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This is an archived USAID document retained on this web site as a matter of public record.
Remarks of Ambassador Harriet Babbitt, USAID Deputy Administrator
to the Association of Women in International Trade
June 15, 1999
I was delighted to be invited to speak to this group because you are on the cutting edge of some of the major economic trends that are transforming our world.
Women have been involved in business for a long time. The ideal woman King Solomon described in the book of Proverbs was concerned about the welfare of her family, but she was also a good businesswoman. She got a good price for the goods she sold.
Yet through much of history, women have been limited in their ability to participate in business, especially international trade.
That is changing. Despite all the obstacles, today women own between a quarter and a third of all businesses worldwide
More and more women are also making decisions as business owners, corporate executives and board members about what corporations will sell, when they will enter new markets or introduce new products, how they will finance expansion, and when they will merge or go public.
According to the United Nations' Human Development Report, "Four out of 10 women business leaders are currently involved in the international marketplace." In a survey reported on last summer, half said they had become involved in international trade within the past year -- and the half who were not said they had plans to become involved in the next three years.
You are about to get lots of company.
Your invitation was gratifying for another reason. It indicates you are aware of one of the most important aspects of the U.S. Agency for International Development - that we help create the conditions that foster trade and investment.
Many Americans think of development assistance as simply giving something away -- and thereby taking something away from our own people. In fact, we are furthering U.S. national interests when we promote economic growth in developing countries.
People who have nothing do not make very good customers. To be good trading partners, countries must have something to trade and be able to buy from us. Development assistance helps provide the tools to get new trading partners into the game.
As Federal Reserve Chairman Alan Greenspan often points out, "Trade is not a zero sum game."
The United States needs expanding markets to fuel our own growth. Exports accounted for only 13 percent of our economic activity as recently as 1980, but as we enter the year 2000, exports will account for about 30 percent.
Developing countries have been the fastest growing markets in recent years, and represent the greatest potential for the new century. Helping developing countries get in a position to participate in the global economy is a win-win proposition -- for them, and for American businesses, investors and consumers.
In 1947, when Secretary of State George Marshall announced the plan for rebuilding wartorn Europe, he said "our policy is ... against hunger, poverty, desperation, and chaos, so as to permit the emergence of political and social conditions in which free institutions can exist."
He was talking about American ideals, but he was also talking about good business. We are still guided by those principles, and by the Point Four Program that expanded U.S. foreign aid to include developing countries. Hunger, poverty, desperation and chaos do not create a climate in which business thrives -- especially today's high technology business.
Our world is being transformed by the globalization and democratization of technology, telecommunications and finance that has taken place since the end of the Cold War.
The Cold War was a contest between political and economic systems. It did not end in the nuclear confrontation we had long feared, but in the collapse of one of the systems.
The Soviet system was about total control. With its collapse, the countries that had been within its sphere moved toward democracy and free market economies -- and so did others around the world, from Latin America to Africa.
A couple of weeks ago, USAID co-sponsored a "Women Mean Business" conference in Chicago that brought women from around the world to share their experiences with American women.
Most of the women who attended this meeting had started small businesses - many with loans of $50 to a few hundred dollars -- microenterprises. Queen Rania of Jordan brought women artisans she had helped to revive and market almost forgotten handcrafts. Prior to attending the conference, many of them had never before traveled outside their countries.
I pointed out that the women at the conference all had a lot in common with Steve Jobs, who had started Apple Computers in a garage.
The Jordanian women artisans, for example, had also created products that - like Jobs' computers - created new markets by meeting needs people may not have been aware of before.
Like Jobs, each of the women at the conference was using her unique creativity, knowledge, skills and energy to make a better life for herself and her family by meeting the needs of others. In the process of serving their customers, these women were also improving their communities and their countries.
Another favorite theme of Fed Chairman Greenspan is that, "Ideas are responsible for the majority of the growth in U.S. gross national product in recent years."
I believe that ideas and innovation will also be responsible for much of the future trade and economic growth in the developing world.
Not only world stock markets, but village markets as well are affected by globalization.
Most of you probably made the deliberate choice to get involved in international trade, but the truth is, even the smallest, most localized businesses today feel the impact of global markets. Even if your market is across the street, your basic production and distribution costs may be affected by labor and materials costs half a world away.
You cannot choose not to be affected by globalization and change. To succeed, you have to make choices that will make globalization and change work for you. That's called "choosing prosperity."
The same is true of developing countries. If they do not choose to do the things that will enable them to compete in the global market, they will fall further behind.
As chairman Greenspan says, "All economic progress rests on competition."
Some of the traditional ways governments have tried to make their country's business more competitive -- such as protectionism -- no longer work.
But governments still play a critical role. They have to create the legal systems, regulatory safeguards, policies and climate that foster economic growth, trade and investment. They must also invest in public education to give their people the tools to compete.
