete has given special attention to the human and economic problems of Africa. As far back as 1991, FLAD and Georgetown University sponsored a conference to promote more effective Portugal-U.S. cooperation in Africa. Ten years later, FLAD's commitment is still evident in the unflagging and generous financial support that Dr. Machete has furnished to our gathering here today. Please join me in giving a generous round of thanks to Dr. Rui Machete.

Africa as a whole presents the greatest challenges of any region of the planet in terms of its needs for eliminating poverty, dealing with infectious disease, reducing civil strife, and becoming an equal partner on the world stage. Just to give you an indication of how far Africa needs to come in order to participate fully in the global economy, let me just mention a few facts on its telecom infrastructure:

-- Africa has the lowest telephone densities in the world, the lowest numbers of computers, and the most expensive telecommunication charges.

-- At present, there are only about three million Internet users in Africa, with two-thirds of those in South Africa.

-- Africa, with 780 million people, has the same number of Internet hosts as Latvia, with a population of 2.5 million.

Fortunately, there is also news out of Africa that, from a business perspective, gives us motivation to see possibilities, rather than impediments. Sweeping changes are taking place - democracy and economic reform is spreading. During the 1990s the number of countries in sub-Saharan Africa with democratically elected governments rose from 5 to 24. Average growth in sub- Saharan Africa rose from 1.4 percent in the early '90s, to close to 5 percent in the late '90s. When I cite Africa's lack of telecom and Internet capacity, I'm not making an indictment, I'm pointing out an important business opportunity. The three-fourths of a billion residents of the African continent represent a consumer market of enormous potential for the companies that have the wit and the will, and the imagination to establish a presence there.

There are many reasons why America cares deeply about what's happening currently in Africa, and about its future. There are historic linkages between the continent and 30 million African Americans. Fifteen percent of U.S petroleum requirements are now supplied by Africa, principally from Portuguese- speaking Angola. 100,000 American jobs are tied to exports to Africa.

The decade of the '90s witnessed a significant positive evolution in the attention the U.S. has given to Africa. Former Vice President Gore and former Secretary Albright made multiple trips to Africa. Former President Clinton made two extended trips to Africa to underscore U.S. support for democratic principles.

I think we can expect to see this emphasis continue with President Bush, whose first meetings with foreign leaders after taking office were with President Paul Kagame of Rwanda and President Joseph Kabila of the Congo. It is encouraging that the first official briefing requested by our new Secretary of State, Colin Powell, himself an African-American, was on conflict resolution in Africa. In a recent television interview, Secretary Powell referred to Africa as "a huge continent in great need" where the U.S. "has to be engaged."

Last May the Congress and the President collaborated on a landmark piece of new legislation, the African Growth and Opportunity Act (AGOA). We will have more discussion about how to take advantage of AGOA over the next two days, but for now, the most important provision for you to note is that qualifying countries in sub-Saharan Africa receive duty-free treatment for virtually all exports to the United States.

Now, although I'm proud of our achievements, I didn't come here just to talk about what the U.S. has done in Africa, and I want to recognize Portuguese accomplishments as well. The Americans in our audience probably aren't aware of the intensity of the continuing interest among Portuguese regarding their former colonies in Africa. Almost a million Portuguese citizens returned here in the '70s when Portugal ended its colonial involvement. About 20 percent of the current members of the Portuguese Parliament were born in Africa. The Portuguese media gives events in Luanda and Maputo almost the same level of attention as domestic news. And I should note that this awareness is reciprocal. Two of Portugal's main football clubs, Sporting and Benfica (think Yankees and the Red Sox), are as popular in Angola and Mozambique as they are here in Lisbon.

It is no surprise then that Lusophone Africa is at the top of Portugal's foreign policy and development agenda. According to the Investment Promotion Center of Mozambique, the third largest investor there of new funds during the last half of 2000 was Portugal. In terms of new jobs created by their investment, the Portuguese were at the top of the list, with 560. In Angola, the Portuguese Investment Bank, BPI, announced just a couple of weeks ago that it would open new branches throughout the country, and increase its investment profile in Angola by $25 million. Last October, Ricardo Salgado, Chairman of the Espirito Santo Bank announced a renewed commitment to activity in Angola, with new investments last year of around $20 million, mainly in distribution networks, air transport, and fisheries. Banco Espirito Santo's current exposure in Angola is reported to be around $150 million.

