ASSISTANT SECRETARY VALENZUELA:
Thanks very much, Bill.
I appreciate that very much and also I’m very pleased to be here with Ambassador Negroponte and I want to salute Susan Segal for her leadership and Eric Farnsworth for his terrific leadership here in Washington as well. And a salute, too, to David Rockefeller for his extraordinary commitment and efforts on behalf of the hemisphere going way, way back and we really appreciate his commitment and his focus and his attention, I think, has been an extraordinary chapter in the relationship between the United States and Latin America, all of the things that he has done.
Also, I want to congratulate the Council on 40 years of activities here in Washington. I understand that you were created five years earlier. So you’re about 45. But 40 of those years you actually have spent some time here in Washington and that’s very good for – that kind of dates me, too, because it was 40 years ago that I began teaching at Duke University on Latin American politics.
So, in some ways, I’ve also seen, with the elders of you here in the Council of the Americas, the extraordinary changes that have taken place in the hemisphere over this period of time. Let’s not forget, it’s probably a good idea to remember this that – let’s not even go back 40 years. Twenty-five years is always a good – a quarter century is one of those good times to sort of take stock of where we are. And if we go back a quarter of a century, we have to remember that the picture in the hemisphere was a very, very different one. Countries were only beginning to come out of a long period of authoritarian rule where only three countries in the Americas, in South America and Central America, the Caribbean – forget the Caribbean – strike the Caribbeans. Central America, South America avoided the authoritarian rule of that era. And in some cases there were long periods of authoritarian rule. And it was also, in the 1980s that we were still observing the civil conflicts in Central America with the devastating civil conflicts.
In particular, I think of the numbers of people in a place like Guatemala, who had lost their lives over a period of – starting back in 1954. So this was an era that was not particularly solicitous. If we add to that period of authoritarianism and open conflict in Central America, what came to be known – and many of you remember this – the lost decade, the difficult decade, the decade of indebtedness, debt crisis, which marked, actually, the exhaustion of the import substitution industrialization model which had been implemented after World War I and which were perfected during a period of time and which worked for many countries during a period from about the 1940s until about the 1970s, but simply was not able to respond to increased globalization. You had this sort of a protectionist model, an inward autarchic kind of model in many countries. It just simply did not serve societies well. And it’s for that reason, if you remember well, it kind of – the countries of Latin America invented stagflation, high-levels of inflation, with low levels of growth, particularly in that era.
Well, if we fast-forward 25 years later, we see that that situation has changed remarkably. Latin America has now gone through the longest period of constitutional rule that the Western Hemisphere has had since independence – Huntington’s famous “Third Wave.” And it’s really been quite remarkable how in country after country we have now presidents who have been succeeded in office by their elected successors. So that provides us with a very different perspective.
And then secondly, we have to also point to the fact that the reforms – the difficult reforms that were enacted in the 1990s – the so-called first generation reforms, fiscal reforms, and also the structural adjustment reforms of the 1990s, did have a significant effect. And today we are in the face of a significant and challenging international financial crisis and the commentators all over the hemisphere are saying the Western Hemisphere is doing much better. Or the countries of Latin America that used to get pneumonia when the United States got a cold and, in fact, in this particular era, because of some of the really sound policies that were enacted previously, are now facing a different sort of reality. So this then does give us a different hemisphere to work with. And the response of the United States, the policy of the Obama Administration, is then to engage on a different kind of level than what we might have engaged on in the past.
And I think I’m going to have to bring my remarks to a close and I’ll continue with you later on, because I have a feeling that – is the Secretary coming now? The Secretary’s coming now. So I will then cede to her.
I’m so delighted see so many foreign ministers and members of the diplomatic community here today as well as so many friends. And I look forward to having a chance to be able to talk to each and every one you later on. And what I’ll do is come back and finish a few of my own thoughts on this after the Secretary speaks and then maybe we can open up to some questions. So we’ll have kind of a tandem approach to this discussion.
(Pause for Secretary Clinton’s Remarks)ASSISTANT SECRETARY VALENZUELA:
Well, I think this may work fairly well. The Secretary has articulated the broad vision of U.S. policy toward the Western Hemisphere. Let me just round out a few of these thoughts and then I’ll just open it up to questions.
