Rice Witrh Committee on Democracy Promotion

Meeting With Members of the Advisory Committee on Democracy Promotion

Secretary Condoleezza Rice
Washington, DC
April 16, 2007

SECRETARY RICE: Well, thank you very much, Anne-Marie. Let me just thank all of you for the excellent work and let me acknowledge the presence of new members to this committee. Joshua Muravchik is here, Brian Atwood, and I know Craig Kennedy couldn't join us today, but thank you very much for joining this effort.

I think we've already gotten some outstanding recommendations and I know we're going to have a little bit of a discussion of democracy and development after I have initial comments about the recommendations. I see much here that can be supported right now.

Let me just start by saying, whenever somebody offers to go out and help build bipartisan support for a very crucial element of our policy like democracy, I'm there. So please consider that recommendation accepted. I think the committee can play a significant role. I believe that this is something that crosses party lines. When I think about the long history of support for democracy in Eastern Europe, support for democracy in Latin America, this is something that I think can bring us together on foreign policy goals and I just would ask you to do any and everything you can. And if you have recommendations for me on how I might participate in that more fully, I'm happy to do it because it's obviously something that undergirds American foreign policy and should undergird American foreign policy regardless of who's in the White House or where the Congress rests.

I will share with Karen Hughes the public diplomacy strategies idea. I know that she's been working very hard on this, but it's something, Anne-Marie, that perhaps a small group -- so the whole committee doesn't have to get together -- might want to sit down with Karen and her people to go over some of the discussion that you had about how to improve the public diplomacy side of this.

I think in particular broadening the understanding, as you put it, of what is necessary for successful democracy. When we turn to the discussion on democracy and development, I will be noting that we've been trying to send the message that it's not enough to have elections, although you have to have elections, and that accountability is critical. But once you have accountability, governments also have to be able to deliver for their people or you have the worst of all circumstances -- democratic governments that can't deliver -- and then fertile ground for antidemocratic movements to begin to come up. And so that's a piece of the public diplomacy message that I think we should look into and I'll maybe ask Paula to make sure that that Karen and her people have contact with at least some of you who were a part of those discussions.

I think the other recommendations are great. Obviously we're trying to work with multilateral organizations. I don't know if you -- I know that Steve Krasner came and talked to you about the Partnership for Democratic Governance which we are trying to work with UNDP and OECD. We think there's a good chance that that's going to get embedded. It's the sort of thing we'd like to do more. If we have an idea like that not to try to run it out of Washington, but rather to embed it in multilateral institutions and we should obviously do more of that.

I couldn't agree more that the ability to get other democracies to be really involved in democracy promotion -- interestingly, India of course was one of the first contributors to the UN Democracy Fund. We think that's a good step forward. We're doing some work with Brazil, another big democracy. You may have seen we're doing some work on strengthening institutions in Guinea-Bissau with Brazil. We think that's the sort of thing we can do with other countries.

We also are working very closely with some of the East Europeans who have a special affection for working on these issues of democracy. The Center for Democratic Transitions in Hungary has been a kind of focal point. The Hungarians have also been recently interested in the transition that will go on in Cuba. This is the kind of thing that I think we can do more and more with other democracies.

I agree completely on the support for indigenous movements and groups. And here I would note that, for instance, the MCC, when it works a compact insists that there be a civil society component to developing the compact and we can probably do more of that. But if I could just add to the kinds of indigenous groups that I think we need to look at. I've been struck by the problem of marginalized peoples in particularly Latin America, the indigenous populations in places like Guatemala, Bolivia. We had very interesting discussions when the President was in Latin America with a group of Afro-Colombians who are marginalized within their own society. I think Afro-Brazilians would feel marginalized within their own society. And these are governments that are trying to bring these people in and it's something that we ought to encourage. It's obviously the case also with Muslim populations in Europe.

