[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
UNITED STATES-SOUTH AFRICA RELATIONS: PRESENT AND FUTURE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON AFRICA
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
Thursday, October 14, 1999
__________
Serial No. 106-101
__________
Printed for the use of the Committee on International Relations
U.S. GOVERNMENT PRINTING OFFICE
64-474 CC WASHINGTON : 2000
COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa TOM LANTOS, California
HENRY J. HYDE, Illinois HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey ENI F.H. FALEOMAVAEGA, American
DAN BURTON, Indiana Samoa
ELTON GALLEGLY, California MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina ROBERT E. ANDREWS, New Jersey
DANA ROHRABACHER, California ROBERT MENENDEZ, New Jersey
DONALD A. MANZULLO, Illinois SHERROD BROWN, Ohio
EDWARD R. ROYCE, California CYNTHIA A. McKINNEY, Georgia
PETER T. KING, New York ALCEE L. HASTINGS, Florida
STEVE CHABOT, Ohio PAT DANNER, Missouri
MARSHALL ``MARK'' SANFORD, South EARL F. HILLIARD, Alabama
Carolina BRAD SHERMAN, California
MATT SALMON, Arizona ROBERT WEXLER, Florida
TOM CAMPBELL, California STEVEN R. ROTHMAN, New Jersey
JOHN M. McHUGH, New York JIM DAVIS, Florida
BILL LUTHER, Minnesota EARL POMEROY, North Dakota
LINDSEY GRAHAM, South Carolina WILLIAM D. DELAHUNT, Massachusetts
ROY BLUNT, Missouri GREGORY W. MEEKS, New York
KEVIN BRADY, Texas BARBARA LEE, California
RICHARD BURR, North Carolina JOSEPH CROWLEY, New York
PAUL E. GILLMOR, Ohio JOSEPH M. HOEFFEL, Pennsylvania
GEORGE P. RADANOVICH, California
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
Richard J. Garon, Chief of Staff
Kathleen Bertelsen Moazed, Democratic Chief of Staff
------
Subcommittee on Africa
EDWARD R. ROYCE, California, Chairman
AMO HOUGHTON, New York DONALD M. PAYNE, New Jersey
STEVE CHABOT, Ohio ALCEE L. HASTINGS, Florida
TOM CAMPBELL, California GREGORY W. MEEKS, New York
GEORGE RADANOVICH, California BARBARA LEE, California
THOMAS G. TANCREDO, Colorado
Tom Sheehy, Subcommittee Staff Director
Malik M. Chaka, Professional Staff Member
Charisse Glassman, Democratic Professional Staff Member
Charmaine V. Houseman, Staff Associate
C O N T E N T S
----------
Page
WITNESSES
Susan E. Rice, Assistant Secretary, Bureau of African Affairs,
U.S. Department of State....................................... 8
J. Daniel O'Flaherty, Executive Director, U.S.-South Africa
Business Council............................................... 20
Judson Ray, Special Agent, Unit Chief, International Training and
Assistance, Federal Bureau of Investigation.................... 22
APPENDIX
Prepared statements:
Chairman Edward Royce............................................ 32
Chairman Benjamin A. Gilman...................................... 33
Representative Donald Payne...................................... 35
Asst. Secretary Rice............................................. 36
Mr. Judson Ray................................................... 43
Mr. J. Daniel O'Flaherty......................................... 51
Submissions:
International Republican Institute fact sheet on South Africa.... 57
National Democratic Institute fact sheet on South Africa......... 58
UNITED STATES-SOUTH AFRICA RELATIONS: PRESENT AND FUTURE
----------
Thursday, October 14, 1999
House of Representatives,
Subcommittee on Africa,
Committee on International Relations,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2 p.m., in
room 2200, Rayburn House Office Building, Hon. Edward R. Royce
(Chairman of the Subcommittee) presiding.
Present: Representatives Royce, Campbell, Payne, Hastings,
Meeks, and Lee.
Also present: Representative Gilman.
Mr. Royce. Today's hearing of the Subcommittee on Africa
will now come to order.
Today the Subcommittee will look at the bilateral
relationship between the United States and South Africa, one of
the most important relationships our country has in Africa.
Since it made its exceptional transition to a nonracial
democracy, U.S. relations with South Africa have considerably
broadened. No longer dominated by apartheid, the U.S.-South
Africa agenda now tackles issues of security, health, and the
environment. With the U.S. being South Africa's largest trading
partner and South Africa being the dominant buyer of America's
exports to Africa, economic issues have a heightened
prominence. Needless to say, the new agenda, while challenging,
is most welcome.
The U.S.-South Africa Binational Commission, up and running
for 4 years now, indicates the importance of South Africa to
the United States. South Africa faces many challenges. Its
economy is struggling. It faces a serious crime problem, which
we will hear about. In these areas, it is in the U.S. interest
to work with the new government of Thabo Mbeki through the
Binational Commission for a better future in South Africa.
Within Africa, the U.S. has given South Africa exceptional
attention. While it is important that this not come at the
expense of other African countries, South Africa's potential
and importance warrants this attention. Today the Subcommittee
will have a chance to better appreciate the challenges and
opportunities of our important relationship with South Africa.
Before proceeding, I would like to acknowledge the death of
Julius Nyerere, the former president of Tanzania. He died last
night in a London hospital. Nyerere is a man who defined his
age, who will be remembered for his opposition to colonialism,
and his opposition to apartheid, as well as his modest
lifestyle.
Mwalimu, Swahili for teacher, which he was commonly called,
remained active in public life after leaving office in 1985. At
the time of his death, he was working to resolve the conflict
in Burundi. Our condolences go to the Nyerere family and to the
Tanzanian people.
I will now recognize the ranking member of the Subcommittee
for an opening statement.
Mr. Payne?
[The prepared statement of Mr. Royce appears in the
appendix.]
Mr. Payne. Thank you very much, Mr. Chairman, for calling
this very important hearing on South Africa. I, too, would like
to mention former president of Tanzania, Julius Nyerere, the
father of the independence movement. Today Africa has lost a
great man. Commonly referred to as ``The Conscience and Teacher
of Africa,'' President Nyerere was one of the leaders who led
the drive to end the white minority rule in South Africa and
Rhodesia and to stop apartheid.
In 1979, he defied the OAU and sent troops to Uganda in
outrage of Idi Amin's policies in Uganda. He has been at the
forefront of helping countries in this region and has used
diplomatic skills to end the war in Burundi and in the Congo.
President Nyerere was among only a handful of African
presidents to voluntarily leave office. I had the privilege of
meeting President Nyerere for the first time in 1972 and have
been a long admirer of his ever since.
Like former president Nyerere, President Nelson Mandela is
also universally regarded not as a hero but almost a saint. His
refusal to enact vengeance on those who mistreated him goes
beyond the tight-lipped resentment of a statesman. He, as you
know, invited his jailor to his inauguration.
Black South Africans had no democratic rights, no
possibility of bringing about any peaceful change. They didn't
even have basic human rights, as was made very obvious by the
appalling massacre at Sharpeville in March 1960. The police
fired indiscriminantly into an African crowd, killing 67 and
wounding another 186, most of them shot in the back.
Far from being repentant about this atrocity, the South
African government became more repressive and declared the ANC
to be illegal. After 5 years that culminated with the 1994
elections, the ANC, under the leadership of President Nelson
Mandela, and now under the presidency of Mr. Mbeki, is moving
South Africa from an oppressive apartheid regime to give birth
to a new democratic movement.
South Africa has a diversified and productive economy and
functioning democracy. Nevertheless, the legacy of racial
inequality is still a problem. Let me share with you for a
moment this report by the South African government.
Since 1994, more than 22,700 former liberation fighters and
black homeland soldiers have been integrated into the South
African national defense force. Pockets of tension and
resentment clearly remains. In a confidential report that
became public last year, military officials documented
troubling disparities in the disciplining of black and white
soldiers and the pay of men of the same rank, which is still
unequal.
Moreover, unemployment is between 40 and 68 percent, with
most black South Africans below the poverty line.
In conclusion, let me say that I am glad to see that
several central banks have backed away from the plan to sell
gold. When Congressman Campbell and I traveled to Zimbabwe for
the funeral of vice president Joshua Nkomo, and to South
Africa, they reiterated the problem with the gold sales and the
IMF.
It has been reported that as many as 15 people are
dependent on one South African gold miner. A possible layoff of
20- to 25,000 miners, would impact hundreds of thousands of
people.
So, Mr. Chairman, once again, let me thank you for calling
this very important hearing.
Mr. Royce. Thank you. I thank you, Mr. Payne.
Any other members wish to make an opening statement?
Mr. Campbell. I do.
Mr. Royce. Mr. Campbell?
Mr. Campbell. We are joined by the Chairman of the Full
Committee. I will certainly yield if he has to speak first, but
don't forget me.
Mr. Gilman. I do have an opening statement, Mr. Chairman.
Mr. Royce. Mr. Chairman, if you would like to make a
statement at this time. We will hear from Mr. Gilman of New
York, Chairman of the full International Relations Committee.
Mr. Gilman. Thank you, Chairman Royce, and I appreciate
your Subcommittee's ongoing diligence and the wisdom of holding
this hearing. There is a natural tendency for us to focus on
the crisis of the day, and, regrettably, Africa seems to host a
number of crises daily. This Subcommittee has not shied away
from addressing the complex emergency situations in Congo, in
Sudan, in Sierra Leone, Ethiopia, and Eritrea, among others.
But it would be a mistake to neglect crucial countries like
South Africa simply because chaos does not currently reign
there. It was not very long ago when South Africa was itself in
political crisis. Hearing after hearing was held on the South
African regime, and most analysts predicted that the end of
apartheid would come only through bloodshed.