Macroeconomic reforms are essential, but insufficient without the reforms that establish legal systems and regulatory safeguards that create a climate of transparency, fairness and trust. Cronyism and corruption can chase away the new pools of capital that are vital to developing countries, as the Asian financial crisis demonstrated.
And, while they are essential, macroeconomic reforms are not enough to assure that companies or countries will be competitive. Microeconomics, down to the level of individual companies, must also be right.
As Michael Fairbanks and Stace Lindsay contend in their book, Plowing the Sea: Nurturing the Hidden Sources of Growth in the Developing World, over-reliance on traditional comparative advantages - such as natural resources, climate, or cheap labor -- can prevent companies and countries from developing the competitive advantages needed for success to today's global market.
In addition to finding the right industry segment and staying ahead of changing conditions and customer needs, Fairbanks and Lindsay point out that concentrations or "clusters" of related businesses help to fertilize and support innovation.
For developing countries -- as for you here today -- making the right allies, such as suppliers or distributors that have a stake in your success, can also help create important cost-saving efficiencies.
On the other hand, short-sighted competition based on exploitation of minorities, child labor or environmental destruction is self-defeating and cannot be sustained.
Indeed, developing countries cannot afford to ignore environmental considerations until they have achieved economic growth, as some insist.
Developing countries lack the resources to correct expensive mistakes, even when such mistakes are correctable. The damage to their fragile environments, the health of their people -- and to their future hopes for economic growth -- may be irreversible.
USAID provides assistance in macroeconomic reforms and in strengthening democracy and governance, the rule of law and freedom of the press.
We provide technical assistance to developing and transitional countries to privatize inefficient state-owned industries, and to establish standard accounting and auditing practices, financial markets, regulatory agencies and commercial codes.
Our Global Technology Network helps match the needs of developing countries with U.S. companies that can fill them. The Network focuses on environmental, health and agricultural products and information technology that foster sustainable, responsible growth.
New York Times foreign affairs columnist Thomas Friedman writes in his bestselling book, The Lexus and the Olive Tree, about the importance of enabling developing countries to plug into the global information networks.
Through the Leland Initiative, USAID is providing access to the Internet in African countries -- helping them plug in to globalization.
The future of Americans is ever more closely tied to the future of the developing world and the countries making the transition to democracy and free market economies.
The United States has succeeded spectacularly in the era of globalization because the things that are in most demand in our post-industrial world are things we tend to do best -- from financial management to waste management, fast food to fast computers, entertainment to environmentally friendly technology.
The rules that make globalization work are largely the rules that we have been playing by - the unrestricted flow of information, competition that encourages creativity and innovation, the rule of law that respects human rights and property rights.
The founders of our country seemed to understand that such principles not only facilitate the pursuit of happiness, but also the pursuit of economic growth.
Someone handed me a recent issue of Science News that had an article about innovation in the animal world. Scientists looked at a variety of studies over the years and found females tend to be more innovative than males in such varied species as guppies, blue jays and chimpanzees.
"The creative spark flares especially bright among the young, the low-ranking and the hungry," the scientists found.
Most animal innovations died with their lowly innovators, the scientists concluded, because no one was watching them.
Globalization means that among human beings, everyone is watching. Like jokes on the Internet, news of innovations can travel around the world before sundown.
I believe Americans will benefit from the ideas and innovations unleashed in developing countries by globalization.
The innovative potential of the people in developing countries -- like the potential resources of undiscovered and unstudied species -- offers a vast untapped reservoir of new ideas and energy to enrich our lives and our futures as well as theirs. USAID is helping developing nations and their people unleash that potential.
Change is inevitable, but prosperity is not. Globalization has the power to do great harm as well as good -- to individuals, communities, countries.
Without safeguards, without democratization, freedom of information and respect for human rights, globalization could become a monolithic monster that gobbles up the weak, ignores human values and human needs and feeds on people instead of feeding them.
But it does not have to be that way.
Friedman tells a wonderful story about the elders of a village in the Amazon rainforest gathering in a hut that might have existed in pre-history.
The elders were watching a single television set served by a satellite dish, flipping between a Brazilian soccer game and reports of prices on the world gold market. They used the price information to set fees for small miners they allowed to work on the edges of the tribe's property.
Nearby, international scientists had a biotechnology center. The Body Shop was marketing products internationally made from materials that grew on their land.
Those wise village elders provide us a useful model of how to make globalization and change work for the better. They had found a way to preserve their heritage and what was most valuable in their ancient culture by allying themselves with environmentalists, international scientists and concerned businesses -- using cutting edge technology and global markets.
That is the hope -- perhaps not yet a promise -- that globalization can bring.
Thank you.
This is an archived USAID document retained on this web site as a matter of public record.
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Last Updated on: July 12, 2001 |
