THE WHITE HOUSE

                     Office of the Press Secretary
                           (Arusha, Tanzania)
________________________________________________________________________
For Immediate Release                                    August 28, 2000

U.S.-Tanzania Bilateral Relations

Today, the United States and Tanzania signed an Open Skies Agreement. Tanzania is one of six African countries to have signed such an agreement with the United States (Burkina Faso, The Gambia, Ghana, Namibia and Nigeria have also signed Open Skies agreements with the United States, all of them under the Clinton Administration.) The Agreement will give both countries' airlines unrestricted international access from any airport to any airport in either country. The agreement encourages competition that benefits users, is likely to lead to lower prices for passengers and shippers and encourages improved and expanded airline service to existing and new markets, thus enhancing customer access to more locations.

Today's signing builds on already strong cooperation between the United States and Tanzania that includes joint initiatives for democracy, economic development, regional stability and health.

Economy. Since 1995, under the Mkapa administration, U.S. direct investment in Tanzania has approximately doubled, and now amounts to about $26 million. U.S. firms have entered the growing telecommunications, agriculture, mining and tourism sectors. Tanzania's stunningly beautiful environment -- which includes several important game parks and majestic Mount Kilimanjaro -- has made it an increasingly popular tourist destination.

President Mkapa has introduced economic policies that have lowered inflation, reduced the budget deficit, and stimulated entrepreneurship. More than 275 of Tanzania's 425 parastatal corporations have been privatized. These policies have resulted in an annual GDP growth rate averaging four percent in the past five years.

Since taking office in 1995, President Mkapa has stressed free-market reform and progressively shed the socialist model that slowed Tanzania's economic growth for several decades. He has also made great strides in helping democracy grow, cleaning up corruption, and modernizing Tanzania's legislative and judicial systems. Despite its successes, Tanzania remains a poor country and suffers from periodic droughts, high rates of illiteracy, and malnutrition. HIV/AIDS is one of the country's primary killers.

HIPC. Tanzania is the third African country to have qualified for the expanded Heavily Indebted Poor Countries (HIPC) Initiative. The United States supports rapid implementation of the HIPC initiative for eligible countries that undertake economic reform and dedicate the freed-up resources from debt relief to priority needs such as health and education. Nine countries have qualified for expanded debt relief under the initiative. As many as 20 countries are expected to qualify by the end of 2000

Regional security. Tanzania plays a significant role in African regional security issues and enjoys generally positive relations with its neighbors. As a member of two regional groupings --the Southern African Development Council and the East African Cooperation -- Tanzania has a voice in economic, security, and other issues of concern to all of eastern and southern Africa.

Burundi peace talks. Tanzania has been encouraging and supporting a rapid conclusion to the Burundi conflict and the quick return of refugees to Burundi. Tanzania hosts the Burundi peace talks in Arusha and the International Criminal Tribunal for Rwanda. Tanzania has earned international praise for the way in which it has received over 500,000 Burundian refugees, notwithstanding the heavy economic and ecological burden posed by the refugees.

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