Let me just start again by repeating what she said at the beginning. It used to be that we said it was trade, not aid. There’s absolutely no question that we need to focus on trade. And we all know that trade lifts all boats and that trade is absolutely critical in a globalized world. What we need is to encourage trade, to lower barriers, and continue in that direction. So it’s trade, not aid. Although if there’s a narrative now that’s different from the narrative before when we said trade, not aid, it’s that trade in itself is not enough. We need to understand that that is simply not the magic bullet.
There was a time, when I first came to Washington in the sort of mid-‘80s, the view was that if you simply did the first generation and second generation economic reforms, that somehow that would automatically lead to a whole host of other good things, including the strengthening of democratic institutions and that sort of thing. And I think that we realize now that that somewhat simplistic economic determinism is just simply not valid. What is required today is to think about how we also need to improve competitiveness. And this is the great, great challenge that all countries in the Western Hemisphere have, including our own – how do we remain competitive in a globalized economy?
And competiveness, we’ve come to understand, requires far more investment and infrastructure within countries. It involves certainly far more investment in people, human capital being such a critical issue, education, and various things like that. And we’ve also come to realize, I think, that what is required also are strong institutions; that in order to be able to do the infrastructural development or to invest in people in societies that remain extremely unequal, where there are significant levels of poverty still, we need to have stronger institutions. And so the focus now is on how to strengthen institutions of governance in societies where we’re still working with the process of consolidating these kinds of institutions.
And this requires, then, from the point of view of U.S. foreign policy, a far more different dynamic, a different narrative than the narrative that we had in the past. And that’s a narrative where we don’t go back to the notion that we have to go back to some of the aid principles that we had before. That’s also a nonstarter. So that is just simply not a direction that we want to go. What we want to do is to strengthen dynamic partnerships. And dynamic partnerships mean partnerships not only among countries, not only multilaterally, but also through dynamic private-public partnerships. And this is, of course, where you can play a key role.
And let me, if I might, just remind you of the four baskets that the Secretary referred to as the key baskets that we’re looking at. They’re not the only ones, but to conceptualize our strategy, we want to focus on four critical baskets. The first has to do with prosperity, social inclusion – that’s where trade comes in, that’s where increasing competitiveness comes in. That’s an extremely important objective. And we have a series of different initiatives that we’re working on in that regard, such as Pathways to Prosperity, for example, or the Inter-American Social Protection Network.
The second piece is absolutely critical, and that has to do with public insecurity. If you do surveys in any country of Latin America, you’ll find out that the thing that most concerns the average citizen everywhere, but also concerns more and more investors that are looking at investing in various countries, is the question of public insecurity. And this is a huge challenge that we all face as criminal organizations, drug trafficking organizations, and just simply common crime increases in all of our cities across the hemisphere.
The third component that she touched on is energy and climate change and what – how can we have more effective strategies to address these sorts of issues. The critical questions for all countries is not only the supply of energy, the capacity to have energy, but also how do we find alternative energies and how do we have a sustainability moving forward.
And then finally, the last category is one I referred to earlier, and that is the strengthening of institutions. And this is not where we come in and dictate what needs to be done. And in fact, the role of the United States on any of these things is not coming in and dictating. But how do we find ways in which we can strengthen these institutions, perhaps working with not only a bilateral focus in some cases but also a multilateral focus, how we might, for example, work trilaterally? And in fact, with a couple of the countries the United States has now signed trilateral agreements of cooperation where we work together with other countries to invest in third countries in areas where we might have some comparative advantages to do that.
Let me say – let me put this strategy in a different way. And I’d like to say that we want to avoid a focus that could be characterized as myopic unilateralism. We can’t just look at countries in the Americas and just simply have a bilateral foreign relationship to each country. What are our aid packages for countries? What is our bilateral relationship? We need to understand that that’s just simply not where we need to go in a highly diversified and increasingly integrated world.
In turn, it means that we also cannot afford to have rigid multilateralism. We need to have a much more dynamic multilateralism. And the dynamic multilateralism has to be based on three fundamental concepts, in my view. The first is that in the Western Hemisphere we need to understand that there are sub-regions of the Western Hemisphere, that it’s simply not appropriate to have a narrative that argues that the countries of the Western Hemisphere are all the same; that in fact, if you have challenges of poverty and inequality or if you have some of the other things that we described, they cluster in different ways, and that the challenges in different countries may be different.
