O'Neill says Africa trip with Bono to energise development

US Treasury Secretary Paul O'Neill said his upcoming Africa trip with U2 lead singer Bono is designed to help start reversing 50 years of poor performance in development aid.

"We need a change in performance realisation from what's gone before... we've got to produce results," O'Neill said in a press briefing ahead of his two-week, four-nation trip to Africa.

O'Neill and Bono will visit Ghana, South Africa, Uganda, and Ethiopia, visiting health clinics and other facilities that have received aid in the past, and meeting with local political and business officials.

O'Neill will also attend in Ethiopia the African Development Bank's annual meeting, to discuss efforts to raise the effectiveness of financial assistance to the continent.

The record of development aid in the past is a poor one, O'Neill said, citing the fact that living standards have gone down in some countries over the years, despite aid.

"Lots of well intentioned things have been attempted over the last 50 years. Some of them have worked. Too many of them have not worked," he stated, illustrating the need for a new approach.

O'Neill said he does not intend to turn the trip into a "circus" by dishing out new aid money, staying at fancy hotels, and not seeing "the real world."

He and Bono will visit HIV/Aids clinics and other sites to determine conditions on the ground in Africa, to help establish the criteria for future US aid disbursement under President George Bush's new aid initiative.

The proposal would increase US unilateral development aid by $5bn a year by 2006, to $15bn annually.

"We don't want to see false fronts; I have no interest in doing splashy things... I want the facts and the circumstance to speak for themselves," he said.

He stressed that advance planning for the trip was designed to avoid unrepresentative model sites, but instead place emphasis on typical conditions.

"It is very important for people who would make good policy to understand the real world," he said.

The entourage will hope "to learn things that will help shape the distribution of funds that will be more aligned with the real world and will more likely produce real results than anything that's gone before," O'Neill said.

Bono's inclusion in the trip will be a great help, O'Neill said, because of the attention that his popularity brings as a pop-star.

"He will help us to bring eyes to this subject," he said, particularly as young people listen to Bono.

Separately, O'Neill acknowledged that African countries will raise the subject of this week's enactment by the Bush administration of a bill granting $181.5bn in subsidies to the US agriculture sector over the next decade.

The World Bank has called for an end to such practices, arguing that such aid produces excess capacity in agricultural products and excessively low prices.

This prevents some African countries from being able to produce enough foodstuffs to meet domestic needs, let alone export to advanced industrialised countries, according to critics.

The amount of subsidies dwarfs aid flows, the World Bank has noted.

O'Neill said most countries have protections and aid for their agriculture sectors, creating a global problem that needs to be addressed on a multilateral basis.

He also said high trade and tariff barriers between African countries themselves has inhibited export growth on the continent.

The Secretary highlighted the need for political stability in generating development, noting that Ghana and South Africa have both established democratic governments. Ghana recently accomplished its first peaceful transition of power from one party to another.

He also hailed Uganda's leadership in addressing the HIV/Aids crisis. The country has sharply reduced HIV infection rates in recent years, according to World Bank data.

At the African Development Bank meeting, O'Neill said he will explain the US proposal to switch World Bank aid to outright grants, from the current practice of giving highly concessional loans.

He also will highlight, en route to Africa, the European Bank for Reconstruction and Development (EBRD) as a model for using loans to support small businesses and entrepreneurs.

O'Neill will stop in Bucharest over the weekend to attend the EBRD's annual meeting.

The African Development Bank ultimately could benefit by using the EBRD as a model, he said.