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This is an archived USAID document retained on this web site as a matter of public record.
Remarks by Frederick W. Schieck,
Deputy Administrator, USAID
Address to the National Rural Electric Cooperative Association Annual Meeting
Dallas, Texas
March 13, 2002
Thank you for that kind introduction. It is a great pleasure to be here in Dallas and have the chance to speak at NRECA's annual meeting.
I am pleased to be here to represent the U. S. Agency for International Development which has had a long association with NRECA and your international programs.
The United States has a profoundly important role in making the world more peaceful, decent and civilized for all of its citizens. From our work together, we know the difference that America - that Americans - can make in the world in support of freedom and democracy and economic opportunity. But we all are facing a world that is changing very quickly.
The word "globalization" may be overused, but it is a reality. For many people, globalization means seeing the world through the Internet; it means more open international trading and financial systems that strengthen economic partners; it means the spread of democratic capitalism.
But for many, the benefits of globalization remain unfulfilled; look at the increasing number of failed or failing states and of civil wars, many of horrifying brutality. Nearly two-thirds of the countries where we work have been ravaged by civil conflict over the past five years. Such conflict threatens years of social, economic and political progress. It ought to be clear to everyone that there is a direct connection between the conditions people live in, the hopelessness in some countries, and the violent political movements that seek to overturn not just progress in the developing world, but progress in every country.
When we look carefully at what has happened in Central Asia, it came about partly because public education systems have been lacking. In Pakistan, for example, the public education system collapsed years ago and this led to the development of a group of people who are very angry and isolated from the rest of the world. They served as fodder for the Al Qaeda network and for the Taliban regime. So, it is in our interests to help people in developing countries to overcome the conditions of poverty and poor government performance which are all too common.
Energy has a key role to play in providing the basis for increasing prosperity and stability, in reducing the gaps between the rich and poor, in accelerating programs to address health problems such as HIV/AIDS and other infectious diseases. We cannot attack poverty, we cannot improve food security, we cannot build economic opportunity in poor countries without energy. When we talk with villagers around the world, we hear: "we want electricity to light our homes and classrooms, to pump water, to make bread, to power our small workshops, to listen to radios, to learn on computers and gain access to the internet, to refrigerate medicines and vaccines in hospitals and clinics.
Electricity is something most of us take for granted in this country. Indeed, if the power goes out for an hour or two after a heavy storm, people think a crisis has occurred. But this only shows how essential electricity has become to modern life and how impossible it is to do without it.
A hundred years ago, most of our cities had functioning electric systems or were in the process of establishing them. But in rural areas, it was another matter. As late as 1935, only about 500,000 of the nation's 6.5 million farms had electricity. As the historian William E. Leuchtenberg wrote of that period, "the lack of electric power had divided the United States into two nations: the city dwellers and the country folk. Farmers toiled in a 19th century world; farm wives, who enviously eyed pictures in the Saturday Evening Post of city women with washing machines, refrigerators and vacuum cleaners, performed their backbreaking chores" like women in a pre-industrial age.
There was a divide between urban and rural dwellers. To address this divide, the Rural Electrification Administration was set up in 1936; and that was followed by the creation of the National Rural Electric Cooperative Association -- NRECA - seven years later. Together they have had a dramatic impact on rural America. Within a matter of years, virtually every farm district in the country had electricity, and the electrical divide between the country's rural and urban dwellers ceased to exist.
The U.S. Agency for International Development was founded in 1961, with a broad mandate to help the developing nations of the world achieve higher standards of living, better health, and stronger institutions of government. Given the very evident lack of electrification in the rural areas of the countries where we work, and given our own country's experience with rural electrification and what is has meant for our own development, it was natural that USAID would want to address this great disparity in access to electricity. For help, we naturally turned to the people who had first-hand experience in addressing rural electrification needs, NRECA and the idea of rural electric cooperatives. Thus, it was in November 1962, that USAID signed its first agreement with NRECA, and its newly established International Programs Division, at a White House ceremony. That would begin an association that soon will mark its 40th anniversary. Latin America was the early focus of the NRECA-USAID partnership under their Alliance for Progress which had been announced by President Kennedy.
