United Press International - June 5, 2002
Shihoko Goto, UPI Senior Business Correspondent

O'Neill has been renowned for his criticism of the billions of dollars that have been funneled into developing countries over the decades, with little progress to show for it. So when his office announced in March that he would be traveling to the world's most impoverished continent to see first-hand where taxpayers' money is going in the name of aid with none other than Bono, 42, the lead vocalist of the Irish rock band U2, it raised more than a few eyebrows.

While many Treasury followers dismissed the tour as a publicity stunt for the decidedly odd couple, it appears that visiting hospitals and schools across Uganda, Ethiopia, South Africa, and Ghana has tempered the 66-year-old O'Neill's tendency to brush off most development assistance efforts.

"Aid is helping, and standards of living are improving. But there is a long way to go ... it just isn't enough," the Treasury secretary said in a speech at Georgetown University Wednesday, having returned from Africa three days earlier. To be sure, the Sept. 11 attacks have heightened global awareness of the need to address poverty. It has particularly given the Bush administration to re-examine its stance on how to decrease the number of those living in abject conditions, rather than if the United States should even be involved in trying to help lift countries from poverty.

Indeed, President Bush in March unveiled a plan that the U.S. government would actually increase development assistance by $5 billion a year, bringing the total over 50 percent above current levels. The administration has also called for more grants, which poor countries will not have to pay back, rather than loans, which do need to be paid, even if only at a nominal interest rate.

Specifically, Bush has called for up to 50 percent of all U.S. foreign assistance to be provided in the form of grants to the world's poorest countries, most of which are in Africa.

Such financial commitment to alleviating global poverty is particularly striking, given that U.S. reluctance over the years even to pay its dues to the United Nations.

Still, the Bush administration's stance towards multilateral agencies, particularly the International Monetary Fund and the World Bank, remain far from warm and fuzzy.

One of the major conclusions O'Neill drew after his Africa tour was that huge projects costing billions of dollars -- the central focus of institutions such as the International Monetary Fund -- were unlikely to be an effective means of eradicating poverty. Rather, he said that industrialized nations could help poorer countries more by providing more money to specific projects, and encouraging private enterprise to flourish.

As such, O'Neill pointed out that the Bush administration should ensure that nations pursue a policy of good governance.

"Individuals have no chance for success without governments that fairly enforce laws and contracts, respect human rights and property, and fight corruption," he added.

O'Neill also said that future aid should be targeted to three main areas, namely providing clean water, guaranteeing primary education, and combating the human immunodeficiency virus and AIDS. He noted that half the population in some African countries did not have access to safe water, when infrastructure to ensure water sanitation could be provided for about $1,000 per village.

Meanwhile, he emphasized the need for children not only to go to school, but also to receive a higher quality of education in school than they do now, and he also pointed out the urgency of addressing the AIDS epidemic across Africa.

O'Neill peppered his speech with first-hand encounters with schoolteachers, students, doctors, and volunteers that he met during his visit, commenting on their bravery and undefeatable optimism about the future.

Yet, the former chairman of Alcoa Inc. remained at heart a businessman who focused on the bottom line. In particular, O'Neill highlighted the success stories of entrepreneurs in Africa, such as the flower-growers of Uganda and sporting clothes manufacturer in Ethiopia.

Far from being exploited by Western capitalist greed by growing roses and producing sneakers, O'Neill said Africans benefited from being employed by them at far higher wages than local industries.

And while some members of non-governmental organizations in the audience mumbled their opposition to such pro-globalization remarks, those of the Washington-based African diplomatic corps were particularly complimentary for O'Neill's view on entrepreneurs in the continent.

As for the question that pushed music magazine Rolling Stone's reporter among other journalists to follow the treasury secretary to Africa: What did he really think of Bono?

"We really weren't so odd. In fact, I think Bono and I found a lot in common," O'Neill said. To prove his friendship with the rock star was real, he whipped on a pair of blue wraparound shades.

"These were a gift from Bono," O'Neill said with a smile. "Nice."
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