I remember when it became apparent that South Africa had
developed nuclear weapons, and I shudder to consider what might
have been. However, our relief at the positive developments in
South Africa should not blind us to the serious challenges
facing that nation and this region.
Unemployment continues to be a major problem there. Nearly
everyone in South Africa works, but only half the working
population has a regular job. The rest eke out a marginal
living from 1 day to the next. The infection rate of HIV/AIDS
is shocking, and it appears to be growing. The murder rate in
South Africa remains 10 times as high as our own unacceptably
high rate.
As if all of these challenges were not enough, it is now
obvious that a rainbow coalition of transnational criminal
organizations has set up shop in South Africa, threatening the
very institutions of its hard-won democracy. I would like to
focus for a moment on that topic.
I am very grateful to the Subcommittee for inviting Special
Agent Jud Ray of the FBI's International Training and
Assistance Unit to testify today. Agent Ray provided me with an
excellent briefing on the transnational crime situation in
South Africa 2 years ago.
At that time, we discussed the value of establishing in
Africa an international law enforcement academy, ILEA, modeled
after the highly successful program in Budapest, Hungary.
Sophisticated international criminal organizations cannot be
fought without cooperation among national law enforcement
agencies. But as with NATO armies, those crime fighting
agencies must share a common understanding and approaches in
order to cooperate effectively. That cannot happen overnight,
and it cannot happen without some capacity building.
This Committee has urged the Department of State on
numerous occasions to move forward with an ILEA Program before
the Russian, Nigerian, Columbian, Italian, and Chinese mafias,
all of whom are present in South Africa at this moment, become
deeply entrenched.
I know that Assistant Secretary Rice recognizes the value
of that program. We thank her for being here today. I know that
she and the African Affairs Bureau at the State Department have
been calling for this program, and I am now hopeful that it
will soon become a reality. But why it has taken so long I,
frankly, cannot understand. I hope that Secretary Rice and
Agent Ray may be able to shed some light on this matter and be
able to help us move along this project.
As one additional indication of the congressional support
for this endeavor, I have offered language in a State
Department reauthorization bill that directs the Secretary of
State, in consultation with our Attorney General and our
Treasury Department, to provide our Committee with a detailed
operational plan for an African ILEA within 6 months.
Mr. Royce, Chairman Royce, members of the Subcommittee,
distinguished witnesses, I thank you for your efforts here
today. If I must depart before the completion of the hearing--I
do have another hearing--I would ask that you allow me to
submit additional questions for the record.
Thank you, Mr. Chairman.
Mr. Royce. Thank you, Chairman Gilman.
We will now go to Mr. Hastings of Florida for a brief
opening statement.
Mr. Hastings. Mr. Chairman, thank you very much for holding
this hearing. I would like to thank the witnesses who are
appearing before us and with particular emphasis on Assistant
Secretary for the Bureau of African Affairs, Secretary Rice,
our good friend, who has done an extraordinary amount of work.
Sometimes hearings of this nature don't permit us to gain
insight to the extraordinary information that she and the staff
and others that work with her have gathered. Hopefully members
will take advantage of opportunities to speak with Secretary
Rice personally, who is an extremely accessible person,
regarding matters ongoing.
Mr. Chairman, I have a specific interest today, and the
Chairman of the Full Committee has alluded to it, as has my
colleague, the ranking member of this Subcommittee, and that is
the major problem of HIV/AIDS. I know that there are numerous
issues of necessity we must address our concerns for.
I can't imagine any issue in South Africa, the whole
continent of Africa, indeed, in the world, as pertinent as the
issue of HIV/AIDS. I will be particularly interested in
Secretary Rice's views in that regard once the questioning
period begins.
I feel, Mr. Chairman, as true leaders of democracy, the
United States must continue to encourage the new South Africa
to remain committed to its current direction and continue in
the areas of economic liberalization. We must continue to work
with South Africa and build a nation which truly belongs to
all.
I do urge that we be mindful, that in the period of time
that I have been here we have continuously hammered the budget
as it pertains to the continent of Africa. The DFA has usually
$700 million--$513 million this year--but that doesn't include
all of the moneys. But if we keep cutting, we are not going to
look very good in the eyes of those who have the greatest need.
Thank you, Mr. Chairman.
Mr. Royce. Thank you, Mr. Hastings.
Mr. Campbell of California.
Mr. Campbell. Mr. Chairman, I thank you for holding this
meeting. I thank you for authorizing the travel that has
allowed me and Congressman Payne in particular to visit Julius
Nyerere, and I just wanted to have a few comments about him to
start.
My thanks also go to the Chairman of the Full Committee,
Mr. Gilman, who has authorized such travel and who has shown
such a great interest in Africa, for which I am personally
grateful.
Mr. Payne was unavoidably detained, and I do want to just
put into the record that I did sing his praises at the earlier
part of our hearing today in the markup. He is the original co-
sponsor of both resolutions that passed, one dealing with
Eritrea and Ethiopia, the other dealing with Somaliland, or the
area of Somalia north, which formerly was called Somaliland. I
give him tremendous credit for helping in that--in those two
resolutions and teaching me so much about Africa.
My thoughts about Julius Nyerere are very short but from my
heart. He welcomed us to our home. He had one title and that
was ``Mwalimu''--teacher. That was the title that mattered most
to him, not president, not maximum leader, or any other
military title. It was ``Mwalimu,'' teacher.
He taught us--I think he taught Africa--commitment to human
rights and a commitment to panafricanism, not that I or any of
us agree with every aspect of his policy. The point is he cared
to teach; he did not care to hold on to power. He succeeded in
what he set out to do. So God rest his soul, and I yield back.
Mr. Royce. Thank you.
Mr. Meeks of New York.
Mr. Meeks. Thank you, Mr. Chairman. Let me thank you for
holding this hearing, and I want to join my colleague and
friend, Mr. Hastings, in thanking the witnesses that are here
to testify today, but, in particular, Secretary Rice, because I
have found that she has always brought forth some very
pertinent and formative information each time that we conduct
these hearings. I want to say thank you to her.
Since the election of Nelson Mandela in 1994, we have seen
South Africa blossom into an economic and political force. Yet,
as is the case with every new and emerging country, there comes
growing pains, and South Africa proves to be no different under
the new democratic republican regime that is now there in South
Africa.
While she benefits from a billion dollar economy, yet she
struggles with high unemployment and an unskilled labor force.
After prevailing over apartheid for 40 years, South Africa is
succumbing to one of the fastest-growing number of AIDS cases
in the world, which threatens to wipe out some six million
people over the next 10 years.
South Africa serves as a mediator across the continent of
Africa. She is combatting a surge of high crime and corruption
in her own backyard, and some of those similarities at times I
draw to our own country.
Mr. Chairman, although we say that that looks grim, with
the reference to the high crime and the unskilled labor force
and unemployment, I believe that South Africa has a bright,
bright future. Under the leadership and direction of President
Mbeki, South Africa will and has taken giant steps in securing
her economic future by signing a trade development and
cooperation accord with the European Union.
I feel that the bill that we recently passed here in
Washington with the African Growth in Opportunity Acts will
also provide some additional strength for South Africa.
Second, additionally, South Africa has taken the aggressive
and often controversial position of dealing with pharmaceutical
companies in obtaining inexpensive, preventive drug treatment
and medicines to combat the spread of AIDS. I think that we
have an obligation to help them in that mission, so that they
can get the kind of drugs that are necessary to prevent the
spread of AIDS.
Not only does South Africa serve as a role model for other
African nations, she continues to lead the Southern African
Development Community (SADC) toward economic prosperity. We
have an opportunity here in America to do the right thing
toward South Africa. South Africa serves as a beacon of hope, a
stabilizing force, to a war-torn and conflict-ridden continent.
As we enter the 21st century, the U.S. policy needs to
reflect a more progressive and proactive role in strengthening
and fostering economic opportunities and political partnerships
so that South Africa continues on course toward global
prosperity.
Again, Mr. Chairman, I thank you for conducting this
hearing. I think that we will be able to go a long way.
Mr. Royce. Thank you, Mr. Meeks.
Ms. Lee of California?
Ms. Lee. Thank you, Mr. Chairman, and I would like to also
thank you and our ranking member for calling this hearing.
I, too, am saddened today by the death of Julius Nyerere.
As a very young student, I was deeply influenced by his
leadership and his intellect, and I hope that all of us will
remember him as we move forward in our overall development of
our U.S. policy toward Africa, which I think is moving along in
a very productive and positive fashion, thanks to Honorable
Susan Rice and all of those who are helping us do this.
Like so many in this country, I have a long history of
involvement with South Africa, primarily as an anti-apartheid
activist during the height of the anti-apartheid movement. I
was actually working for Congressman Ron Dellums, and, as we
know, Ron played a pivotal role in bringing sanctions against
the apartheid regime of South Africa, putting the United
States, I would say, on the right side of history.
In 1994, as an international poll observer in South Africa,
I had the humbling and incredible experience to witness the
first free, peaceful, democratic elections in the country. It
was really an opportunity for which I will always be grateful.
Now, of course, in the 106th Congress, we have all been
engaged in debate on creating a comprehensive national trade
policy with Africa. I believe that that time is long overdue,
and I am pleased that as a part of our hearing today we will
address U.S.-South Africa economic partnerships.
I also want to mention--and I mention this with pride--when
I was in the California legislature, after many years of hard
work and long hours, my home state of California opened the
California Trade and Investment Office in South Africa, which
is really the first state to do so subsequent to the end of
apartheid.