One of the things that we have tried to do is to make our exchange programs, our work, for instance, to bring Fulbright or Marshall Fellows more inclusive. Because if you think about recruiting for those programs in the United States, in say 1950 or the beginning of the 1960s, you would not have gotten a very diverse population if you had used existing networks to recruit people to those programs. And so now as we look at places where the marginalization of those groups continues, if we're not careful our exchange programs will reflect that marginalization as the normal processes of recruitment and selection take place. And so we've been very attentive to those issues and I think it's something that fits into this question of what kinds of indigenous groups should we be actively engaging as we work on issues of democracy. Because obviously it's one thing to have a democracy, it's -- as we know in the United States, it's another thing to have a democracy in which people are still marginalized. So I would ask you actually to take a stronger look at that. It's something I'm personally very interested in and would ask you to look at that particular element.

Finally, very interesting points about what kinds of processes we might look at in other parts of the world and we'll certainly take a look and see if something can be done. So thank you very much for an excellent set of first recommendations. I appreciate very much that they are rolling recommendations because we feel some need to get started trying to put some of this and institutionalize it before our time is done here. And so doing this on a rolling basis, I think is a very good idea.

Thank you.

UNDER SECRETARY DOBRIANSKY: Thank you, Madame Secretary. I'm going to suggest that we move to our first topic on democracy and development. And if our Chair wouldn't mind -- I don't know if you'd like to say something just to kick that off and then we'll turn it to Mark Palmer to moderate the discussion. Would our Chair, Dean Slaughter, would you like to say something at this time

DEAN SLAUGHTER: I also want to thank Secretary Rice for her comments and particularly the point about marginalized groups, which I think is something we can look at. And that does, indeed, directly lead into democracy and development because one of the key values, or the ways in which the two can reinforce one another, is precisely to bring marginalized groups into the political life but also then, of course, the economic life of the nation.

More broadly, I think it's very important that democracy support, or support for groups who are trying to democratize, be seen in terms of making democracy deliver economically as well as politically. This is something we've talked about a great deal so that it is not viewed as sort of a set of values that does not directly relate to the concerns of the very poor in these countries. So in many ways, I think this is a theme that runs through many of our recommendations and a great place to start.

UNDER SECRETARY DOBRIANSKY: Thank you, Anne-Marie. Let me turn it over to Mark Palmer and if you'll turn your mike on, Mark, thank you.

MR. PALMER: I think my role is simply to turn it over to you, Madame Secretary -- (laughter) -- for your initial remarks.

SECRETARY RICE: Well, I'll be very brief. I've already said a couple of things about this. Obviously the first goal I think of our foreign policy is to develop a -- help a set of well-governed democratic states to develop around the world. Now that may surprise you a bit when I say I think that's the central goal. When we talk about transformational diplomacy, that's really what we mean. Now, why don't I say "war on terror" or whatever? It's because without well-governed democratic states, you're likely to have failed states or authoritarian states that are going to submerge but not deal with the unhealthy political forces that lead to extremism.

And I think we saw in the Middle East that you had a situation in which you had authoritarian states that were in a sense keeping a lid on this extremist expression. But politics was going on; it was just not going on in kind of healthy political channels, and as a result you were getting it in its most extreme form al-Qaida, which is produced from circumstances in which there is no legitimate role for political expression, and the healthy forces, more as we would call them moderate forces, were squeezed out of the political system because they had no place to express themselves.

If you think about Latin America, when you have well-governed democratic states, you don't have the same propensity to have kind of a negative populism rise, which then in itself becomes a threat. When you have well-governed democratic states in Africa, you don't have either failed states or states that can't control their borders, states that can't fight terrorists, states that can't deal with arms trafficking and with drug trafficking.

So if you think about many of the ills that we are trying to confront, if you have well-governed democratic states they will not be immune to these difficulties but they will be much more capable of actually producing a stable environment that is a truly stable environment, not one based on false stability. That's why when we talk about transformational diplomacy, that's what we talk about.

Now, what do we mean? Obviously, elections are important because if you don't have elections you have no way to express legitimately the will of the people. But you can't stop there. You then have to help them to go on to build institutions. I think we now have enough experience ranging from Bosnia through Afghanistan through Iraq through Liberia through Haiti of knowing that fundamentals like a justice system and a police system that's not corrupt are at the core of rule of law. And so helping to create institutions like that are very critical.

