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Peter F. Romero Assistant Secretary of State for Western Hemisphere Affairs Keynote Address The Almas Temple Washington, DC, September 22, 2000

Educational, Business, and Government Alliances: Partnerships
for the Education of Future Global Business Leaders

I am pleased to be with you today. I feel among kindred spirits. It is good to be with people who understand the importance of the role of international business education -- of the need to prepare people in the business sector of both our economy and those of other nations in the world to take advantage of the tremendous potential of this era of globalization.

I believe strongly that international education contributes directly to the strength and vitality of this country.

Business education -- our topic for today -- is only one of many areas in which we need international education to prepare people to deal intelligently in this fast-paced, ever-smaller world.

Let me start by telling you about some of the recent initiatives undertaken by the U.S. Government. As you know, in April, President Clinton issued a directive setting forth a comprehensive policy to support international education. He pointed out that to continue to compete successfully in the global economy, the United States needs to ensure that its citizens develop a broad understanding of the world, proficiency in other languages, and knowledge of other cultures. He also pointed to the importance of attracting to study in the U.S. foreign students who will guide the political, cultural, and economic development of their countries in the future. I see here an opportunity for government and the private sector to cooperate to advance our common interest in international education.

In his directive, the President charged the State Department and the Department of Education to renew efforts to promote increased international education. At present, some 114,000 American students are studying abroad, and nearly 500,000 foreign exchange students are studying at American colleges and universities. Many of those foreign students obtained information on courses of study available in the U.S. through the 450 State Department-supported educational information centers spread throughout the world. Those centers answered inquiries from over five million people in the last year. They provided information on U.S. institutions, counseling on study options, assistance with applications and financial aid options, standardized testing, and even pre-departure orientation on living and studying in the U.S. We are now bolstering even further our capacity to reach prospective students.

Our departments are also taking steps to increase support for the exchange of teachers and scholars and of citizens not involved in formal study -- at all levels of society. We are especially looking at ways to strengthen and expand cross-national partnerships among educational institutions and to foster the use of communications technology to bolster international education.

The President's directive specifically calls on the State Department to ensure that international educational exchange programs, including the Fulbright program, receive the support they need. We will, of course, do all we possibly can; but, to be successful, we must have the help of people like yourselves to make clear to Congress the need for adequate funding for such programs.

In June of this year, we invited various members of the business community, along with diplomats and representatives from international organizations, to the State Department to brief them on the Presidential policy directive and to hear from them what they felt we might do to support it. November 13-17, during International Education Week, there will be more opportunities for dialogue. If you would like to become involved in future meetings concerning international education, please let us know.

Today, I want to focus with you on the importance -- from a foreign policy perspective -- of international business education. I am continually struck with how crucial it is, in today's world, for countries to have business people trained to think and to operate globally.

Let me state clearly my thesis: international education, especially in business, helps make us a stronger country. We are doing a lot to promote exchange, but I believe we are not doing enough, especially in the creative use of internships and non-traditional study programs.

The United States needs to understand the world, if we are to remain competitive. In the U.S., trade accounts for more than twice as much of our economic activity as it did a quarter century ago, now more than 25% of our total GNP. It has fueled the remarkable period of sustained economic growth we have enjoyed over recent years. Trade-related commerce has created hundreds of thousands of new jobs -- good jobs, adding to our standard of living and to the tax base funding the public goods and services that contribute to our quality of life. The continued growth of the economy depends greatly on our ability to expand our participation in international trade.

But besides aiding our competitiveness in the world economy, I think international education helps the United States present and demonstrate its values to the rest of the world. To adapt a concept from geopolitics, I would call this "forward projection."

We need education in how to conduct business in the international arena both for young people preparing for careers in business and for those business people just starting to explore the possibilities of marketing and partnering abroad. Other countries need the same and we should assist their efforts because it is in all our interests.

The United States benefits from the economic well-being of our trading partners. Some wrongly think that competition in the global market place is a zero-sum game. For us, however, open, prosperous trading partners best serve the United States overall.

Second, and perhaps most important, we know that economic well-being leads to increased stability and desire for democracy -- and, therefore, a more peaceful world for us. According to Harvard economist Robert Barro, non-democratic countries that have achieved high standards of living tend to become more democratic over time. Examples include South Korea, Taiwan, Spain, and Portugal. Conversely, citizens of democratic countries with low standards of living tend to lose political rights over time. Barro warns us that democracy and economic development need to go hand-in-hand.

In this era of globalization, it is important that those in business understand the prerequisites for a country to successfully participate in the global market place: This in order to not only make a sound investment abroad but to leverage that investment as an instrument for the so-called "second generation" of structural reforms, to fight corruption, inefficiency, excessive regulation, etc. and promote efficiency, transparency, and the rule of law. I would hope that all of you, whether operating in the private sectors or the burgeoning NGO communities abroad, see yourselves for who you are -- representatives of the U.S. values of good governance that we hold dear. Specifically, efficient and transparent financial regulations to attract and keep investment, a trustworthy legal system, modern and low-cost telecommunications, efficient and rapid customs procedures, and a healthy and educated workforce.