The investment of California businesses in South Africa
continues to expand. We continue to take trade delegations,
friendship delegations, to South Africa, which are incredible
successes.
Finally, let me just say in terms of our priorities, and in
terms of economic partnerships, we must address, as my
colleagues have said, in a substantial and comprehensive manner
the pandemic of HIV and AIDS. We know that in South Africa
there are 1,500 new recorded cases of HIV and AIDS each and
every day. I had the privilege to travel to South Africa with
the White House this year to look at the impact of HIV and AIDS
on orphans. It is staggering what we found out.
So we have been working very closely with the Embassy of
South Africa to understand the scope of this crisis in South
Africa and to support creative courses of action to really help
combat this disease.
I want to thank the Embassy of South Africa for supporting
legislation, which is really the first country to support
legislation that I have introduced, H.R. 2765, the Aids
Marshall Plan for Africa. For this, again, I am thankful and
grateful, and I think all of us here remain committed to fight
the HIV and AIDS epidemic in South Africa.
Thank you, Mr. Chairman. Thank you, Mr. Payne, for this
hearing. I think the future success of South Africa depends on
so many interconnected factors, among them the health and
security of the people of South Africa.
Thank you.
Mr. Royce. Thank you, Congresswoman Lee.
We will go to our first panel. We have Assistant Secretary
of State for African Affairs, Susan Rice, who previously served
at the White House as Special Assistant to the President and
Senior Director for African Affairs.
Dr. Rice earned a master's and a Ph.D. in international
affairs from Oxford University. She recently was invited to
return to deliver the 1999 Braham Fisher Memorial lecture on
America's Africa policy there.
Welcome, Dr. Rice. If you would keep your remarks to five
to 10 minutes, we will put the full remarks in the record, but
that way we will have more time for questions. Dr. Rice, thank
you so much for joining us today.
STATEMENT OF HONORABLE SUSAN E. RICE, ASSISTANT SECRETARY,
BUREAU OF AFRICAN AFFAIRS, U.S. DEPARTMENT OF STATE
Ms. Rice. Thank you very much, Mr. Chairman, members of the
Committee. It is always a privilege and an honor to appear
before this Subcommittee.
I would like to begin, if I might, by joining you in
expressing our deep condolences and sadness at the loss of a
tremendous international statesman today, former president
Julius Nyerere. We will all miss his leadership tremendously.
It was leadership that he never tired of giving to the
international community up until his very last months. I want
to pay particular tribute to his most recent contribution to
regional peace and security, his efforts to bring about a
lasting peace in Burundi.
The White House will be sending a high-level Presidential
delegation to his funeral, the composition of which is still to
be determined, but we intend to be well-represented on behalf
of the United States, to share their sorrow.
I will try to keep my remarks as brief as I can. If I might
just thank you for the opportunity to testify on South Africa.
It is a nation whose remarkable transformation continues to
command the world's attention and admiration. Five years ago,
South Africa stood at the threshold of a new era when its
people went to the polls to elect their first democratic
parliament. It in turn, of course, chose Nelson Mandela to lead
a government of national unity.
Now South Africa has entered a new and equally critical
phase, and its resilient people again have put their best foot
forward. The country's second democratic election on June 2nd
marked a smooth and routine transfer of power, a critical
indication of sustained progress in South Africa.
Our stake in South Africa's success is significant. For the
United States, South Africa's leadership as a pluralistic,
market-oriented democracy is critical to the achievement of our
goals in Africa, especially integrating Africa into the global
economy and combating transnational threats to our mutual
security.
A half-decade after the end of apartheid there is general
recognition, both inside and outside of South Africa, that the
government of President Nelson Mandela and Deputy President
Thabo Mbeki performed extremely well. The ANC-led government
has fostered the difficult and lengthy process of national
reconciliation, laid the groundwork for long-term democratic
tradition, established a sound economic policy framework, and
began to deliver essential social services to the previously
disadvantaged majority.
President Thabo Mbeki's government now faces the difficult
task of fulfilling his promise to accelerate the pace of the
transition. Since taking office on June 16th, President Mbeki
has taken decisive steps to address the pressing issues of
crime, economic growth, and job creation.
In public forums, he has taken a tough line against
military governments, corruption, and misrule, statements which
we, of course, applaud. At the same time, he stood by the
government's macroeconomic policies embodied in the Growth,
Employment, and Redistribution Program, or GEAR, that
emphasized fiscal discipline, removal of capital controls,
lower tariffs, and privatization of the parastatal sector.
U.S. policy seeks both to help South Africa consolidate its
already remarkable progress and to strengthen our partnership
in key areas of mutual interest. The most important of these
key areas are the following: bolstering democratic institutions
and processes, strengthening the institutional capacity of the
South African government to develop socioeconomic policies,
create jobs, and provide improved social services, working
together diplomatically to prevent and resolve conflicts,
cooperating to prevent the proliferation of weapons of mass
destruction, working to open the South African and SADC markets
to U.S. products and services, and to increase bilateral trade
and to improve the climate for U.S. investment, helping South
Africa develop an effective criminal justice system, supporting
South Africa's pursuit of sustainable development, and,
finally, supporting improvements to South Africa's health care
system to ensure core needs of the majority are met, and to
combat the spread of infectious diseases, particularly HIV/
AIDS.
To help achieve those goals, the full panoply of the U.S.
Government has been actively involved in providing support and
training. The largest component of U.S. assistance to South
Africa is, of course, USAID's efforts. Our current strategy
being implemented under a 10-year, $435 million program, seeks
to ensure a sustainable transition.
The United States and South Africa, of course, have much in
common--diverse and open societies, deep respect for democratic
ideals and human rights, and a shared vision of a peaceful and
prospering international community. Regular high-level contacts
have been critical to the process of developing a strong U.S.-
South Africa partnership.
President Mandela's visit to Washington in October 1994 led
to the establishment of the U.S.-South Africa Binational
Commission (BNC). This Commission has met six times since 1994
and now comprises nine Committees.
The BNC has been central to the process of renewing and
strengthening our cooperation in many areas. Under its
auspices, we have worked to open our markets, signed a trade
and investment framework agreement, and established a Trade and
Investment Council. We have negotiated a bilateral tax treaty
and new pacts on civil aviation, extradition, and mutual legal
assistance.
Two recently established BNC committees, one on defense and
another on justice and anti-crime cooperation, have led in
short order to rapidly expanding collaboration in these key
areas.
Finally, in the area of foreign policy, South Africa has
quickly emerged as one of Africa's leading political and
diplomatic actors. The global scope of South African foreign
policy notwithstanding, much of the government's focus is
closer to home with the Southern African Development Community
(SADC) and the Organization of African Unity (OAU). South
Africa appears determined to make both SADC and the OAU more
relevant and effective. We strongly support its efforts in this
regard.
In conclusion, Mr. Chairman, let me say that we consider
our relationship with South Africa to be one of our highest
priorities. But we all must be cognizant of the tremendous
challenges still facing the country and its people. As
President Mbeki said at his inauguration, ``South Africa is at
the dawn of the dawn, when only the tips of the horns of cattle
can be seen etched against the morning sky.''
In many ways, the task of democratic institution building
in this country is only just beginning. Crime, HIV/AIDS, and
economic disparity all threaten South Africa, just as our own
social problems and violence threaten U.S. progress in the
century to come. We are committed to supporting not only South
Africa's domestic strides, but its strong role in the region
and its positive contribution worldwide.
We look forward to strengthening and deepening our
engagement with the new South Africa and its people. We believe
their strength will ensure the success of their transition and
the emergence of South Africa as one of the world's greatest
powers and most respected leaders.
Thank you very much.
[The prepared statement of Ms. Rice appears in the
appendix.]
Mr. Royce. Thank you, Dr. Rice. I appreciate your
summarizing your testimony as well.
Before finishing here, on behalf of the Subcommittee, let
me just say a few words. I would like to wish you and Secretary
Albright a productive visit to Africa next week. In particular,
I believe that the Secretary's visit to Sierra Leone could be
most helpful in helping that war-shattered nation along the
road to peace.
As you know, the Subcommittee has taken a strong interest
in Sierra Leone, and we look forward to hearing about your
visit. Again, we thank you for coming here today.
There are a few questions that I would like to ask you, and
then we will turn to other members of the Committee. But the
first has to do with the signing this week of the South Africa-
European Union trade development and cooperation agreement.
This agreement will dismantle or reduce tariffs on about 95
percent of South African exports into Europe, and at the same
time South Africa will scrap its duties on about 86 percent of
the EU imports over 12 years.
I believe for South Africa that is a positive development,
but concerns have been raised about this agreement
disadvantaging American firms in South Africa. Does the
administration share these concerns? And, if so, does it have a
proposal to address this?
Ms. Rice. Thank you, Mr. Chairman. We support regional and
bilateral trade agreements that are liberalizing as a matter of
principle. But we will be watching implementation of the EU-
South Africa free trade agreement very carefully to ensure that
it is WTO consistent and that U.S. exporters and investors are
not unfairly disadvantaged. Our initial analysis of this
agreement and its effects on U.S. exporters is, at present,
underway.
As the President said during his trip to South Africa, we
are very much open to the idea of exploring bilateral trade
liberalization efforts with South Africa, including discussing
a U.S.-South Africa free trade agreement at an appropriate
juncture.
Mr. Royce. Let me ask you also about press reports that
Danelle, a South African government-owned defense contractor,
presently has a delegation in town, is preparing to sell
weapons to Libya. How would such South African weapon sales to
Libya, or other countries considered hostile to U.S. interests,
impact our relationship with South Africa?