And in fact, there may be a logic to having more sub-regional approaches. And this is when the Secretary referred, for example, to my recent meeting in Panama with the SICA countries. Sistema de la Integración Centroamericana refers, of course, to our effort to work with the Central American countries on CARSI, the Central American Regional Security Initiative. That is an appropriate focus. There could very well be other foci that involve sub-regional efforts on climate change, on energy.
Now, that does not mean that we disdain broad multilateralism, and the Organization of American States remains the key and is the single-most important multilateral institutions of the Americas. That is the repository for treaties. It’s the dynamic organization that we need to work together to strengthen and to improve as we move ahead in order to be able to respond to many of the challenges in the region.
But working say, for example, on something like the Inter-American Social Protection Network, we might focus on specific sub-regions. There are three things that we need to do, in other words, in our approach, is to have a dynamic multilateralism that focuses on the different kinds of situations that present themselves in sub-regions; that whatever work we do in a multilateral context has to be done, and in our relationships with Latin America even bilaterally, has to be done on the basis of mutual respect – mutual respect will be the second theme; and then, finally, thirdly – something that the Secretary clearly alluded to – there has to be co-responsibility. There has to be co-responsibility.
Now, the Secretary got a tremendous amount of press when she mentioned the issue of co-responsibility in referring to the problems that we face with regard to cooperation on the counterdrug issues with Mexico when she went down to Mexico. I have certainly repeated this in my conversations with our Central American colleagues. The United States needs to work on issues of public insecurity because of our co-responsibility with the problem as a country that is a demand country, as well as because of the transfers of small arms southwards, money laundering issues of transfers of money, et cetera. So there has to be a co-responsibility.
But there’s another co-responsibility as well, and I’ll just kind of finish with this because the Secretary underscored it so strongly. And that is it’s just simply not tenable anymore to have a conversation that is a conversation based on respect, on sharing of best practices, on looking how we can become more dynamic as societies, if, in fact, some societies are not willing to make the key reforms that are necessary in order to bring their own resources to address some of these problems. And by bringing their own resources, it’s not just simply about more taxation. It’s also about strengthening institutions, particularly the rule of law, particularly strengthening governance institutions.
We know that 17 presidents haven’t finished their term of office during this period despite the fact that we’re still, compared with previous periods, far better off than they were before. We’re not talking about authoritarianism. But these 17 presidents have not finished their terms of office because of continuous problems with governance, with weakness of institutions and that kind of thing. And those are issues that have to be addressed internally, but there are ways in which we might cooperate together in an atmosphere and a spirit of mutual respect in order to try to address them.
When I say this, it reminds me so much of some of the narrative that was out there during the period of the Alliance for Progress. Remember one of the fundamental premises of the Alliance for Progress was that there had to be commitments of capital (inaudible), there had to be commitments in attempting to change certain kinds of rules and regulations, but there also had to be fundamental reforms. And these reforms are needed in each of these countries in order to be able to achieve the levels of competitiveness that we all know are fundamental for the Western Hemisphere countries to be successful moving ahead.
So I’ll leave you with just those thoughts. And if we have five minutes, maybe I’ll answer a couple questions. (Applause.)MODERATOR:
We are running a bit late on time, but we probably have time for one question or perhaps two quick ones. So please identify yourself – ASSISTANT SECRETARY VALENZUELA:
Do two questions and then I’ll take both of them.MODERATOR:
Okay, that’s fair. So Arturo has asked for – the Assistant Secretary has asked for two questions sequentially; he’ll take them both at the same time if there are two questions. Please identify yourself. There are microphones at the table. There are also standup mikes at the back of the room, if you would prefer to use those. ASSISTANT SECRETARY VALENZUELA:
Well, I see that I’ve satisfied all your -- QUESTION:
(Laughter.)ASSISTANT SECRETARY VALENZUELA:
What I think is that like other countries which have faced – they face challenges. They face opportunities and they also face challenges. And that’s all I want to say about that. (Laughter.)
Well, thank you very, very much. Appreciate it. (Applause.)