- The Washington Times - Friday, June 27, 2003

Secretary of State Colin L. Powell yesterday told African political and business leaders they must attack corruption head-on if their countries hope to prosper, warning that capital is “a coward” that shuns uncertainty and crime.

“You must end corruption, you must have transparency in your systems,” Mr. Powell told the Corporate Council on Africa, a business group that promotes trade and investment, which has been meeting here this week.

“Capital is a coward. It flees war. It flees disease. It won’t go near corruption,” he added.

Mr. Powell spoke a day after President Bush told the group he would increase support for African economies. U.S. business leaders said U.S. efforts to date to boost African economic growth rates appear largely unsuccessful.

But African countries must continue to reform to receive U.S. support, the president added.

Congress heard Wednesday that all tariffs between the United States and Africa must end if a 3-year-old African Growth and Opportunity Act (AGOA), designed to energize African economies, is to work.

Mr. Bush called on Congress to extend the law past its current deadline of 2008. He also announced that the World Bank would give $200 million in loans to support small business in 10 African countries over the next three years.

But he refrained from endorsing calls to end U.S. tariffs on key African exports.

“In Africa, the danger is that AGOA has created expectations that cannot be met,” Stephen Hayes, president of the Corporate Council on Africa, told the Senate Foreign Relations Committee on Wednesday. “As an investment tool, AGOA has simply not worked.”

Mr. Bush plans his first trip to sub-Saharan Africa as president next month. The July 7-12 tour will take the president to Senegal, South Africa, Botswana, Uganda and Nigeria.

A dozen African heads of state, key senators and major U.S. investors in Africa attended this week’s sessions.

AGOA opens U.S. markets mostly to light-industry products like textiles from African countries that meet criteria such as curbing corruption. From 2001 to 2002, imports under the law were about $9 billion, about 1 percent of all U.S. imports.

Mr. Bush said Thursday that “AGOA is helping to reform old economies, creating new jobs, is attracting new investment; most importantly, is offering hope to millions of Africans.”

Business leaders dealing with Africa described AGOA’s effect more modestly, releasing a report Monday on how to boost trade and investment.

Mr. Hayes said in written testimony to the Senate: “Most African nations do not yet benefit significantly from AGOA because they lack a manufacturing base and an infrastructure adequate to ensure that products easily and quickly reach their destinations.

“African nations remain dependent on one or two products to carry their entire economy,” he added. “AGOA, with its heavy emphasis on textiles and apparel, has done little to change this situation.”

A report by the Commission on Capitol Flows to Africa offers a 10-year strategy, recommending a U.S.-African free-trade agreement, extending AGOA past 2008 and additional investments in African economies. It also calls for an end to U.S. agricultural tariffs.

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