Ms. Rice. Mr. Chairman, we have seen the same reports that
you have. This is an issue of concern to the United States. I
do want to say that we have no information at present to
confirm any sale by South Africa of such equipment to states
that we consider pariah states. We continue to watch this
situation very carefully. It is also obviously a subject that
features regularly at the highest levels of our bilateral
discourse with South Africa.
I would not wish to speculate about the effect of such a
sale. We have a number of laws on the books that govern our
relationship with states that sell such equipment to terrorist
list states. Those laws are well-known to the government of
South Africa, and we continue to look forward to constructive
discussions with the government of South Africa aimed at
fostering our shared interest in preventing proliferation of
weapons to countries that could well misuse them.
Mr. Royce. Thank you. In your testimony, you mentioned that
President Mbeki is serving as Chair of the Non-Aligned
Movement, or Non-Aligned States. What is the significance of
the Non-Aligned Movement to the United States?
Ms. Rice. I suppose I could go on at some length about
that. I will try to be brief. The Non-Aligned Movement (NAM),
historically has played a prominent role in international
affairs. It has long been the voice of the developing world and
countries who have felt that their political and economic
interests have not been fully taken into account by some in the
developed world.
It continues to be an important venue for policymaking and
dialogue with the countries of the developing world. South
Africa has taken its role as Chairman of the NAM very
seriously, and we have been grateful for the opportunities we
have had to work with South Africa in its role as Chairman of
the NAM to pursue issues of mutual concern.
Mr. Royce. OK. Last, let me bring up a question which I
have discussed with you before, which is the view that South
Africa and many other gold-producing countries have with regard
to IMF's gold sales to fund the highly indebted poor country
initiative which the administration supports. As you know, the
opposition comes from the fact that it would drive down gold
prices and harm the economies that, in theory, it is designed
to help.
This Subcommittee held a hearing on debt relief in the
spring, and Treasury Department officials were dismissive of
the concerns raised by the Committee members here at that time.
How is the issue now being viewed by the administration, if I
could ask?
Ms. Rice. As you well know, providing debt relief to the
poorest countries remains an important priority for the
administration. The IMF has been examining a whole range of
options that would allow it to participate fully in the HIPC
initiative. It is partly due to considerations of gold-
producing countries, the United States and South Africa both
being among them, that probably will lead compromise on the
planned sale of 10 million ounces of IMF gold on the open
market.
So, at present, this is being reevaluated has been shelved,
and we look very much to the Treasury Department, of course, to
provide specifics on future policy with respect to gold sales.
But I don't see that as being an immediate concern with respect
to funding of the HIPC initiative.
Mr. Royce. Thank you. Thank you, Dr. Rice.
I will go to Mr. Payne.
Mr. Payne. Thank you very much, Dr. Rice. I, too,
appreciate the fine work that you have been doing and wish you
good luck on your trip to Africa with the Secretary. I also
have a question regarding Libya, but not as it relates to the
sale of weapons.
Although Libya certainly has behaved as a pariah state for
decades, and its leader, Mr. Gadhafi, has not been cooperative
in world policies it appears to me that during the last 3 or 4
years there seems to have been a change in Libya's interest in
moving back into the world society. South Africa has a
relationship with Libya, and if Libya did show that it
sincerely was interested in changing its ways, since in the
past it engagement with many African countries have been not
always been constructive, with Charles Taylor of Libya starting
out in Libya etcetera,--but what do you think would be the
prospects of Mr. Mandela having discussions with Mr. Gadhafi?
Does the U.S. at this time feel that its policy on Libya might
be changing?
Ms. Rice. Sir, I appreciate that the Subcommittee has
jurisdiction over Libya. I am not the American official
responsible for our policy toward Libya, and I would be remiss
if I were to answer that question directly. I am happy to take
it back, if you would be willing to provide it in written form,
and ask the Near Eastern Bureau to provide an answer to it.
Mr. Payne. That is great. There is the question of
pharmaceuticals, intellectual property, and the question of a
conflict between South Africa and the alleged demands from the
U.S. regarding that whole situation.
Could you try to clarify what the situation is now between
the U.S. pharmaceuticals and South Africa, and the whole
question of how AIDS victims can be assisted with the fact that
the products that can combat AIDS are very expensive. There are
certainly two sides to this issue, but what officially is the
situation now between South Africa and the pharmaceuticals?
Ms. Rice. Sir, as you perhaps have seen, last month the
U.S. Government and the South African government reached a
satisfactory resolution to the dispute over the South African
Medicines Act and pharmaceutical patents protection. This was a
welcome development. Many in the administration worked hard
with counterparts on the South African side to achieve.
The understanding that we have come to commits South Africa
to honor fully its WTO commitments under the treaty respecting
international property, while also affords South Africa the
necessary flexibility to respond to its national HIV/AIDS
health crisis. So this an amicable, and we believe very
balanced, resolution to the issue and sets aside this
contentious issue. We hope it will never again play a prominent
role on our bilateral trade agenda.
There is a continuing dialogue between the U.S. and South
Africa to ensure that the Medicines Act is implemented in a
manner that is consistent with South Africa's WTO obligations
and in a manner that ensures the safety and the efficacy of
patented drugs. So I think we have good news in that regard. A
lot of hard work has gone into it, and I believe the
governments of both the United States and South Africa are
satisfied with the result.
Mr. Payne. Thank you. I know President Mbeki was fairly
involved in the agreement in the Congo. To your knowledge, is
South Africa continuing to take the leadership in the cease-
fire there, and, to your knowledge, is the cease-fire still
holding? I know this is a little outside South Africa, but
indirectly it does involve South Africa.
Ms. Rice. The South African government has played a highly
constructive role at all stages in the effort to broker a
peaceful resolution to the conflict in Congo. It did so under
President Candela's leadership, and it has been very energetic
in recent months under his leadership.
President Mbeki and his new foreign minister, Mrs. Zuma,
have engaged almost full-time, it might seem to an outside
observer, in shuttle diplomacy and other efforts to bring
particularly the rebel factions to an agreement on the issues
that divided them, and to enable the rebel leadership to
finally sign the Lusaka agreement. Their efforts continue.
South Africa has made an important pledge to financially
support the Joint Military Committee, which is an important
element of the Lusaka agreement. It has expressed its
willingness to participate in a U.N. peacekeeping effort there.
We very much admire and are grateful for the contributions that
South Africa has made and has promised to continue to make.
Regarding the situation in the Congo, there, of course,
have been some cease-fire violations and some incidents,
particularly over the last 10 days or so, but by and large, to
a large extent, since the agreement was signed back in July,
there have not been major violations of the agreement;
certainly, none that have been sufficient for either side or
any party to declare its unwillingness to adhere to the terms
of the agreement.
Just earlier this week in Kampala was a very important
meeting of the Joint Military Committee, where the parties to
the conflict came together and made some important decisions
that should lead to swifter implementation of key elements of
the Lusaka agreement.
Mr. Payne. Thank you very much. I am really glad to hear
that.
The third bell has rung, so I have to leave. Someone should
be here in a moment, though, and I don't think we would have to
have a recess. I ought to just increase aid to Africa by
about----
Ms. Rice. Go for it.
Mr. Payne [continuing]. A couple hundred million dollars.
When the Chairman comes back----
[Recess.]
Mr. Royce. Secretary Rice, again, we want to thank you very
much for your testimony here today, we wish you well, you and
Secretary of State Albright well, on your trip to Sierra Leone.
That will conclude our first panel.
Mr. Payne. Mr. Chairman, would you yield just for----
Mr. Royce. I certainly will yield to the gentleman from New
Jersey.
Mr. Payne. I just had a quick question regarding the
overwhelming issue about crime. Has the South African
government asked the U.S. Government for any assistance in
fighting crime? Or do they have the capacity to do it,
investigating and that kind of work? I know President Mbeki in
his inaugural address spent a great deal of time on the issue
of crime. Will that issue come up? Or have they made any
request to us for assistance?
Ms. Rice. The issue of cooperation and countering crime,
both domestic and internationally, is an increasingly important
item on our bilateral agenda, so much so that the Vice
President and then-Deputy President Mbeki agreed to create a
justice and anti-crime cooperation Committee of the Binational
Commission.
That Committee was inaugurated last February when the
Attorney General herself went down to South Africa as part of
the Binational Commission. She went back again to South Africa
in June to lead the U.S. delegation to President Mbeki's
inaugural, and she met just last month with her South African
ministerial counterpart here in Washington to conclude two
important agreements on cooperation and law enforcement
matters.
There have been specific requests to the United States to
help South Africa build capacity and train its police and
enhance its law enforcement capability. A variety of U.S.
Government agencies are on the ground actively pursuing that
cooperation and providing assistance and training.
We have much to gain together by cooperating in this
regard, and we look very much forward to it, and we share
Chairman Gilman's interest in the rapid establishment of the
international law enforcement academy in Southern Africa, which
will enhance our ability to cooperate on crime matters not only
with the government of South Africa but with countries in the
entire subregion.
Mr. Royce. Thank you. We are going to go to Mr. Campbell of
California for his questions.
Mr. Campbell. Obviously, I apologize if they have been
asked already, but the votes happen that way. I wanted to ask
about ACRI and where we are on South Africa's participation in
the Africa Crisis Response Initiative. Maybe you could give me
an update. I was particularly interested in knowing if they
might be willing to play a role, if Nigeria is playing a little
bit less, maybe in the West Africa region. But if not, where
are they on ACRI?
Ms. Rice. South Africa has made it plain that it intends to
play an increasingly important role in international
peacekeeping activity. This is a relatively new policy approach
coming out of the white paper that they published in December
1998, and it has already been manifested in Lesotho, and we
look forward to a South African role in the Congo.