Also, helping to develop as rule of law develops an infrastructure, an economic infrastructure that will allow job growth through opening of trade like we've done with AGOA in Africa or with free trade agreements in Central America, or the desire to have more opening economies because open economies that can with firm rules attract foreign direct investment is going to be much better than anything you could ever do with foreign assistance in terms of job growth and the like.

But I think quite frankly, stopping there has gotten us into a bit of a rhetorical problem because if you're really only talking about job growth, trade, investment, you're not making the connection to the next level of development, which I'll call the kind of micro level of development, which is making sure that there's an educated population, making sure that there's a healthy population, making certain that the benefits of democracy are translating downward into the population so that when the next term for accountability comes, which is the next election, those young democracies are able to point to something that they have delivered. And if you noticed the President's recent trip to Latin America, he spent a good deal of time really talking about that link: making people's lives better, social justice, health for people, education for people. And the truth is the United States in our foreign assistance has been very actively engaged in all of those areas, but somehow the link wasn't being made in a way that was very clear.

So when we talk about well-governed democracies or helping to create a network of well-governed democracies, we're talking really about the link between democracy and development, development being broadly defined to mean that if we do our work well over time these countries really ought to be graduating from foreign assistance to being able to deliver for their own people.

I think it's very crucial because without well-governed democracies, without those well-governed democracies then being able to deliver for their people, you're not going to be able to sustain a momentum for democratic development. So with those comments, Mark, I'll --

MR. PALMER: That was really terrible, Madame Secretary. As a former speechwriter for Secretaries of State, you had no notes, you just spoke honestly to us. I was very impressed. Thank you.

Dean Slaughter, you're -- Anne-Marie, you're welcome to jump in at any point and the floor is open now for a discussion. Brian, our most expert person on this subject.

MR. ATWOOD: I'm not sure that's true. First of all, I have to say as I listen to you, Madame Secretary, that there's something that comes through that's very genuine, and that is that you and all of us around this table share basic American values about these issues, which is why all of this should be very much a bipartisan consensus. So I don't disagree with a word you said and I appreciate your deep knowledge of this subject matter.

When I started in this business of promoting democracy, gosh, 10, 20 years ago now, I used to get into arguments with people that it really didn't make any difference how poor your country was; you could still sustain a democracy with poverty because even illiterate people can vote and make decisions about their own well-being. And indeed, I believe that there is a real link between development and democracy that needs to be maintained; you really can't achieve full development unless you have democratic governance.

But I've come to believe too that poverty is a cancer that affects democracy as well as development and that it breaks down social cohesion. And indeed, I would even go so far as to say that when that social cohesion is broken down it contributes to violence, and it therefore is very, very dangerous. I'm not sure that our body politic has come to the realization that poverty is a real threat in national security terms and that we need to address it a lot more aggressively than we have. And what I was -- I served, as others perhaps around this table did, on a very important commission called Weak States and U.S. National Security. It's a bipartisan commission. And the belief there was that expenditures could be made to prevent crises, and even in states that weren't democratic you could work with groups within those states who were democratic to try to prevent the worst from happening, including a failed state situation, as we see in places like Somalia.

What I'm concerned about I think is that with limited resources -- and I must commend the Bush Administration for increasing -- I wish I had the AID budget when I was the head of AID that you have now. But I see more being spent on crisis than on prevention, and I still think we need to convince this Democratic Congress and the American people that we're making an investment in our own national security by dealing with poverty more directly. I also think that there are serious issues -- foreign aid can't do it all. As you've mentioned before, the best possibilities are when you have trade and investment in these countries. And we have finance policies that do not contribute to that. We have trade policies that subsidize our agricultural production that are undercutting development in these countries. And only when we see poverty as a threat to democracy around the world and development will we, it seems to me, come to grips with these really large policy issues that affect our ability to deal with poverty.

So thank you for your comments.

DEAN SLAUGHTER: Jennifer.

MS. WINDSOR: Thank you, Madame Secretary. First of all, I want to commend the creation of the Millennium Challenge Account, which I think was very important in reinforcing the connection between democracy and development, and the application of the criteria has been outstanding. We, of course, at Freedom House always want there to be even more strong criteria and we're going to continue to push for that.