Over the course of my own career at USAID which began in Latin America, I have had many opportunities to observe the important work NRECA performs internationally and to see first-hand the impact this has had on many people's lives.
I recall visiting in the mid-1960s what continues today to be a highly successful electric cooperative in Santa Cruz, Bolivia. Santa Cruz was then a small town located in the tropical lowlands of Bolivia, a farming community. Today, Santa Cruz is one of the largest cities in the country. It is a major agricultural production and food processing center, and the power requirements of the city and surrounding country-side are being well served by the cooperative.
A couple of years later, when I was serving in Chile, I was invited to the southern part of the country, also an important agricultural region, to pull a switch energizing the 1000th kilometer of distribution lines constructed by the local electric cooperative. It was an important moment because it demonstrated the strength of the cooperative which was a direct product of the support of its members, farmers who understood the importance of electrification to their ability to increase efficiency and productivity.
Then many years later, I was put in charge of the USAID office in the Philippines where there was a program already underway to support the creation and growth of a countrywide rural electric cooperative system. USAID contracts with NRECA had made possible the provision of long-term advisors drawn from U.S. cooperatives who worked with their Filipino counterparts to establish the system. USAID provided loans to finance capital investments in distribution lines, equipment, and training. More than 125 electric cooperatives were established and today they provide electricity to millions of rural Filipinos.
There are many other success stories as well, and I will not go through these one by one, but I should mention one more and that is the very successful NRECA program in Bangladesh. This is a long-term effort to establish rural electric cooperatives there. This program has been one of the most successful experiences in rural electrification in the developing world, having established over 45 rural electric cooperatives and connected more than 1.3 million households to the power grid. The most recent project phases have focused on overall operational efficiency issues, including administrative and technical efficiency needs. NRECA advisors have assisted with the procurement of more than $750 million in equipment and provided training for several thousand participants. NRECA participation, financed by USAID, was key to encouraging other international development institutions, particularly the World Bank, to provide the long-term financing necessary to cover capital costs.
Often as proposed rural electrification programs were under consideration in the Agency, objections would be raised by some because it was difficult to calculate in economic terms, sufficient benefits from the proposed investments. I can understand this because in poor countries it could not be expected that small farmers would immediately invest in equipment to enhance productivity. They were too poor. For the most part, to them having electricity meant having an electric light in the house and power for a transistor radio. But there are other important but hard to resolve benefits; the creation of a greater sense of well being, a sense that rural areas were not so isolated and left out of the mainstream, and this is important to making people feel that progress is being made. Electricity lights the town streets which have been dark, and lights the local school which enabled the building to be used for other purposes in support of community activities. It encourages small business owners to purchase machines to increase productivity and quality. Perhaps rural electrification did not produce immediate broad-based economic benefits, but without it, rural development would be slow and difficult.
All this would not have been possible without the NRECA specialists whose expertise in rural electrification is matched by their sense of cooperative and international good will. The NRECA International Foundation sent some two dozen cooperative volunteers on international assignments last year. It was NRECA volunteers who played critical roles in responding to the emergency situation in the Dominican Republic brought about by Hurricane Georges. With the help of volunteers, electricity was restored in several towns and more than 18,000 people benefited. The repaired system is more hurricane resistant and two new electric cooperatives were established in the process.
Now, I would like to talk for a moment about the U.S. economic assistance program and how our energy priorities fit into it.