But in terms of the African Crisis Response Initiative, the
South Africans have maintained the position that they prefer
that initiatives for training and capacity building in
peacekeeping in Africa be conducted on a multilateral basis
under the auspices of the U.N. or the OAU or SADC.
While we continue to talk at various levels and cooperate
with the South Africans on peacekeeping activities--for
example, our support for the Blue Crane exercise last year, and
our bilateral military cooperation in other spheres--we are not
at the stage where we anticipate a swift decision in South
Africa to participate in the African Crisis Response
Initiative.
That is, of course, their prerogative. We continue to
discuss ACRI participation with a number of other governments
throughout Africa, including in Southern Africa. Malawi has
joined ACRI, and others in Southern Africa may soon take
similar decisions----
Mr. Campbell. Who else has----
Ms. Rice [continuing]. We look forward to that.
Mr. Campbell. Pardon me for interrupting. Who else has
signed on in Southern Africa? Is it just Malawi?
Ms. Rice. Malawi is the only one that is actively in the
program, although other countries in Southern Africa have
expressed an interest. Our concern is given that our capacity
under ACRI is not infinite, that we work with partners whose
ability to make a meaningful contribution at the outset is
already well-established.
Mr. Campbell. I refer to notes that our Committee staff
prepared in advance, and so it is not of my own knowledge, that
President Mandela assured President Clinton during President
Clinton's visit to South Africa that he ``fully endorsed the
African Crisis Response Initiative.'' And so it is--I take it
if that is an accurate description that there has been a
cooling. Is that--speak to this. What do you think it----
Ms. Rice. while the two Presidents talked about ACRI, I
don't think that is an accurate description or conclusion that,
as a result of that conversation, President Mendella committed
South Africa to ACRI participation.
Mr. Campbell. All right. That is fine.
Apparently, the majority staff of this Subcommittee and
President Mandela, I guess.
Second, what happened, or is there an outcome regarding the
patent issue on the parallel imports of the anti-HIV drugs?
Where do we stand on that?
Ms. Rice. Yes. I did respond to that a little bit earlier,
and I----
Mr. Campbell. Oh, I am sorry.
Ms. Rice [continuing]. Said quite simply that we were very
pleased that last month the governments of South Africa and the
United States came to an amicable resolution of this issue that
we believe--and I believe the South African government
believes--manages our concerns that any policies and laws in
South Africa be WTO consistent, as well as protect South
Africa's concerns, that they have the flexibility necessary to
provide the majority population with the types of drugs,
including those for HIV/AIDS, that are needed.
Mr. Campbell. Let me be specific.
Ms. Rice. At reasonable cost.
Mr. Campbell. Let me be specific. The issue is parallel
importing, where the owner of the patent wants to restrict the
distribution on a geographical country basis. We call that a
vertical restriction in American anti-trust law. It is
permitted if an international owner of a patent chooses to
distribute in that manner.
What South Africa was attempting to do was to say, ``Well,
look''--and Zimbabwe as well--``you are sending the patented
items into other countries at a lower price. We would like to
be able to purchase them in that other price--at that lower
price in that other country.'' That was where I left the issue,
that that was their request.
At least as I understand it, it is the patent owner's right
to say, ``No, we choose to distribute in this manner.''
Nevertheless, I voted with Mr. Meeks on his resolution to say
we shouldn't--that we should put that secondary to concern
about AIDS and the spread of HIV, and that even if that meant
that this rule of distribution would be impinged upon that
there was a greater good.
But I could not deny as a matter of patent and distribution
law as I know it that that was the situation. Do you know
enough more about that to inform me?
Ms. Rice. You are well over my head on the legal issues,
but----
Mr. Campbell. Nobody asks me for my anti-trust advice
anymore.
Ms. Rice. And you are a lawyer and I am not. But----
Mr. Campbell. I teach at a small college in----
Ms. Rice. Small west coast university----
Mr. Campbell. West coast university.
Ms. Rice [continuing]. To which we both have a great
affection.
Mr. Campbell. Yes. Are your alumni dues in arrears?
Ms. Rice. I really ought to defer to my colleagues from
USTR----
Mr. Campbell. No problem.
Ms. Rice [continuing]. On that one.
Mr. Campbell. Mr. Chairman, I have just one quick question,
if I might--the Zulu ANC and the Incatha party's ANC strife in
Natal. Any news on that? In the regional elections, there was
some concern that the ANC had taken over so many of the local
positions that Incatha might have felt dispossessed or felt out
of the opportunity to participate? Is there anything new on
that? And if the answer is no, that is fine with me, and I am
done.
Ms. Rice. I think that the large picture is that tensions
in KwaZulu-Natal are way down, as they are across the country.
The incidence of political violence is substantially
diminished. The IFP continues to have representation in the
government, including important cabinet ministries, and so I
think the short answer is that that situation is a relatively
stable one.
Mr. Campbell. And UDF ANC as well? The United Democratic
Front? Or is that a little bit more difficult?
Ms. Rice. A little bit more complicated. There were a
couple incidents, as you know, during the election campaign
that were a source of concern. But I think again, the big
picture has been one of remarkable political harmony and
opposition and political parties competing peacefully, and
there being open political debate in parliament, and there not
being an inordinate number of incidents of political violence,
as we have seen in years past.
Mr. Campbell. Thank you.
Thank you, Mr. Chairman.
Mr. Royce. Thank you, Mr. Campbell. If could just respond,
Mr. Campbell. The comment about the concurrence by Mr. Mandela
in his conversation with President Clinton on the ACRI
initiative, that was a press conference in Capetown, and we
will willingly provide you that information, as reported in the
press, but in point of fact----
Ms. Rice. You were there, sir. Do you remember?
Mr. Royce. I was there. I was there.
In point of fact, there is documentation in the press about
Mr. Mandela responding, about his conversation and responding
in support of ACRI. But we will get you that information.
Mr. Campbell. Mr. Chairman, I am informed and grateful for
that. I wonder if it is not impolite to ask, has it been
cooling, then, since then? Is that----
Mr. Royce. Is----
Mr. Campbell. Has the South African interest in ACRI been
cooling, in your judgment?
Mr. Royce. I understand how you are--I understand your tack
here, but I don't think we can infer that. But let me just get
you the documentation.
Mr. Campbell. Thank you.
Mr. Royce. Just for your own information.
Ms. Rice. I would just say, sir, my sense is that it has
been pretty steady state. There have been--there has been
interest as well as concern, and I think for the moment we
don't anticipate any radical change in the South African
posture. They have not come back to us and said, for example,
``We would like now to actively participate in the African
Crisis Response Initiative.''
They have indicated that it would be their strong
preference that we work through SADC as a regional organization
as we pursue this approach in the Southern African region. In
the meantime, we have welcomed cooperation, as has the
government of South Africa, on peacekeeping and other regards.
As I mentioned earlier, this Blue Crane operation
peacekeeping exercise that the South Africans hosted last year
with the states of the SADC region, we had--we participated by
providing airlift to countries in the region to be part of that
exercise. We had observers there, and we do cooperate on
peacekeeping issues in meaningful ways.
Mr. Royce. And let me just add, if I could, I suspect your
question to Secretary Rice went to the issue of South African
involvement in West Africa. As I understood it or as I heard
it. I think what you are probably going to find is a great deal
of interest on the part of South Africa with respect to Congo
or peacekeeping regionally in Southern Africa.
But in terms of West Africa, I am not sure ACRI
participation was ever broached, and so maybe that is the----
Mr. Campbell. I appreciate it, and I will tell you what I
had in mind was simply that if Nigeria's patience and
willingness to contribute is wearing out, then there is a
possibility we would look--that Africa would look elsewhere.
But I agree with you, that has never been the primary focus of
South Africa's involvement in the multilateral force.
Mr. Royce. Right.
Let us go to Ms. Lee of California.
Ms. Lee. Thank you, Mr. Chairman.
Mr. Royce. Thank you.
Ms. Lee. Let me ask Madam Secretary, hopefully, a nonlawyer
question with regard to the pharmaceutical issue. I am
delighted that an agreement has been reached, and that now
affordable medicines will be made more available in South
Africa. One of the areas of concern that I am not sure has been
resolved or not has to do with the pharmaceutical
manufacturers' appeal, and has this appeal been withdrawn? Or,
if not, do you know what is going on and why that appeal is
still there, if, in fact, there has been a resolve?
Ms. Rice. The short answer is I am not exactly sure of the
status of the appeal at the moment. I am being told that the
court case has been temporarily suspended, but I think I can
get back to you with the precise details where----
[The prepared Letter appears in the appendix.]
Ms. Lee. Could you please? Because if it has been
temporarily suspended, that is fine. But I think it would help
if it is withdrawn. If it is suspended, I would like to at
least know on what basis it was suspended.
Mr. Campbell. Would the gentlelady yield just for a second?
Maybe we can ask which court. You are talking about a
proceeding within TWO or----
Ms. Lee. There you go back to a lawyer requesting that.
Ms. Rice. No, South Africa. In South Africa. There was a--
--
Mr. Campbell. So the court----
Ms. Rice. Yes, the companies----
Mr. Campbell. Sued in South Africa.
Ms. Rice [continuing]. Sued in----
Mr. Campbell. Thank you. Thanks for yielding.
Ms. Rice [continuing]. Sued in South African court.
Mr. Campbell. Since you said it is pending in court, I need
instantaneously to know which court.
Ms. Lee. That is our lawyer. OK.
Mr. Payne. If the lawyer would yield----
Ms. Lee [continuing]. To the social worker. Thank you very
much.
Mr. Campbell. My clock is running.
