Secretary Paulson Discusses Africa's Economic Development and Natural Resource Policies

During a visit to three African countries, the Secretary of the U.S. Treasury, Henry M. Paulson, Jr., delivered an address to the Corporate Council on Africa's U.S.-Africa Business Summit in Cape Town, South Africa. The following is an excerpt from that address. In it, Secretary Paulson talks about AWF's Manyara Ranch.

Africa is a unique continent: diverse in people and heritage, with some of the most spectacular geography and biodiversity on the planet. All too often, however, those who do not know Africa well associate the continent with issues like famine, conflict and disease. Tonight, I will talk about a much different Africa, one with which I suspect most of you are more familiar -- a continent of diverse nations increasingly defined by economic opportunity and promise.

Most importantly, I will talk about an Africa where leaders are taking control of their own economic futures and continuing to move beyond reliance on donors.

Evidence of Progress -- Growth and Investment

On this visit to Africa, I have seen the economic advances ushered in by a new generation of leaders. Improved fiscal and monetary policies, combined with favorable global conditions and strong commodity prices, have had dramatic consequences across the continent: annual GDP growth has exceeded 5 percent for half a decade, inflation rates have dramatically declined, debt levels are more sustainable and the IMF projects that, this year, foreign exchange reserves will reach record levels. Yesterday, in Arusha, I met with the economic leaders of the East African Community -- it was heartening to see the progress those countries have made since I last visited that part of the world in the early 1990s.

Yet, to ensure benefits for the long run, Africa's leaders and people must maintain a firm commitment to reform, combat corruption, respect human rights, adhere to the rule of law and spread the benefits of economic growth to more of Africa's population. Inclusive growth is not easy. As President Bush has observed, "Real prosperity is the work of many years. It's hard work."

United States Supports Reform Efforts

The United States has long supported Africa. We have focused significant health assistance on those who are most needy, such as through the President's Malaria and HIV initiatives. Our economic assistance is increasingly directed towards supporting countries where economic policies reflect the lessons learned over the last 30 years. These lessons teach us the importance of market principles, of sound fiscal and monetary policies, transparency and the rule of law.

U.S. support is only one component of Africa's growing economic promise; what really matters is African leadership. Four areas where African leadership is essential to accelerate and sustain development are natural resource policies, financial markets, business climates, and free trade.

Sustainable Natural Resource Policies

This is a vast continent -- 48 countries, 2,000 languages and 750 million people. It has some of the most remarkable geographic and biological diversity on the planet. Natural resource issues are critical for Africa's future: they are an essential part of the continent's heritage and figure prominently in economic opportunities, but can often be the spark in regional conflicts. Throughout my career, I have maintained an ardent interest in the conservation of land and wildlife.

Yesterday, I visited Manyara Ranch and saw an innovative example of how Africa can both preserve its heritage and create economic opportunities for its people. The ranch land is a critical migratory corridor for a broad range of species from nearby parks, and is also important for the cattle raising activities of the local Maasai tribes. The Africa Wildlife Foundation -- with support from USAID -- has set up a land trust that seeks to make the ranch commercially viable through tourism and beef sales, with a plan to use the proceeds to protect these valuable tribal lands.

The U.S.-sponsored Congo Basin Forest Partnership provides another model for fostering sound management practices and involving local communities so that conservation's benefits align with the perceived costs. The partnership is a regional initiative which brings together the governments of the Congo Basin with non-regional partners such as the U.S., France and various NGOs. It fights illegal logging and poaching while improving the livelihoods of those who depend on the forest. The Partnership has already trained thousands of students and professionals in forestry and resource management, strengthened local and national institutions devoted to national resource protection, and helped establish new national parks in the Congo Basin region.

I know that some may believe that these initiatives are a luxury. But I know that natural resource protection is key to Africa's longterm, sustainable, and inclusive economic advancement. We all know that there are significant economic and political risks for mismanagement of natural resources. I believe that Africa can unlock real economic potential through careful management of its natural resources.

Conclusion

In the last 30 years, the world has experienced an unprecedented reduction in global poverty. China, a country I have come to know well, and India -- where I was just last month -- have both shown strong commitment to implementing sound economic policies, and to creating economic opportunities for their populations. As a result, hundreds of millions of their people have emerged from poverty and created businesses, acquired jobs, and enriched their lives in countless ways. In Africa -- just as in China, India, and other places in the world -- reforms, once started, have to be completed in order to realize their full benefits.

It is heartening to see that African leaders are showing a strong commitment to the difficult work of reform. Results do speak for themselves. We all know Africa is rich in talent, resources and tradition. All it takes is good leadership to unlock this potential.

Read the full speech here.

Copyright 2007 U.S. Department of the Treasury. All rights reserved.