I also want to talk about the FY08 budget request and to commend you in particular for the increase in democracy assistance in Africa, which was of particular concern, particularly in this -- the linkage between democracy and development, and the maintenance of the assistance levels for Latin America, particularly in the area of democracy and governance, because that region, while it's progressed beyond other regions, still has a lot to do. And I think you mentioned that.

I do want to say just a couple of things. One is as democracy -- as the Bureau of Democracy, Human Rights and Labor stands for the importance of democracy and human rights in U.S. foreign policy, and therefore its resource levels and staffing levels and prominence is a symbol of whatever administration's commitment, so too within USAID is the prominence given to the Democracy and Governance Office, what used to be the Democracy and Governance Center under the Clinton Administration. And it has been my concern for the last six years that that office has not gotten the resources and attention that it deserves. It is a group of people, one of whom is represented here today, whose job it is to figure out what works and what doesn't in democracy and governance promotion and to educate their colleagues in other development areas about the important linkages and interfacing.

So Brian mentioned that that office was put under the Bureau for Humanitarian Assistance, which is the crisis bureau. And as you know, when crises occur it drives out sort of longer-term issues, and I think that that is going to be at the peril of the ability of the U.S. foreign assistance apparatus to function. So I would just recommend that as the Director of Foreign Assistance Tobias looks into his reorganization that he really thinks about elevating the role of that office, not in any way undermining it further.

MR. PALMER: Cliff.

MR. MAY: Thank you. Thank you for your comments, Madame Secretary. Two quick points that I'd like to just raise. One is that while I think Brian is absolutely right that there's a fair bipartisan consensus in favor of the necessity of seeing democracy continue to expand its borders, I think there is a real danger that that bipartisan consensus in this country doesn't extend to a lot of our friends in Europe. Increasingly, what I think we hear from Europe is that democratization is a foolhardy American project with which we Europeans want no part.

And so as a possible recommendation to consider, perhaps our ambassadors in Europe should reinvigorate the debate over the usefulness of democratization as a goal of free nations. Perhaps the embassies could have seminars or forums or discussions or debates and leave it open, but really discuss this with their -- with people and with their friends in Europe to see if we still have any European -- or can reinvigorate a European consensus in favor of democratization. It's decreasing, in my view, in recent years.

Second point. I think Brian is entirely right that poverty has a national security dimension. Democratization itself also has a national security dimension, particularly where democratization takes place without the full development of civil society, in other words where you have elections but not really free speech, not really free political activity. And this is something that does indeed scare the Europeans and does need, I think, some further attention.

If you take a place like Bangladesh right now, what we have is, as I understand it, the shutting down of political activity everywhere except within the mosques, which are increasingly being radicalized. This could very shortly mean that Bangladesh, one of the largest Muslim countries, one of the most moderate and democratic Muslim countries, will no longer be any of that while we're not even looking. That leaves aside what's happened in the Palestinian territories with Hamas winning an election without development of civil society and a lot of other places.

So this whole -- so what I guess what I'm suggesting is the relationship between democratization and development is very important but there are also needs -- and I said this before in this room -- to be a very serious study or look at the relationship between democratization and security concerns for us and for our allies and for Indonesia and Malaysia, other countries in the world where these processes are taking place in a bizarre manner.

Thank you.

MR. PALMER: We should pause at some point and allow --

SECRETARY RICE: No, go ahead.

MR. PALMER: Carl.

MR. GERSHMAN: First, thank you very much for those remarks. They were very comprehensive and coherent. While I agree that poverty is terrible, I think, Brian, the real cancer is corruption, in terms of a cancer. Poverty is a condition. And I think in many of the newer democracies, the problem that they face in terms of performance -- and their performance has not been good and I think it's one of the things that tends to undermine the credibility of democracy today -- is the fact that corruption is such a gigantic problem and that there's so much alienation on the part of the populations from governments that are seen not only as ineffective but, you know, not honest. And they don't perform, but they also perform for themselves more than for the people. So this is a fundamental problem that has to be addressed.