Mr. Royce. Yes. Mr. Payne?
Mr. Payne. I think that----
Ms. Rice. It is not the pharmaceuticals that----
Mr. Payne. No. I think that the actual South African courts
had a case in their courts to determine whether the law that
was passed in South Africa would stand up----
Ms. Rice. That is right.
Mr. Payne [continuing]. In their Supreme Court.
Ms. Rice. That is right.
Mr. Payne. So the law was never really the law that
everybody reacted to because it is still under the
consideration of the courts of South Africa whether this
legislation that was passed was constitutional.
Ms. Rice. That is right. That is our understanding.
Ms. Lee. OK. So you are going to get back to us with regard
to the whole issue----
Ms. Rice. The actual status is----
Ms. Lee [continuing]. The status.
Ms. Rice. But as I said, it has been suspended. We will let
you know why and any of the further details we can provide.
Ms. Lee. OK. Thank you very much.
Mr. Royce. We thank Mr. Payne for clarifying that point.
That is accurate, indeed.
Mr. Payne. I am a lawyer, too.
Mr. Royce. Ms. Lee?
Ms. Lee. OK. Let me just ask you, with regard to the AIDS
threat in South Africa as really a national emergency, how do
you see it impacting the economic development of South Africa?
Because during our discussions and putting together our AIDS
marshall plan, we found that several companies now are hiring
two individuals for one job, given the fact that the crisis is
so devastating that one of those individuals may or may not
live. I am wondering if we have had a chance to really make
that assessment.
Ms. Rice. Yes, and so has the government of South Africa. I
think by any measure, there is great cause for concern about
the potential impact of the HIV/AIDS pandemic in South Africa.
South African statistics, as we understand them, indicate that
an estimated 8\1/2\ percent of the population at present is HIV
positive. In the 20- to 24-year old age group, it is as high as
25 percent, and there are estimates that within a little more
than 10 years perhaps as high as 25 percent of the entire
population could be HIV positive.
The economic implications of this are enormous in South
Africa, as well as in other parts of the world and other parts
of Africa. The government has taken a series of important steps
to draw attention to the problems that HIV/AIDS poses, to
increase education, to make available, as you well know, as we
were just discussing, more affordable medicines and treatments.
President Mbeki himself has I think done a remarkable job
of shining the spotlight on this problem. I recall when we were
in South Africa in February, then Deputy President Mbeki and
Vice President Gore at their press conference wore badges to
draw attention to the HIV/AIDS problem.
So public education, which is the most important part of
the challenge in many respects in the developing world, is
something that the government has taken on with vigor. Much
more will have to be done if this is to be turned around.
Ms. Lee. Mr. Chairman, may I just ask one more question?
Mr. Royce. Absolutely.
Ms. Lee. Very quickly, with regard to U.S. companies and
investment on behalf of United States corporations. How are we
assisting U.S. companies in terms of their focus and their
ability to support and to help in this pandemic that is
transpiring now.
Ms. Rice. As you know, back in the summer Vice President
Gore unveiled a new anti-HIV/AIDS initiative called the Life
Initiative, which had two principal components. One is a
request that is now pending before Congress for $100 million in
fiscal year 2000 to substantially increase our efforts to do
prevention education and research on HIV/AIDS worldwide.
The other part of it is a dialogue that is now well
underway with representatives of the U.S. private sector and a
broad cross-section of the senior-most officials in the
administration to try to coordinate strategies overseas for
dealing with HIV/AIDS in ways that our companies can make
investments that will benefit the people at risk as well as
their own long-term economic prospects.
Ms. Lee. Good. Thank you very much.
Mr. Royce. Thank you.
Thank you, Secretary Rice. We will now go to our next
panel.
Ms. Rice. Sure. Thank you very much.
Mr. Royce. J. Daniel O'Flaherty has been the Executive
Director of the U.S.-South Africa Business Council since 1993.
The Business Council represents U.S. companies doing business
in South Africa. It serves as the private sector secretariat of
the U.S.-South Africa Binational Commission.
Mr. O'Flaherty has extensive background in trade policy
issues and worked as a professional staff member in both the
House and in the Senate. He has been working on South Africa
issues since the late 1970's when he was a Senior Associate of
the Carnegie Endowment.
Judson Ray is Unit Chief of the FBI's International
Training and Assistance Unit. He has more than three decades of
experience in law enforcement. He has served with the FBI since
1980. Special Agent Ray's extensive experience includes
consultative services to the Department of State as the FBI's
chief representative for international training and work in
counterintelligence and in white collar crime.
He was the first law enforcement officer in the Nation to
be admitted to the state, Federal, and military courts as an
expert in the profiling of serial killers. Special Agent Ray
earned a bachelor's degree at Columbus College and master's
degrees from Troy State University and Georgia State
University.
We thank you both for making the trip up here to testify
today.
Mr. O'Flaherty, if you would like to begin at this time.
STATEMENT OF J. DANIEL O'FLAHERTY, EXECUTIVE DIRECTOR, U.S.-
SOUTH AFRICA BUSINESS COUNCIL
Mr. O'Flaherty. Thank you very much, Mr. Chairman, members
of the Committee. I appreciate the opportunity to appear today.
Mr. Royce. And we appreciate your summary testimony because
your full testimony will be in the record, so we are going to
hold you to 5 minutes. Thank you, sir.
Mr. O'Flaherty. Thank you.
I would like to congratulate the Subcommittee on holding
this hearing on our relationship with South Africa, which is
not only Africa's largest market but is also a country whose
peaceful transition to free market democracy is widely admired
in this country.
Passage by the House of the Africa Growth and Opportunity
Act earlier this year, and the prospect of an early vote in the
Senate, indicates that the Congress is serious about
strengthening our commercial ties to all of Africa.
Perhaps I can best contribute to the Subcommittee's
understanding and review of relations with South Africa by
describing the U.S. private sector's current role in South
Africa, how that country is perceived as an investment
destination by U.S. firms, and what the U.S. and South African
governments can do to increase the positive contribution that
U.S. business can make to South Africa's development.
The perception of the private sector--by the private sector
of South Africa at this point here can best be summarized in
three statements. No. 1, South Africa has chosen and maintained
sound fundamental economic policies, but has so far failed in
its efforts to attract the magnitude of foreign investment its
economy requires.
Second, U.S. companies are making a significant
contribution to the social, as well as the economic,
development of South Africa.
Third, South Africa is a challenging business environment
for American companies, especially in sectors that may be
affected by South Africa's free trade agreement with the
European Union, and those dependent on government procurement
contracts for profitability.
Now, economic growth in the past year in South Africa has
been just above zero, although the likelihood is that for this
year it will be between 1\1/2\ and 2 percent. The South African
government's economic management has been very prudent. It has
conformed to international standards that are desired by
world--by the international financial institutions and by
international businesses.
But the fact is that growth in South Africa is too low to
absorb the enormous rate of unemployment, which is between 35
and 40 percent, depending on how you count the informal sector.
In addition, 100,000 jobs a year have been lost since 1994 due
to globalization and integration of South Africa into the world
economy.
So given the natural increase of population, combined with
immigration from neighboring countries, the country is falling
behind.
Now, my second point relates to the contribution that U.S.
companies are making both in terms of investment and
noneconomic activity. Our company's presence has returned to
pre-sanctions levels of the mid-1980's, but this isn't the mid-
1980's and the world has changed. Companies no longer need to
invest in countries where they want to market.
They export to them more easily, and as a result there has
been some disappointment in the amount of direct investment--
that is, investment in plant facilities that directly employs
people--by South Africans, in particular, who wanted to see the
status quo ante come back into place.
We do have an investment stock in the country right now of
about $3\1/2\ billion. Employment of South African workers has
risen back up to the pre-sanctions level of around 80,000. In
1998, the United States was the largest foreign direct investor
in South Africa, as an individual country but not as large as
that of the combined European Union nations.
The business environment--and this is my third and final
point--in South Africa is a challenging one, which is to say
that it has negative aspects to it. The South African
government is in many respects best understood as a labor
government. It has not, consequently, adopted the investment
incentives common in many other parts of the world trying to
attract investment. It must reconcile its labor political base
with the prudent economic policies expected by the
international investing community.
U.S. companies operating in South Africa have to balance
global competitiveness with this local labor and black
empowerment considerations that have political resonance. That
is the central tension which our companies face in South
Africa, and from which a lot of other issues derive that you
will find in my written testimony.
Mr. Chairman, thank you.
[The prepared statement of Mr. O'Flaherty appears in the
appendix.]
Mr. Royce. Thank you, Mr. O'Flaherty.
Now we will go to Special Agent Judson Ray.
Mr. Ray?
STATEMENT OF JUDSON RAY, SPECIAL AGENT, UNIT CHIEF,
INTERNATIONAL TRAINING AND ASSISTANCE, FEDERAL BUREAU OF
INVESTIGATION
Mr. Ray. Mr. Chairman, members of the Committee, fellow
panel members, I appreciate the opportunity, too, to appear
before the Committee today to discuss U.S.-South African
relations, present and future.
Secretary Rice has already summarized the Binational
Commission and the role that that Commission plays in both
domestic and international matters involving both South Africa
and the United States. The Committee which has relevance to my
comments, is, of course, the Subcommittee on Justice and Anti-
Crime Cooperation.
As you know, Mr. Chairman, that Committee--that
Subcommittee is chaired by the Attorney General, Attorney
General Janet Reno, and she recently traveled to Capetown,
South Africa, in February of this year to chair this first
meeting. The Committee established basic terms of reference for
future meetings and came to the agreement on a wide range of
law enforcement issues, including training, technical
assistance, and cooperation.
