United States Department of State (Washington, DC)
3 October 2007
document
Washington, DC — Gabon is one of sub-Saharan Africa's most prosperous nations thanks to its oil wealth, and although nearby Sao Tome and Principe is one of the world's poorest nations, it is a vibrant, multi-party democracy "on the threshold of a dramatic change" thanks to that country's potential oil resources, the Ambassador-designate to both those nations said October 3.
In testimony before the Senate Foreign Relations Committee, Eunice S. Reddick said that even though Gabon is a prosperous nation, "transparency, accountability, and corruption must be addressed if Gabon is to surmount its economic challenges."
Oil accounts for 77 percent of Gabon's exports, she told the lawmakers. She warned that the country must move from a single-resource petroleum-based economy to a diversified economy driven by the private sector and focused on poverty reduction.
Turning to Sao Tome and Principe, she said it is on the threshold of dramatic change due to the prospects for development of oil resources. "Carefully managed, impending oil revenues could build infrastructure, fund education and training and reduce poverty. Mismanaged, an oil boom could threaten Sao Tome and Principe's young democracy, security and stability," she warned.
Following is the text of Reddick's statement, as prepared for delivery:
Eunice S. Reddick
Ambassador-Designate to the Gabonese Republic and the
Democratic Republic of Sao Tome and Principe
Senate Foreign Relations Committee
October 3, 2007
Mr. Chairman and Members of the Committee: I am honored to appear before you today. I wish to express my gratitude to President Bush and to Secretary Rice for the trust and confidence they have placed in me as their nominee for ambassador to the Gabonese Republic and the Democratic Republic of Sao Tome and Principe. If confirmed, I look forward to working with you and other Members of Congress to advance the interests and values of the American people in Gabon and Sao Tome and Principe.
I would like to take this time to introduce my husband, Marc Wall, who recently returned from Chad where he served as Chief of Mission, my daughter Sarah, and son Gregory.
Gabon is one of Africa's most stable countries despite its location in a volatile region. When nearby conflicts have threatened the safety of American citizens, Gabon has provided safe haven for evacuees. Gabon has been a helpful partner to the United States in the Central Africa region, in Africa as a whole, and in multilateral fora such as the UN. President Bongo's seniority among African leaders and his knowledge of regional issues have allowed him to play an important role in attempts to resolve regional conflicts. The United States has trained Gabonese forces under the African Contingency Operations Training Assistance (ACOTA) program, and today Gabon leads the peacekeeping forces in the Central African Republic, providing the majority of deployed forces there. Members of the Gabonese armed forces receive professional training under the International Military Education and Training (IMET) programs. To promote the security of the strategic Gulf of Guinea region, origin of a growing share of U.S. oil imports, U.S. military engagement with Gabon has developed in several areas, including training exercises, ship visits, and high-level exchanges. If confirmed, I will work closely with the Gabonese civilian and military leadership, our European Command and the new Africa Command to ensure our relations with Gabon help contribute to a safe and secure Gulf of Guinea region.
President Bongo has held office since 1967 and in December 2005 he was re-elected for a new seven-year term. Although the 2005 presidential election was marred by irregularities, legislative elections in December 2006, in which the ruling Gabonese Democratic Party (PDG) won two-thirds of the seats, were deemed free and fair by independent observers. However, a single party -- the PDG -- has remained in power since 1968, and democratic institutions, particularly civil society, remain weak. There are some restrictions on press freedoms, and the legal and judicial system is weak and susceptible to government influence. Of particular concern is trafficking in persons, and child labor resulting from trafficking. Gabon has taken steps to address the problem of trafficking of children from neighboring African countries, such as arresting alleged traffickers and providing facilities for victimized children, but more must be done to combat this problem. The United States has worked with Gabon on this issue mainly via a regional, Department of Labor-funded project. If confirmed, I will continue to engage the government to do more to halt child trafficking; I will also continue to engage leaders from government, opposition parties, and civil society to increase respect for human rights issues, and further strengthen democratization.
Gabon is one of sub-Saharan Africa's most prosperous nations, thanks to its oil wealth. Oil accounts for 77% of Gabon's exports, 56% of government revenues, and 45% of GDP. Although oil earnings have given Gabon one of the highest per capita GDPs in sub-Saharan Africa, income distribution is extremely skewed. Gabon's ranking on human development indicators is not commensurate with its per capita GDP ranking. Recent high oil prices have increased production, but oil production and revenues are expected to continue their gradual decline. To increase economic opportunity for its citizens, Gabon must move from a single-resource petroleum-based economy to a diversified economy driven by the private sector and focused on poverty reduction. There is the potential for economic diversification and growth in ecotourism, natural gas, fishing and aquaculture. timber, minerals, and palm oil production. However, diversification efforts will face significant challenges in terms of the lack of skilled laborers, and the lack of infrastructure.
Transparency, accountability, and corruption must be addressed if Gabon is to surmount its economic challenges. Although much work remains to be done regarding implementation, the government of Gabon has publicly committed itself to the principles and criteria of the Extractive Industries Transparency Initiative (EITI), which leverages multi-stakeholder partnerships to encourage governments and companies to publish what they pay and what they receive in relation to extractive industries. We hope that Gabon will take full advantage of its new three-year program approved by the International Monetary Fund to move ahead with necessary economic reforms. If confirmed, I will support Gabon's economic diversification efforts by encouraging good, transparent governance; sound economic management; and private-sector led development. I will also encourage greater use of measures provided under the African Growth and Opportunity Act (AGOA) to increase Gabon's trade with the United States and spur American investment in Gabon.
