Remarks to CCAA's 35th Annual Conference on the Caribbean and Central America
Acting Assistant Secretary, Bureau of Western Hemisphere Affairs
As Prepared for Delivery
Thank you for your warm welcome. It’s an honor to join you at the start of the Caribbean-Central American Action's (CCAA) 35th annual conference. And it is so fitting that you are meeting here in New Orleans. This great port and trading center is a vital link between the United States and Latin America and the Caribbean—as it has been for two centuries.
I know the CCAA is pursuing a very constructive and positive agenda with Central America and the Caribbean. I smiled the other day when I was reacquainting myself with your mission statement. That was because your focus—on integration, education, sharing best practices, and institution-building—is so similar to ours.
So, this is a very welcome occasion to speak, from a common base of understanding. We are building robust new partnerships to support what Central American and Caribbean governments and societies are doing to address their many challenges, and to take advantage of promising new growth opportunities.
But first, it is useful to highlight our larger perspective on the Americas. I have worked on Western Hemisphere policy at the State Department for over a quarter century. (I started very young!) This time span has been a remarkable period of positive change throughout the Americas—change within countries, change in how they relate to each other, change in how they connect to the rest of the world, and change in how we interact with them.
We have all seen how increasingly democratic societies have emerged from a very different past, how economies have opened and then grown, and how trade has burgeoned. Millions of people in Latin America and the Caribbean are rising from poverty and joining the global middle class. Civil conflict has abated. And all of these trends are related and mutually reinforcing. This Hemisphere has demonstrated—first to Eastern Europe, and now to the Arab Spring—the power of open political and economic systems to address their peoples’ social needs and expand their opportunities. And, as Secretary Clinton has said, “Changes like what we have seen in terms of economic opportunity and democratic reform do not happen by accident . . . they happen when people decide that they want those opportunities and changes for themselves, and leaders are prepared to lead.”
To fully appreciate the moment, you have to zoom out a little more. Note that all this has taken place against a broader backdrop of major geopolitical and global economic change. Today, two thirds of global economic growth comes not from the developed world, but from the emerging countries. America’s well-being depends first and foremost on sound policies at home. But increasingly, it depends too on our ability to engage and lead on a very different international landscape from what we have been used to.
That new landscape, for us, begins here in the Americas, and there is a lot about it that is very encouraging. When we say the Western Hemisphere is vital to our national interests, it is a pragmatic recognition that this Hemisphere has long been a major market for us and is increasingly a platform for our shared competitiveness and success in an integrating world.
But the picture isn’t uniformly rosy. In many parts of the hemisphere, old patterns of inequality persist. Institutions of governance haven’t always kept pace with new needs. Many education systems aren’t equipping people with the skills they need to thrive in the 21st century. I emphasize this point, because it is so critical to any nation’s success—the “inequality” we must tackle is inequality of education. All of you who do business in the region will appreciate this immediately.
This is definitely a case where the government doesn't have all the answers. Right now, forward thinkers in the private sector have an opportunity to shape the profile of the next generation's work force. When President Obama visited Latin America last March, he talked about the importance of education in keeping the Americas globally competitive. He called on the private sector to support “100,000 Strong in the Americas,” a goal to increase the number of U.S. students studying in Latin America and the Caribbean to 100,000, and vice versa. Many of you in this room studied abroad at some point, so you know the value of these exchanges. Private donors have a potentially enormous role to play through direct contributions to colleges, universities, study abroad programs, and school systems to expand international study—in ways that advance the public good and simultaneously serve their own interests.
Geography—specifically proximity to major markets and trading nations—is key to the great economic potential of Central America and the Caribbean. Our trade agreements and preferences have dramatically expanded that potential.
This region has large youth demographics that can be a source of huge creativity and energy, but if there are no legitimate and rewarding ways to make a living and provide for their families, they become easy prey for transnational criminal enterprises. This is why we are partnering with governments, other hemispheric institutions, and the private sector to create more and better economic opportunities in the region, and focus on education and training, particularly groups that have traditionally been marginalized, including women, indigenous peoples, Afro-descendants, and others.
One way we are doing this is through the Pathways to Prosperity in the Americas initiative. This is a rapidly growing network of partnerships involving 15 countries throughout the region. Together, we are identifying the best policies and programs to empower small businesses, help them access local and international markets, build a modern workforce and protect the environment. We are collaborating on everything from innovative microfinance methods and teaching entrepreneurship to making the Internet more accessible remote rural areas.
The Caribbean has unique development challenges. Too many of its countries have been historically dependent either on tourism or single-crop agricultural exports. Their future prosperity and stability hinges diversifying and promoting new forms of entrepreneurship. Secretary Clinton has pioneered efforts to advance our work with the Caribbean diaspora community in more productive ways, and we are working with the Inter-American Development Bank (IDB) and other partners to secure grants for diaspora entrepreneurs seeking to launch new businesses in the region through the Caribbean Idea Marketplace program. We were so pleased that a group of Caribbean women business leaders joined us in Santo Domingo to participate in the President’s Pathways to Prosperity Women’s Entrepreneurship Netowrk discussion. We see them and the women they represent as a promising group to spur private sector growth in the region. More needs to be done, however, and we urge U.S. businesses to think creatively about investment and engagement in the Caribbean.
Last month we were able to conclude a ground-breaking Partnership for Growth (PFG) agreement and action plan with El Salvador. Our bilateral collaboration to identify El Salvador’s binding constraints to economic development – in this case, the prevalence of violent crime and lack of competitiveness in tradable goods – prepares the way for a series of joint actions that should help the country accelerate its economic progress.