Following that meeting, Attorney General Reno came back to
this country and has put together experts from the Department
of Justice, the Department of Treasury, and, of course, the
Department of State, and has developed a comprehensive strategy
to consult and provide assistance to South Africa and other
African nations regarding training and other justice-related
issues.
Now, the reason why this is important to the Justice
Department, and, of course, to the FBI is somewhat clear to us,
but I would like to explain it here. Because of the global
mandate of many of the FBI and other Federal law enforcement
investigative initiatives, we must make training investments in
police systems of countries where the FBI's investigative
mission is affected.
In virtually all major FBI investigations for the past 20
years, a significant international aspect develops. Now, to
balance its interest in addressing the international aspects of
investigations, with the requirement to respect host country
sovereignty, the FBI and other U.S. law enforcement agencies
must rely on the capabilities of the host country's law
enforcement community.
It is important to note that due to differences in judicial
systems, or due to absence of appropriate treaties and
agreements, the FBI is unable at times to undertake
investigations in foreign countries and to bring them to
successful conclusion.
I need not point out that the FBI is largely dependent upon
the local criminal justice system and the level of police
training and judicial training that its members have. The
recent bombings in East Africa, the World Trade bombing,
Russian money laundering investigations, the old BCCI
investigations, and other high-profile cases are but a few
examples of the increased threat to the United States caused by
international crime.
Now, in order to ensure that such cases are brought to
successful conclusion, the establishment and maintenance of
effective liaisons through training and other cop-to-cop
initiatives must be developed and enhanced.
Now, with respect to the emerging democracies in Eastern
Europe, the United States Government's response to that, from a
law enforcement perspective, was the establishment of an
international law enforcement academy. That academy, as many of
the members of the Committee know, is effectively operated in
Budapest, Hungary.
To date, that academy has trained well over 1,000 law
enforcement mid-level officials from approximately 23 different
countries in Eastern and Central Europe. Another 4,000 people
have been trained in short courses such as drug interdiction,
counterfeiting, and a host of other crime-specific issues that
affect some of the strategic interest in operations of many of
the Federal law enforcement agencies in this country.
I can point to many occasions where we have seen examples
of cooperation between the bordering countries in major cases
that could only have been brought to successful conclusions
because of the relationships established there in that 8-week
course in Budapest. There is a sense on the part of many people
in Justice that we think that this simple approach could bear
fruits in Southern Africa.
Two years ago, I, at the request of the State Department,
was invited to conduct an assessment of the state of training
in South Africa. I met with a number of police, judicial,
political, community leaders, and university people in my
analyses of the state of police training in South Africa.
The one thing that I came away with is this, and I think
that we can safely say that in any democracy or emerging
democracy, there is tremendous weight, tremendous
responsibility placed on the shoulders of police officers from
day to day. As Mr. Gilman pointed out, many cops have been
killed in South Africa as we speak probably.
It seems to me that the police in these societies are the
only people who are duly constituted often times by the
constitution to, based on an intuitive grasp, take the live of
a citizen. When I recognized the state of training in South
Africa, it had a chilling effect on me as a police practitioner
over the years having policed many communities in this country.
That is an awesome responsibility?
But, more importantly, it struck me that most citizens, as
I travel around the world, are tired of investing in bankrupt
police systems. They would just rather put their money
somewhere else, so that it is imperative that we find a way to
begin to assist this part of the world in bringing about the
kind of changes that needs to be brought about.
Simply stated, South African police service must find a way
to shift from a confessional-based investigative approach to a
forensic investigative approach to ferreting out crime in that
country.
I was recently on a trip led by the Department of State,
and I was reading the paper. Commissioner George Fivaz, who I
met the last time that I was there, stated, ``A quarter of my
cops can't read. Functional illiteracy is ripe within the
police department, making it difficult for about 30,000
officers to handle even the most basic task.''
Commissioner Fivaz went on to state that, ``Considerable
progress has been made in the transformation of the SAPS.
Across the force as a whole, 55 percent are now black, and the
rest of the Department is white.'' Those figures are not that
representative as you move up the ladder in terms of mid-
management and upper management.
We think that under the Binational Committee and the
strategy that the Attorney General has mandated we see a number
of programs now being implemented. Secretary Rice spoke to
those issues. I think critical to that is one of the first
initiatives was to assist the South African police service in
developing a civilian-based complaint review. A lot of time and
attention was spent on this. In fact, we assigned a person for
a year, working with the Justice Ministry, in order to make
that come about.
But looking at the crime picture in this country, there are
a number of things going on there. You see the rise in what
would be commonly referred to as vigilante groups. When
institutions within the government are weak or does not have
the capacity to respond to crime, often times the vacuum is
filled by organized crime elements, and certainly we have seen
that.
In the interest of time, I will stop at this moment to
entertain questions from the Subcommittee.
[The prepared statement of Mr. Ray appears in the
appendix.]
Mr. Royce. All right. Thank you, Mr. Ray. Let me just say
that, is the establishment of a program, of an international
law enforcement academy, is it feasible? Then, how do the South
Africans respond to the concept? And is it in the
administration's plans to do that? Let us just have you recap
on those three quick questions quickly.
Mr. Ray. I think in the first instance we recognize, based
on at least my speaking with a number of people in the police
service, that there are already systems in place to move these
kinds of issues forward. The Southern African Police
Commissioners Organization is very, very interested, but want
to be empowered in any decisions as it relates to the
establishment of an ILEA in Southern Africa.
Because of the alliance that all of these police
commissioners have, we think it prudent to certainly consult,
negotiate, empower, and to ensure that these things are done
before we become prescriptive in anything that the USG might do
in this area.
Mr. Royce. So at this point in time, the establishment of
an ILEA in South Africa is not in the administration's plan.
You have traveled there twice on this mission in order to
assess the viability of all of this. It is feasible. You are
still in negotiation. I am just trying to get a determination
of exactly where we are, or where the administration is, in
terms of pushing the concept.
Mr. Ray. Mr. Chairman, would be something that Ms. Rice
would----
Mr. Royce. I see.
Mr. Ray [continuing]. Could answer.
Mr. Royce. Right.
Mr. Ray. That is a foreign policy issue dealing with
another government----
Mr. Royce. Right.
Mr. Ray [continuing]. Our mission was to look at a number
of countries in South Africa to determine the feasibility. That
report is being drafted now by the head of the delegation,
which was out of State, and should be made available to Ms.
Reno and Mr. Johnson and to Ryan Beers at State Department.
Mr. Royce. Under the definition of ``feasible,'' the bottom
line is it is feasible.
Mr. Ray. It is feasible to establish an international law
enforcement academy in Southern Africa.
Mr. Royce. All right. OK. Let me ask you a question about
the bombing of the U.S. Embassy there because I--since we have
you here, and given your expertise, there was a suspect Kalfin
Khamus Mohammed in that bombing, recently apprehended in
Capetown. He was extradited to the United States.
In the summer of 1998, suspected Muslim extremists bombed a
Planet Hollywood Restaurant there in Capetown, and 60 bombs,
six directed against police stations, were set off in the first
half of 1999 in South Africa.
In your written testimony, you mentioned that Islamic
extremism is a growing threat in South Africa. Do the Muslim
extremists in South Africa have links to Osama Bin Ladn, to
your knowledge? Or to other international terrorist groups? How
great a threat are their activities to the U.S., in your
opinion?
Mr. Ray. Mr. Chairman, I think it is largely known that Mr.
Bin Ladn has a worldwide organization which sells in many parts
of the world. In view of the fact that this is a very sensitive
ongoing investigation, I don't think it would be----
Mr. Royce. I understand.
Mr. Ray [continuing]. Appropriate to comment openly.
Mr. Royce. Right. I understand. I concur on that.
OK. Let me turn to Mr. O'Flaherty and ask him, in your
testimony you mentioned that South Africa has not adopted the
investment incentives common in many parts of the world. What
investment incentives might American businesses find attractive
if they were offered by the South African government? What
particularly are you referring to there?
Mr. O'Flaherty. Many countries, particularly in South Asia
or in East Asia, chose to offer tax breaks, tax holidays,
subsidies of one sort or another, to companies to come in and
invest, produce in those countries. South Africa made an
explicit decision in 1994 that it would--those kinds of
incentives often attract the wrong sorts of investors.
Investors leave once the incentive runs out.
They don't contribute to the account. They would prefer to
do it the old-fashioned way, by getting their policies right
and attracting investors that would be there for the long term
and make money and generate incomes and jobs. I happen to
believe that is a very reasonable decision, but the fact is
that American companies looking for extra reasons, other than
the fundamentals to invest in South Africa, don't find them.
Mr. Royce. I think I concur with you in terms of the long-
term interests of South Africa probably. Probably stand with
good, consistent policies without creating subsidies. But on
the policy front, what policies discourage investment there, if
I could ask you?
Mr. O'Flaherty. I think it is not accurate to say that
their policies have discouraged investment. What you have in
South Africa is a system of government--private sector-
government relations left over from apartheid that has
generated huge inefficiencies, enormous distortions, and
created relationships where the regulators were in bed with the
regulated and where the government was not truly an objective
force in managing the economy.
We have--that system has broken down. It has been reformed
to a very large extent, but our companies still face problems
in getting procurement. There are challenges in the
transparency of the government procurement system which I
enumerated at some length. But in the interest of time, I will
just say that there are oddities about a way business is done
in South Africa that sometimes make it difficult for American
companies to enter the market.
Mr. Royce. I see.
Mr. O'Flaherty. That is entirely independent of the
international agreements that we have alluded to before, such
as the EU trade agreement.
