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This is an archived USAID document retained on this web site as a matter of public record.
Remarks by J. Brady Anderson,
Women: The Emerging Economic Force
USAID Administrator
Conference at the Center for International Private Enterprise (CIPE)
June 15, 2000
[As prepared.]
Thank you, Kelly, and good morning everyone. It's a pleasure to be here.
One reason I am happy to be with you is that the U.S. Agency for International Development has a long history of working with the U.S. Chamber of Commerce-particularly with the Chamber's Center for International Private Enterprise, or CIPE.
We have common interests. Both CIPE and USAID understand that in this new era of globalization, as international borders recede, business will play a fundamental role in spurring economic growth in developing countries.
And we both understand that there are few things more central to the success of international business than sound rules and practices-what some refer to as corporate governance.
There is no substitute for transparency, accountability, and good management.
In developing countries, establishing these practices and principles helps attract private investment and helps businesses compete internationally-and ultimately, they help spur the economy.
Corporate governance, then, is as important to development as it is to business.
So today, I am very pleased to announce that the U.S. Agency for International Development will award the Center for International Private Enterprise a grant for $500,000 to promote corporate governance in the countries of Central and Eastern Europe and Eurasia.
The grant will be used to create a regional network of business groups, to train business leaders, help businesses implement models of corporate governance, and engage local communities in the push for reform.
I believe it will have a very real impact on the development of a sound economic base for this region of Europe.
And as the title of this conference suggests, there is another very important engine of growth in the developing world: women.
According the United Nations, nearly half of the world's business owners are women-and they are responsible for over half of the economic activity in developing countries.
Still, only one-third of the work women do in the developing world is measured and counted in national economic reports.
And even though women's contributions to business are one of the major engines of global economic growth, too often women do not have access to basic business education, commercial credit, and marketing opportunities.
In too many parts of the world, banks refuse to lend to women simply because they are women-often, women cannot even open a bank account without a male co-signer.
Something we all know is that it is in everyone's interest to improve the status of women: studies show that societies that promote women's rights are healthier and more prosperous. Societies that restrict women's rights are just the opposite.
In Central and Eastern Europe and Eurasia, women own one-quarter of all businesses: the grant I announced this morning will help these businesses and others adhere to the principles of the free market.
And in a world where businesses need to succeed in the global marketplace as well as in the local market, it will help these women take their firms global.
We look forward to working with CIPE and women business owners in this region. I'm pleased that USAID sponsored women to come to this conference: we will continue to work with you toward our mutual goals.
As the new century dawns upon us, the question on everyone's mind is "How does a business grow?"
In this age of endless opportunity, it means we are all looking for ways to turn our ideas into business plans-and ways to turn business plans into actual businesses that make money.
Whether the dream is to open up a fruit stand or an international consulting firm-a successful business will need the same environment:
A strong rule of law, an honest judiciary, an independent press, and laws and regulations that encourage entrepeneurship and innovation.
I should add that these things are, I believe, especially important for women business owners-because again, they provide a guarantee of fairness.
In developing countries all over the world, these are the principles that USAID promotes.
It is our work in these arenas that leads to the development of strong, stable democratic and economic institutions. And it is these institutions, in turn, which allow trade and investment-creating new opportunities and markets.
It begins with a strong rule of law, and a government that is free of corruption and responsive and accountable to its citizens.
A nation without these things is a nation where businesses have no protection or recourse against criminals, and where there is no guarantee that contracts will be honored.
As CIPE Executive Director John Sullivan has said, without a strong rule of law and good corporate governance, investments become bets:
bets that people will keep their word, bets that firms are telling the truth, bets that employees will be paid, and bets that debts will be honored.
No investor wants to take that kind of risk.
USAID works to strengthen the rule of law where it makes its home: in the courts.
In Guatemala, for example, it was commonplace for corrupt court officials to "lose" case files-in a one year period from 1997 to 1998, for instance, over 1,000 files were lost in Guatemala City alone.
This meant that people charged with crimes sat in Guatemalan jails without trial-and by extension, that officials could have people arrested for any reason, or for no reason.
But in 1998, USAID helped establish a Clerk of Courts office in Guatemala City, the first office of this kind in a Latin American capital.
For the first time ever, the court system has a caseload inventory, and, in the one year period after the office opened, only one case file was lost.
Reforms like this mean that women, and business women, are far more likely to get a fair hearing in court.
USAID also helps developing countries reform their tax codes:
A government with overly complex and burdensome laws and regulations invites official corruption, creating an environment where business is judged not by the quality of its product but by its ability to pay bribes.
When I was Ambassador to Tanzania, one of the things USAID would do for American firms interested in investing in Tanzania was to walk them through the steps of setting up a business.
They had a flow chart stuck to the wall that showed all 75 steps and licenses and regulations you had to follow to be allowed to operate.
Needless to say, Tanzania did not attract a lot of private investment dollars.
But then-we showed our charts to the government, and said, "why would American firms want to invest here when they can go to places like Taiwan or China or India and not have to deal with all this?"
Today, Tanzania's 75 steps have been reduced to a scant 14, and the country is attracting much more private investment.
These conditions, and others-like high inflation and the lack of sound infrastructure-not only make it hard for existing businesses to operate but also for new businesses to get going-especially in those countries that are still trying to figure out how the market operates.
Perhaps the number one obstacle to starting a new business is lack of capital.
USAID is active in this arena, too.
Our microenterprise program gives women and men small loans-from as little as $40 to $1000-to start and expand their own small businesses.
In 1998, over 3.5 million people were involved in our microenterprise programs, with active loans totaling $1.3 billion.
Eighty-four percent were women.
In fact, women are the most successful entrepreneurs in this program, where the average loan repayment rate is over 95 percent.
This shows that even under the most extreme conditions, women are good credit risks.
So, the challenge facing business in the 21st century is: not only how to get businesses off the ground, but how to transform the very fabric of societies in developing countries to make them more friendly to private enterprise.
It is a big challenge, but I know working together, we can overcome it.
To do so, we will need resources. So in closing, let me say one last thing.
This summer Congress will vote on the Foreign Operations Appropriations bill, which includes funding for USAID's activities.
Following the trend of the past decade, funding for our programs is once again in jeopardy this year-especially for those programs that help strengthen the rule of law and promote democracy.
And these are exactly the programs that help provide a better environment for businesses to prosper.
In a time of unprecedented economic growth and prosperity, I believe the United States can do more, should do more, and must do more to help the developing world meet the challenges of the 21st century.
It is in our best interests to do so.
Today, the United States is dead last among the industrialized world in the proportion of our wealth that we spend on foreign assistance programs.
This must change, in my opinion.
And with your help, I know it will.
Thank you again for inviting me here today.
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 |