As you can well imagine, the events of September 11th have had a major impact on the work of USAID. For a number of years, the American people, through USAID have supplied much of the emergency humanitarian food that has gone to feed the Afghan people -- including those who live in refugee camps in neighboring Pakistan. In doing so, we helped avert what many feared could become a famine this winter. In the year prior to September 11th, we provided $174 million in food aid for Afghanistan, all of it channeled through non-governmental organizations working directly with recipients. Now that the Taliban has been swept from power and a new Interim Authority established, we are already starting to help Afghans rebuild their lives and their communities. While we will continue to furnish emergency food aid, our development assistance will go to revitalizing the country's agriculture; immunizing children and helping people regain their health; reviving education, especially for girls who were denied the right to attend school after the Taliban came to power; and supporting the new government and its institutions. We also want to help the country's women as much as possible, given the intolerable way they were treated under the Taliban.
Helping Afghanistan get back on its feet will take many years and many resources -- from the United States as well as from every other nation capable of assisting. Our country is committed to doing our part, as President Bush, Secretary of State Colin Powell, and our own Administrator, Andrew Natsios, have made very clear. But we are just at the beginning. The fighting is still under way.
One thing is clear, however. The countries of South and Central Asia have taken on new importance in the wake of September 11th and USAID is determined to do its best to help the countries in this vital region. We recently reopened our mission in Afghanistan, which was forced to close when the Soviets invaded in 1979. We are also reopening our USAID mission in Pakistan and strengthening our democracy and governance programs in a number of countries in the region.
In addition to our focus on Afghanistan and Central and Southern Asia, we will continue to devote considerable attention to Africa as well as other parts of Asia, Latin America and the Caribbean. Our programs over the next few years will give priority to promoting democracy and good governance; fighting the HIV/AIDS pandemic and other infectious diseases; encouraging the growth of agriculture and trade; and providing emergency humanitarian assistance wherever it is needed.
With respect to our energy program we are focused on two areas:
We assist developing countries to put in place market-oriented policies and effective institutions to support private energy and environmental initiatives; and
We promote the adoption of clean, innovative energy and environmental technologies.
Improvements in energy efficiency generate positive benefit for the economics of developing countries. One megawatt of power saved through energy efficiency can release enough energy to provide daily electrical service to 5,000 rural customers. This helps the typical farmer in a developing country who otherwise spends over 1000 hours per year hauling water for irrigation. If there is electricity to support pumps for irrigation, farmers can devote more time to tending crops -- studies show that electrifying the irrigation process leads to a four-fold increase in crop related income.
At the heart of USAID's strategy is the reform of legislative and regulatory policies and institutions to allow for private sector participation in electric power development and to open markets for renewable energy, energy efficiency, and clean-energy technologies. Creating opportunities to catalyze private investment is the only way to generate the more than $100 billion a year needed over the next decade to build electricity generation capacity in developing countries.
As we move toward the future, we are looking to organizations such as NRECA to help in the effort to provide power for productive uses in rural regions. New technologies and the trend toward decentralized government now provide opportunities to make better use of community-based energy systems. Increasingly, we will be looking to renewable energy sources -- solar power, run-of-the-river hydropower, biomass and wind power -- for the benefits that they bring.
USAID has long valued its relationship with NRECA, and we continue to fund your activities in Guatemala, Nicaragua, Bolivia, the Dominican Republic, India and the Philippines through our Cooperative Development Program. This supports NRECA's efforts to develop alliances with international financial organizations and independent power producers.
We are also working with NRECA -- through our mission in India -- on a $11.5 million program to support energy efficiency. We have a $3.7 million program with NRECA and the U.N. Food and Agriculture Organization to strengthen rural cooperative management, financial and operating capabilities; to establish electric cooperative development programs in Peru and Kyrgyzstan; and to sustain rural cooperatives in Bangladesh and India. Another program with NRECA and the FAO supports cooperatives in the Philippines and eleven Latin American and Caribbean nations.
All in all, USAID and NRECA have had a long and productive relationship bringing electricity to the rural regions of the developing world. Our cooperation has brought tangible benefits to millions of people, and in that we can all feel a great deal of pride.
So let me just say in conclusion how grateful I am to NRECA for inviting me here and giving me the opportunity to address this conference on behalf of the U.S. Agency for International Development.
Thank you.
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Last Updated on: January 02, 2009 |