As a group, businesspeople can be influential advocates for change -- pressuring their governments to make the investments and policy changes to improve conditions for business. As the water rises, as reforms take hold, all the boats on the lake will float higher.

That thought leads me to what I know best, the Western Hemisphere. For much of the 20th century, Latin America was locked in a tumultuous cycle of dictators, civil strife, and economic instability. But in the 1980s, nation after nation -- inspired in large part by our own American experiment -- turned toward democracy. In 1981, 18 of the 33 nations in the hemisphere were under some form of authoritarian rule. By the beginning of the 1990s all but one -- Castro's Cuba -- had freely elected heads of state.

Good news indeed, but a number of the new Latin American democracies remain fragile. Although most of the governments have instigated market-based reforms, results take time to materialize and have not caught up with the "revolution of rising expectations" which came with democratic elections. In essence, as people become educated about the possibilities of freedom and prosperity, they become more, rather than less, dissatisfied with modest improvements. We need to help countries cut the lag time between needed reforms and the tangible benefits these bring to populations. Economic growth in Latin America in the 1990s has averaged about 1% per capita per year. About one-third of the Latin American population lives on $2 per day or less. More accelerated growth is needed to make a real impact on the lives of the poor and the middle class. Countries need to reach a level of growth that allows them to share prosperity broadly throughout society.

We, as a government must continue to conduct assistance and training programs to alleviate poverty and to accelerate development. We must work with developing countries to establish trade policies which foster their economic expansion -- and we see the Free Trade Area of the Americas, scheduled to be established by 2005, as just such an opportunity. However, we can do just so much. The real engine of growth must come from within each country, and where the business sector can and must play a significant role in the creation of the conditions for a robust economy.

And that brings me back to the importance of international business education. I'm not sure that the United States is really prepared to take advantage of all the opportunities that trade opening and regional integration will provide. As our trading partners become more competitive in the international arena, will we be able to keep up?

Businesspeople who have had their horizons broadened through international education will also be more adept at taking advantage of the vast and varied markets of globalization, thinking well beyond their local horizon. They will have learned how to plug into the fast-moving information flows now available to find potential business partners, funding for new ventures, and insight into what their competitors are doing. They will know how to maximize the comparative advantage their country's resources offer.

In the "new economy," national boundaries count for less. Winners will seek out opportunities everywhere; and that goes for medium-size and small business as well as large corporations -- for businesses in small towns in the middle of the country as well as for conglomerates based in New York.

I don't think we are doing an adequate job preparing ourselves to continue to exercise leadership and to compete internationally. Foreign students are clamoring to study in the United States and take part in fellowships and internships that will allow them to understand how the United States works. They will enrich their own countries with this knowledge and insight when they return home. I don't see American students pursuing these opportunities abroad with the same vigor.

Through internships and study programs, American students can gain valuable expertise in the business and culture of other countries. Internships need not be restricted to traditional areas; they can encompass business and industry, state and local government, in addition to traditional academic fields.

There are excellent programs which could serve as models for what more could be done. I am personally involved -- along with the Secretary of State of Florida, the very able Katherine Harris -- with helping to create an exchange program for outstanding university students in Florida and Argentina. Argentine and Florida authorities are close to final agreement on the program -- to be administered by the Fulbright Commission in Buenos Aires -- that will help prepare students for leadership in the areas of hemispheric business, finance, international law, communications, transport, applied technology, trade, and sustainable development.

The U.S.-Mexico Commission for Educational and Cultural Exchange -- the Fulbright Program -- started a binational business program for U.S. citizens 5 years ago which combines a six-course graduate certificate program with an internship within a Mexico-based company. This year, there are 12 Americans participating in the program.

The Commission also offers a program for Mexican students who wish to study business in the U.S. It offsets the cost of such programs of study to allow those who would have been able to fund their studies in Mexico -- but not in the U.S. -- to meet the cost of U.S. business schools. There are now nine Mexican students in the U.S. on the program.

Both that exchange program and the Mexican Commission's programs are possible because of the Department of State's Fulbright program -- along with the absolutely necessary collaboration of private business partners and cooperating universities. I hope we can put together many more such partnerships in the future. I don't see why we cannot together create thousands of similar opportunities throughout the hemisphere.

They are a model for what this conference is about -- Educational, Business, and Governmental Alliances for the Education of Future Global Business Leaders. I urge you to continue the valuable work you have thus far undertaken and to seek out new opportunities to expand overseas opportunities for American students. The United States will be richer for your efforts. Thank you.

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