Nearly 85% of Gabon is covered by forests with rich and diversified resources. In 2002, President Bongo set aside 10% of Gabon's territory to create a national park system, but the nation's continued commitment to environmentally responsible management requires support. Gabon seeks to develop ecotourism as part of its economic diversification strategy. However, high raw material prices have spurred interest in exploration and resource extraction in many new areas, and these sometimes generate conflicts with conservation projects. Continued political and financial support from the United States and continued engagement by international NGOs will be required to sustain progress in this area. In 2002, the United States launched the Congo Basin Forest Partnership at the World Summit on Sustainable Development, recognizing the importance of the world's second largest tropical forest. Since then, the United States has worked closely with Gabon and five other countries of the Congo Basin, other donor countries, private sector entities, and NGOs to help conserve and sustainably manage the Congo Basin forests. The USG-funded Central African Regional Program for the Environment (CARPE) plays a pivotal role in implementing USG programs on the ground. If confirmed, I will continue to support this important work.
Let me now turn to the other country to which I am nominated to serve as Ambassador. Sao Tome and Principe is an island state located off the west coast of Africa. It is the second smallest and one of the poorest countries in Africa. Nevertheless, it is a vibrant, multiparty democracy and since the democratic reforms of the early 1990s has had a history of free and fair elections. A coup attempt in July 2003 and a near collapse, of the government in 2005 challenged the country's fragile democracy, but successful presidential and legislative elections in 2006 created a foundation for long term stability.
Sao Tome's economy historically centered on cocoa exports, but production today is weak and the government depends heavily on foreign donors to meet its obligations. Despite scarce resources, the government has done a relatively good job of meeting its people's needs, and Sao Tome and Principe ranks as a "medium human development" country in the UN index.
Sao Tome and Principe is now at the threshold of a dramatic change with prospects for development of oil resources. Carefully managed, impending oil revenues could build infrastructure, fund education and training, and reduce poverty. Mismanaged, an oil boom could threaten Sao Tome and Principe's young democracy, security and stability.
The country is already experiencing the impact of oil money through multi-million dollar oil contract signature bonuses that have recently been agreed. Corruption presents a growing threat in this environment. To address this threat, the government of Sao Tome and Principe has adopted an exemplary oil revenue management law designed to combat corruption and promote the sound management of oil revenues. In addition, the government of Sao Tome and Principe has publicly committed itself to the principles and criteria of EITI. Furthermore, in January 2005 Sao Tome and Principe set a new standard among EITI-committed countries when the government signed a production-sharing contract with three oil companies that included a clause on transparency that makes specific mention of the EITI principles. U.S. oil companies have already established a presence and are investing in the development of Sao Tome and Principe's potential offshore petroleum resource.
The prospect of oil wealth is increasing expectations among the nation's citizens, but production is not expected for at least another five years. Whether or not oil revenues flow in the fixture, broad and sustainable development requires the creation of a business climate that can attract private investment. Today, high taxes, poor public services, and onerous business regulations compound the disincentives inherent in Sao Tome and Principe's small market size, with a population of less than 200,000 people.
The United States is committed to assisting Sao Tome and Principe to improve institutional capacity needed to reduce poverty and stimulate economic growth. On September 12, the Board of Directors of the Millennium Challenge Corporation (MCC) approved a two-year, $8.66 million Threshold program to help the Government of Sao Tome and Principe to increase revenues through improved tax and customs administration and enforcement as well as to reduce the time and costs associated with starting a business. The MCC Threshold program will complement a World Bank-funded project to enhance public expenditure management.
If confirmed, I will support the MCC program, and other efforts to improve economic performance and efficiency. I will support U.S. business interests and find ways to encourage U.S. investment. I will also work with the government and the donor community to ensure that Sao Tome and Principe is prepared to invest oil revenues wisely in the country's development and its people.
The United States is engaged in increasing the capacity of the security forces of Sao Tome and Principe with an emphasis on maritime security forces in the Gulf of Guinea. We are working together closely to help develop a Coast Guard. Sao Tome and Principe welcomes our ship visits, and participates in high level military exchange programs and training exercises. The purpose of these programs is to enhance the professionalism of the Sao Tome and Principe armed forces.
Since the early 1990s, Sao Tome has been the home of a $50 million transmitting facility for Voice of America. The island's location makes it ideal for transmitting and relaying programs over long distances.
If confirmed as Ambassador, no goal will be more important than protecting the lives, interests and welfare of Americans living and traveling in Gabon and Sao Tome and Principe. In addition, I will work with the leadership and peoples of the two nations to foster stability throughout the region, support good governance and democratization, and increase economic prosperity. While terrorists have not focused on either country, I will work with both governments to seek to deter and prevent terrorist activities and maintain counterterrorism cooperation.
Mr. Chairman and Members of the Committee, if confirmed, I look forward to serving as our next Ambassador to the Gabonese Republic and the Democratic Republic of Sao Tome and Principe. I would be pleased to respond to any questions you might have.
Thank you.
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