Prime Minister Guterres' commitment to engaging with Lusophone Africa was demonstrated by the six-day state visit he made to Mozambique in October of 1998, when he signed agreements on railway renovation, debt rescheduling, and financial cooperation. Over the long haul, Portugal has been the most consistent and conspicuous source of foreign investment for the Lusophone African countries.

Now, I'd like to make myself clear on a couple of points where there could be criticism of U.S.-Portugal partnerships in Africa. First, I'm not saying Portugal is the sole gateway to Lusophone Africa. It is not the only way to proceed -- but it is one way for American companies and capital that would not otherwise go to Africa to reduce the risks of investing there. My contention is that for some companies -- not the Coca-Colas and Chevrons of the world, but small to mid-sized American companies -- this might be a strategy that will work when a company would have otherwise been reluctant to go it alone. Second, there are some who might suggest that an expanded Portuguese presence in its former colonies isn't welcome, and that establishing new Portuguese business interests is a step toward re-colonization. In the face of such an attitude, I can only observe that since 1974, Portugal has consistently embraced democratic self-determination, and rejected colonial aspirations. Speaking as someone from a nation that began its existence as an under-developed colony, I am an advocate of all countries seeking out fair and honest business investment, and the sustained prosperity it can bring.

Last December, I had a chance to travel to Mozambique for the first time, and to observe first-hand the continuing engagement of Portugal in one of its former African colonies. Portugal is present in Mozambique through the commitment of businesses that have years, and sometimes generations of experience, in every major sector of the economy. Portugal is present in Mozambique through its cultural influence and communications -- the RTPI television network is available and popular in Maputo (and, by the way, in Luanda, and Fall River, Massachusetts, and Newark, New Jersey). What struck me in the aftermath of my trip to Mozambique was that Portuguese business has a story to tell to potential U.S. partners, a story of how to succeed through affinity and understanding in a market that many potential investors might deem too risky to consider. One reason that we've put together this conference is to give Portuguese business a forum to tell this story, something I hope they'll continue to do on their own in the future.

I've tried to convey to you a notion of the strong national presence that both Portugal and the U.S. have in Africa.

But as you and I know, governments can help lead the way, but they can't create the conditions for economic development in Africa all by themselves, and that is why we're here today. Sub-Saharan Africa has the potential to be a dynamic area for economic growth in the opening years of this century. The business community can, and I'm convinced, will take the initiative in working to bring prosperity to Africa. Future rewards in business will go to those who are able to innovate, and who have the courage and foresight to commit to the diminishing number of emerging markets that exist worldwide. You've heard it said that God isn't creating any more prime beach-front real estate these days - - well I can let you in on a secret, he's not creating any new billion-person consumer markets, either.

We already have examples of Portuguese and American companies that have joined forces to create new ventures in Africa. Colonel Luis da Silva, the founder of (among other companies) the Lusomundo movie theater chain in Portugal, first worked with Time-Warner here, and later took their joint operation to Mozambique. I also understand that Euro-Amer, a company with Portuguese and U.S. participation that's with us here today, has plans to make new investments in Angola. Peter Chermayoff, a world famous architect who revolutionized the design of large-scale public aquariums all over the world, including the Oceanarium here in Lisbon, is working with the Portuguese construction firm Engil on a new aquarium that he hopes to build in Cape Verde.

A case of particular interest is that of Tertir-Portuguese Terminals Incorporated, a company that is working with two U.S. partners: Railroad Development Corporation and Edlow Resources. These companies have joined together with local shareholders in Mozambique to modernize and expand the Nacala inland railroad corridor. This $70 million project will benefit an entire region of Central Africa, providing Northern Mozambique, Malawi, Zambia and the Congo with better trade flow access to the excellent deep-water port at Nacala. This is the kind of model for investment that I think we can learn from, and replicate. Just so the point is not lost on any Portuguese firm here that's thinking of seeking out an American partner, let me remind you: there are pools of investment capital available in America dedicated for use in Africa.

That's what we're here to talk about, and we have the most knowledgeable speakers available to address these issues. I look forward to the discussion over the next two days, and I hope we'll establish the basis for making the concept of U.S.-Portuguese business cooperation in Africa a bright reality, one that will create new bridges and fresh bounties for three continents.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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