Congress’ recent approval of the Colombia and Panama Trade Promotion Agreements was a landmark achievement that will further spur growth. We have also been negotiating an updated trade and investment framework agreement (TIFA) with CARICOM to deepen our economic ties there. Such an agreement would send the private sector a clear signal about those governments’ commitment to welcoming new investment that will power development. We are down to the very last issues, and all of us need to push to power it across the finish line.
Let me turn briefly to a subject of enormous import throughout the Hemisphere, and that’s energy. Whether we talk about energy security, energy poverty, whether fossil fuels or renewable energy, the opportunities for leadership and self-sufficiency in energy in this Hemisphere are within our grasp—but much less certain for the countries highlighted in this conference. Thus we need to work all the harder to get there.
Central America has made great strides in connecting its national electricity grids through a separate sub-regional network that has the potential to reduce costly power disruptions and lower prices. The U.S. has supported this effort all along the way, including through the Energy and Climate Partnership of the Americas (ECPA). The final steps –regulatory and pricing agreements – are proving the hardest part. It is important that governments and businesses put the public good over private interests if they want to finish this important job.
For the same reasons – to promote economic development and incentivize renewal energy – the U.S. has also been supporting electrical interconnections in the Caribbean, also through ECPA. Caribbean countries face some of the highest energy prices in the world. This is a huge drag on growth. But they also have attractive options for generating clean energy, from massive new wind farms in the Dominican Republic to terrific potential for geo-thermal power in St. Kitts and Nevis. Integration of markets, like that under study for St. Kitts and Nevis with Puerto Rico and the Dominican Republic, creates the economies of scale you need for projects like these to reach their full potential. The stakes are higher here because the cost of the undersea infrastructure necessary to link the islands is so much greater, but the underlying political challenge is similar and the United States is committed to helping move this process forward to make it a reality.
I talked about geography as an asset. But it is also a source of extreme vulnerability. Central America and the Caribbean lie in between major drug producing centers in South America and major drug consuming centers in North America. 95 percent of the illicit drugs entering North America from South America transit Central America. Transnational criminal cartels, often in league with extremely violent local gangs, have overwhelmed ill-equipped and under-resourced institutions. The cartels sow insecurity, undermine sovereignty, and impede the economic growth and integration indispensable to nations’ competitiveness.
In the face of this threat, it is tempting to retreat behind high walls and hire private security guards, and often there’s a perception that the well-off suffer the most in security costs, threat of kidnappings or foregone investment. But in fact, it is the poor and middle class that suffer the most from these levels of institutional failure because they have no recourse; they have no protection if government institutions don’t protect the most vulnerable. National leaders in both the public and private sectors are realizing that they must take decisive action. This includes better fiscal policies to generate resources for their own security and development.
We know that demand for drugs in our society is a huge part of the problem, and if shared responsibility is to mean anything, we have a particular and urgent responsibility to address that. But the societies of the Caribbean and Central America are the ultimate protagonists in determining their nations’ future. And the United States, as well as many other international partners, will be there to support them.
We are doing this through unprecedented collaboration with Central American governments, and other countries and international organizations, in our Central American security partnership. We are working closely with SICA on the regional security strategy in Central America which prioritizes allocation of national funds and can have a concrete impact starting at the near term. We are also launching new initiatives—as you’ll hear from my USAID colleague Mark Feierstein tomorrow—which leverage private sector financial support and insist on counterpart government sustainability plans as we focus particularly on the urgent task of bolstering critical rule of law institutions.
The Caribbean Basin Security Initiative, to which the President committed us in 2009, provides a new framework for cooperation between the U.S. and Caribbean States. It is truly a shared agenda, developed together, that recognizes that law enforcement alone isn’t the answer to today’s security problems. Just a few weeks ago Homeland Security Secretary Napolitano and I met with Caribbean counterparts in Nassau to help set CBSI’s forward course.
Next April, Colombia will host the sixth Summit of the Americas. This will be a chance for the hemisphere to highlight some very positive success stories. And, where that success has not yet materialized, it will be a chance to show the remarkable way countries are coming together in pursuit of common goals.
The Summit is, in a way, the apex of a trend toward coming together in the Americas. Evidence of that trend is all around us: in new patterns of trade and investment with and among our FTA partners, new forms of security partnership in Central America and the Caribbean, and new initiatives for infrastructure coordination in South America.
This is an open ended process. We look forward to working with partners in the region to find new and innovative ways to build on what we have accomplished so far. We look forward to finding new ways to partner with civil society, small business innovators, CEOs, and academic leaders, to generate new cooperation that produces real, concrete results for the people of the Americas.
The challenges before us are daunting, but I am very encouraged by the growing will on the part of governments and societies in Central America and the Caribbean to move forward. I am also encouraged by the commitment and understanding our political leadership, in the Administration and Congress, is showing for our support of these efforts. Just as vital is your responsibility, as business leaders. You have a unique ability to help drive growth and opportunity. I have mentioned what might sound like a dizzying array of programs and initiatives. Really, they are just the tip of the iceberg of our engagement in Central America and the Caribbean. But they all have something in common. And that is the indispensable role the private sector, here and there, has in their ultimate success.
Together, we have an opportunity now to lay enduring foundations for a successful and stable future in some of our closest neighbors. It will be the work of a generation, but I can think of no more worthy enterprise.