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This is an archived USAID document retained on this web site as a matter of public record.
Remarks by Harriet C. Babbitt,
to the U.S. Chamber of Commerce
USAID Deputy Administrator
"Public Policy and Global Corporate Citizenship"
May 1, 2000
Thank you and good morning. It's a pleasure to be here.
Alexis de Tocqueville noted that "Americans make great and real sacrifices to the public welfare. They hardly ever fail to lend faithful support to one another." And this, he said, is good citizenship.
Nearly two centuries have passed since Tocqueville made that observation, and over and over again Americans have proven him right.
We help one another not because we have to, but because we want to. And because we know that if our community is healthier, more prosperous, and more secure, we ourselves will be healthier, more prosperous, and more secure.
But the question the Chamber is facing today is -- how do we continue our tradition of good citizenship in this new era of globalization?
Over the past few years we have all heard a lot of talk about globalization and what it means for our livelihoods, our communities, and our country.
People disagree as to what exact impact it will have, but no one argues with this fact: the world is getting smaller, and it is moving faster.
As I worked on these remarks yesterday I was reminded of how fast the dialogue has changed when I realized that the word "globalization" was not recognized by my five-year-old spell checker!
In the quickly changing, globalizing, post-Cold War era, spellcheckers, companies and governments have changed the way they do business.
In terms of the flow of resources, the relative roles of official development assistance and foreign direct investment have flipped.
In 1990, Official Development Assistance to developing countries as a percentage of GNP was 4.3 percent. By 1997, this number had slipped to 2.9 percent.
But over the same period, Gross Private Capital Flows rose from 2.4 to 3.4 percent of GDP, with Foreign Direct Investment accounting for nearly all of the increase.
But we know that 70 percent of FDI has gone to the top ten recipients -- most of these are middle-income countries, not the majority of developing countries.
So what is the new role of government in this new era?
The very economic reform-minded Konstantin Titov, Governor of the Russian region of Samara, says that government's role in the economy should be like that of a referee on a soccer field -- doling out yellow and red cards to those who break the rules but otherwise trying not to interfere with the free flow of play.
I would add that in this new era of globalization, governments and businesses will also have to work together to decide just what those rules are -- when and how to regulate the Internet, for example, and how much regulation is fair, are two questions that need addressing.
As we have seen by the recent protests in Seattle and here in Washington, the global marketplace has left a lot of people feeling insecure about their future -- both economic and political.
While the demonstrators in the most elaborate flora and fauna-based costumes were probably middle-class Americans, the developing world is also deeply fearful about how economic globalization will affect it.
The growing inequities in income distribution, both within and among nations, is demonstrable and real. And they affect both our nation's role as a good global citizen and our national security.
One of the ways the United States government tries to be a good global citizen is through its foreign assistance programs.
My agency, the U.S. Agency for International Development, or USAID, is the U.S. government agency in charge of administering America's foreign assistance dollars.
We work to improve the playing field in developing countries.
We do this by helping to lay the legal and economic foundations that allow international corporations to invest in these emerging markets.
Partly as a result of our work with the American Bar Association, judges in the country of Georgia for the first time are required to pass a test demonstrating that they know the law they are called on to interpret -- quite an accomplishment in a country where for years the Communist Party chose judges based on ideological purity.
We have programs that help create the regulatory institutions countries need to attract and keep foreign investment.
In India, for example, we worked with the SEC, the Depository Trust Company and the Chicago Board Options Exchange to help establish India's first securities depository and help bring India's capital markets in line with international standards of efficiency and transparency.
But we also work with businesses to lay the infrastructure many of these countries need.
For instance, USAID helped bring together TeltecGlobal of Colorado and Vantage Communications Uganda. They signed an agreement in March for a joint venture to set up a telecommunication center in Kampala.
The center will contain an Internet-linked kiosk and house a retail area for computer hardware and software. There will be two classrooms for in-house training that will double as Internet user areas, and will contain an international call center, as well as mini-banks for local money transfers.
And the infrastructure that TeltecGlobal and Vantage Communications help lay will also attract other investors.
USAID also helped establish the first private coal washing facility for power plants in India.
Forty percent of the weight of India's very soft coal is ash, which should be removed before being used by power plants. By removing the ash at the washery before the coal is shipped, this project helps reduce both the cost of shipping the coal to the power plant and the environmental impact when the coal is burned.
This washery is another good example of USAID encouraging cooperation between American and Indian businesses -- in this case, between Spectrum Technologies and the CLI Corporation in the U.S. and BSES in India.
Ultimately, both things -- a strong legal and economic framework as well as this kind of energy-efficient, technology-friendly infrastructure -- are critically needed if developing countries are to succeed in the global marketplace.
In the 21st century, putting both of these in place must be at the heart of our public-private collaboration.
I have hundreds of examples of the good work USAID has done, most in partnership with the U.S. NGO and business communities. We are proud of the role we play on behalf of the United States and look everyday for ways to work even more effectively.
But I'd like to broaden the discussion to the growing realization that worrying about developing countries is much larger than just the USAID "soft" side of the "more important" security issues.
Let's take HIV/AIDS as an example.
Until recently, many viewed HIV/AIDS solely as a health issue. The news on HIV/AIDS infection rates and treatment successes in the United States shows enormous gains.
The U.S., through USAID, is already the world's largest bilateral donor in the global fight against HIV/AIDS.
If you saw Bart Gellman's article in yesterday's Washington Post you know that HIV/AIDS in the developing world has graduated from a health issue to a security issue.
This was first reflected in January when Vice President Gore spoke about HIV/AIDS in his address to the United Nations Security Council -- the first time a health issue was treated as a real security concern.
A recent U.S. national intelligence estimate projected that a quarter of southern Africa's population is likely to die of AIDS and that accelerating trade and travel are pushing much of Asia, particularly India, toward a dramatic increase in infectious disease deaths -- largely due to the spread of HIV/AIDS.
The dramatic numbers in terms of percentages of populations are in sub-Saharan Africa. But India, with its enormous overall population, has the largest absolute number of infected citizens of any country in the world. And HIV/AIDS is growing rapidly in Russia, with little attention.
The National Intelligence Estimate concluded that dramatic decreases in life expectancy are the strongest risk factor "for revolutionary wars, ethnic wars, genocides, and disruptive regime transitions."
More broadly than HIV/AIDS, the preparations for the upcoming G-8 meeting in Okinawa in July reflect an acceptance by the leading industrial powers that global poverty reduction is central to their interests -- that is, our interests.
The G-8 document under negotiation recognizes the urgency and the need for both public and private sectors of the developed world to play a driving and increasingly creative role in development.
For reasons of good citizenship and for reasons of self-interest, it is critical that we not allow globalization to be defined by the growing inequities between the "haves" and the "have-nots".
I want to congratulate the Chamber for its leadership in recognizing and pushing this important agenda.
Your program today seizes one of the critical issues of our day and provides the working groups to design some of the solutions.
As we enter the 21st century, I hope we can all work together -- government and business, Presidents and CEOs --to expand opportunity for all the people of the world.
As Tocqueville said, its good citizenship.
And good citizenship benefits us all.
I am honored that you invited me to be part of the program today.
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 |