Mr. Royce. I thank you. Before I turn to Mr. Payne, I
should mention that Chairman Gilman has submitted some
questions for you, and we will provide you with those questions
later, if we could. We are just going to do that for the
record. I thank you very much.
Mr. Payne?
Mr. Payne. Mr. Ray, do you think that Africa, in general,
would benefit from the creation of an international law
enforcement agency in Africa. Or do you know whether there has
ever been any discussion about that? I guess, in addition to
that, do you think that by creating such an institution, there
would be some suspicion on the part of some African leader or
heads of state that this might be a counter-intelligence
operation? Going back to the old Cold War, I guess there are
still feelings, remnants of that sort of thing.
Mr. Ray. Yes, sir. These issues came up with the
development of the international law enforcement academy in
Budapest, with some--with our Russian counterparts. At that
time, we sat down with all of the governments and reassured
them that this academy's goal was to develop and to
professionalize criminal investigators.
On point, we are very candid that we still had our national
security interest at heart, and we would never blend those two
in that setting. The Russians were satisfied with that, and to
date we have tried to keep those two separate in that academy.
So in the instance of Africa, while I have not personally
heard that as a concern, in terms of the center being an
intelligence center, the Africans are concerned about their
sovereignty, and they are concerned about too much of a U.S.
role. But they recognize that this academy will aid and assist
them in developing a professional law enforcement base, and
from what I can gather are enthusiastically wanting to pursue
this.
Mr. Payne. I guess, under apartheid you didn't have
investigations and Miranda rights, and all the things that a
just law enforcement operation would have.
Do you think that because of the way that policing was run
in the past where, perhaps the officers were judge and jury,
and executioner, too, I guess, that there is a lack of
detective work and that kind of work being done in the South
African police department? It seems like there has just been,
an explosion of petty crime, and even not so petty crime, and
that perhaps the police department is lacking those kinds of
expertise by virtue of the past when they didn't have to go
through all of that.
Mr. Ray. Yes. I think that many of the leaders in the South
African police service recognize that because they operated so
long on this confessional base system that the rules of
criminal procedure, forensic applications, they are just behind
in those areas. But I think that there is a willingness on the
part of the people that I met to recognize that and to look out
for donor countries, not only the U.S. but other countries that
are operating.
But to answer your question, yes, the police--the South
African police have a deficit in that area. But they recognize
it. I think that is more--that is very important.
Mr. Payne. That is great.
Let me ask Mr. O'Flaherty. There is talk of a lack of
investment in South Africa, but what about the 90-plus percent
of the assets of South Africa that also in the hands of the
minority white South Africans? Have they decided to invest in
their country yet? I know this would unleash much needed
investment, but have they found fit yet to invest in their own
country?
Mr. O'Flaherty. In fact, they have not been able to invest
anywhere else for a very long time because of exchange
controls. So that because of exchange controls there were
distortions in the pattern of investment. When you have been to
South Africa, you will have noticed the enormous number of
shopping malls that exist.
You will have possibly gone to Sun City or to other of the
casino resorts. Many of these were created by virtue of the
absence of normal investment opportunities that people would
have taken advantage of abroad. So that exchange controls have
kept money in South Africa.
The question is whether that meant that the money was used
in the most efficient way or in a way that benefited the
majority of the population, and the answer to those two
questions is definitely no. The money is there. It is a
question of where it goes.
Mr. Payne. Finally, since my time has run out, and still
there is a question to the FBI that Mr. Gilman would like
answered too I will actually submit that, in writing so that
you can respond to that.
Finally, have any of the sort of programing we had when we
were in an economic downturn, such as the WPA in the 1930's,
and the CCC camps that President Roosevelt started, public
works, and I know South Africa does not have the--necessarily
the capital that it needs.
But has the project of housing development or road
construction done by the government had any impact on job
creation, that is, in addition to creating better a living
environment? Has the government implemented any kind of counter
cyclical program to break the cycle of this unemployment by
investing Federal dollars?
Mr. O'Flaherty. Congressman, they are in a bind. They are
trying to get their government deficit down in order to attract
foreign investment, in order to meet the standards of the world
economic community. In order to do that, they can't engage in
deficit spending. They can't engage in traditional pump
priming, New Deal programs, which would be very attractive to a
government in their position.
They have, instead, chosen to engage in training and
education programs. But as far as creating direct government
employment of the sort that you are talking about, there hasn't
been very much of it. I think it does go back to their need to
demonstrate fiscal discipline to the world.
Mr. Payne. Thank you very much.
Mr. Royce. Thank you.
Ms. Lee?
Ms. Lee. Thank you very much.
Mr. O'Flaherty, let me just ask you briefly about the U.S.-
South Africa Business Council's involvement and discussions
with regard to the whole HIV/AIDS pandemic. I notice in your
testimony you say all U.S. employers are participating in
workplace education, which I think is great, and I hope that it
is all U.S. employers that are doing that.
Beyond that, I am concerned about the benefit packages that
U.S. employers have for South African workers, as well as
clinics, health care services, access to medicines. Have you
had a discussion with regard to strategies on this pandemic?
Mr. O'Flaherty. Congresswoman, yes, we have. But I must
tell you that these discussions need to go into much greater
depth. This crisis has--the awareness of the crisis and the
sense of real crisis has only evolved in the last 9 months to a
year. South Africa had a spreading AIDS problem long before it
was publicly acknowledged by anybody.
So I think one of the important contributions that an
organization like ours can make is to help our companies, along
with the American Chamber of Commerce in South Africa, to
cooperate, collaborate, and to focus their efforts in similar
ways. Obviously, workplace education is the place where they
can most effectively operate, but clinics is certainly another.
Of course, some companies like the pharmaceuticals have special
expertise and special resources.
But it is something that affects all American companies and
all South African companies. So we have work to do.
Ms. Lee. Thank you. Let me--we heard Secretary Rice talk
about the discussions now with regard some strategies that are
taking place. Are you involved in those discussions?
Mr. O'Flaherty. Yes, absolutely. We have been participating
in discussions with the Vice President's office now for--since
last summer.
Ms. Lee. Very good. Thank you.
Let me ask Mr. Ray. Just briefly, I don't know a lot about
the international law enforcement academy, and it has been
fascinating to hear your presentation this morning. Following
up on Mr. Payne's question, with regard to the law enforcement
academy being perceived as a place for investigations or
intelligence gathering--is, in fact, that--could that be part
of the operation, if, in fact, we wanted it to be? Are covert
actions allowed or not allowed?
Mr. Ray. My personal opinion would go something like this.
All things are possible. But one would have to balance the need
for our desire to correct the criminal investigative process in
this country against the benefits that might be gained by what
you have suggested. In that sense, on balance, it just wouldn't
make any sense.
The history here with these academies is that under no
circumstances do we allow, at least under leadership of the
FBI, to allow that kind of thing to creep in.
It has never been--it was an issue with the Russians up
front. We came to the table, put the cards on the table. They
were satisfied with our position, and I have been involved with
this process probably longer than anybody in the government,
and not----
Ms. Lee. Do you coordinate with the CIA?
Mr. Ray. There is no coordination with the CIA on these
issues.
Ms. Lee. Thank you very much.
Mr. Royce. I thank our witnesses.
Before we adjourn, I would like to recognize one of our
interns--this is her last week with us--Saadia Lababidi is with
us, and I would like her to stand at this time. She is
originally from Lagos, Nigeria. She has resided in Cairo and
Colorado, and she has been of great help to our Subcommittee,
and I thank her very much.
I thank you, gentlemen, for making the trip down here to
testify today before our Committee. Thank you so much.
The meeting is now adjourned.
[Whereupon, at 4 p.m., the Subcommittee was adjourned.]
=======================================================================
A P P E N D I X
October 14, 1999
=======================================================================
[GRAPHIC] [TIFF OMITTED] T4474.001
[GRAPHIC] [TIFF OMITTED] T4474.002
[GRAPHIC] [TIFF OMITTED] T4474.003
[GRAPHIC] [TIFF OMITTED] T4474.004
[GRAPHIC] [TIFF OMITTED] T4474.005
[GRAPHIC] [TIFF OMITTED] T4474.006
[GRAPHIC] [TIFF OMITTED] T4474.007
[GRAPHIC] [TIFF OMITTED] T4474.008
[GRAPHIC] [TIFF OMITTED] T4474.009
[GRAPHIC] [TIFF OMITTED] T4474.010
[GRAPHIC] [TIFF OMITTED] T4474.011
[GRAPHIC] [TIFF OMITTED] T4474.012
[GRAPHIC] [TIFF OMITTED] T4474.013
[GRAPHIC] [TIFF OMITTED] T4474.014
[GRAPHIC] [TIFF OMITTED] T4474.015
[GRAPHIC] [TIFF OMITTED] T4474.016
[GRAPHIC] [TIFF OMITTED] T4474.017
[GRAPHIC] [TIFF OMITTED] T4474.018
[GRAPHIC] [TIFF OMITTED] T4474.019
[GRAPHIC] [TIFF OMITTED] T4474.020
[GRAPHIC] [TIFF OMITTED] T4474.021
[GRAPHIC] [TIFF OMITTED] T4474.022
[GRAPHIC] [TIFF OMITTED] T4474.023
[GRAPHIC] [TIFF OMITTED] T4474.024
[GRAPHIC] [TIFF OMITTED] T4474.025
[GRAPHIC] [TIFF OMITTED] T4474.026
[GRAPHIC] [TIFF OMITTED] T4474.027
[GRAPHIC] [TIFF OMITTED] T4474.028
[GRAPHIC] [TIFF OMITTED] T4474.029
[GRAPHIC] [TIFF OMITTED] T4474.030