On the issue of performance, there also is an issue which the OAS is trying to grapple with and I know that the President was speaking about this when he was in Latin America, which is the issue of the social agenda. In other words, what is a social agenda that democratic leaders can take to the people that can really address in a creative way the problems that they face. And it is more than just trade and just investment. How do you get assistance to people in a way that is going to be really meaningful and both improve the economic condition but also involve incentives for good behavior on the part of the population, in other words for education and work and all the things that people have to do.

These are things that leaders in the hemisphere and elsewhere, but especially in the hemisphere, are beginning to grapple with. And I just wonder whether it might make sense for the commission at some point to hear from some of the leaders who have grappled with these problems. I think of somebody who's now at Stanford, like Alejandro Toledo from Peru, who did a very good job in trying to be a good democratic leader who addressed problems of economic performance, didn't do a bad job but politically he ran into a lot of trouble where, you know, you can't improve fast enough and even when you do the right thing, because you're trying to fight corruption there are people who obviously don't want -- you know, are going to resist and then work to attack and undermine you politically. And it's a very, very difficult problem as to how you can develop political strategies to address these kinds of problems. And it might be very interesting to have a dialogue with him or with some others to hear as to how you would really go about in a concrete way addressing these problems when you do try to do the right thing.

Maybe just one other point, not on this specific subject but on something that was raised earlier about trying to multilateralize the effort. And I know I've talked a great deal with Paula about India and drawing India in, but next week we have a visit from the Prime Minister of Japan and that's another country that is ready to move on setting up a democracy institution and I hope that the visit can be used to try to encourage them to move forward on this idea. And perhaps, you know, during their chairmanship of the G-8 it might be an initiative that they would be prepared to announce.

MR. PALMER: Chet.

MR. CROCKER: Thank you, Madame Secretary, for meeting with us and sharing your powerful thoughts. I just had a couple of comments on the issue of delivery and keeping democracy legitimate by enabling it to deliver. Two points that I think we often lose track of is that our resources, our bilateral aid resources, really are a tiny fraction of the resources that are relevant to the democratic development agenda around the world, a tiny percentage. And so our strategies have to link up with the IFIs and they have to link up with them operationally. I don't know the extent to which we are currently trying to do that, what kind of quality of dialogue State and Treasury have with each other about the IFIs, but if we don't get those kinds of transitions right what we wind up with all too often is democratic experiments that collapse in the first two years because the message coming from the IFIs is the wrong message: if you want to enable a new democratic regime, to thrive, to be popular and to deliver something. If all it does is to privatize bus companies, why that's the wrong message when we need to be not only creating jobs but creating opportunities and socioeconomic benefits, as you indicated.

The other thing I think that relates to this is helping newly elected democratic regimes to learn about how to run an economy. In many cases they are very good at getting themselves into office or very good at showing street power, but hopeless when it comes to connecting the dots on economic policy, especially macroeconomic policy management. You mentioned strengthening the better run states and making sure that they stay better run. That's one way to do it is by having aggressive programs of training people on how to run an economy, which I think we know one or two things about. So thank you.

MR. PALMER: Please.

MR. SOUDRIETTE: Madame Secretary, Richard Soudriette, president of IFES. And I also want to thank you for your initiative on establishing this committee. I wanted just to speak in support of one of the recommendations with regard to promulgation of international standards for elections. You talked about the importance of governance. At IFES, we've long believed that the election process is actually an important avenue towards this and we believe strongly in the idea of election management bodies or commissions as tools and institutions of governance.

A couple weeks ago, we organized a conference here, the Global Election Officials Conference, and thank you and Secretary Dobriansky for her support and the others here for that initiative. We had over 300 election officials from 50 countries around the world. And what that meeting really underscored is that there really is a lot of bang for the buck that goes not towards massive programs of infrastructure support but really kind of moving along in the direction of Millennium Challenge. There does need to be more support for toolkits, for initiatives that really support the whole concept of election administration as an important subset of public administration. And so we've seen also the value of regional networks of election officials. You mentioned Hungary. The Hungarians have played a very important role in creating one of the largest associations of its kind and it's one of the ones that we've been engaging in issues such as Cuba.

But I would encourage you to really take a close look at this recommendation. It's an important one that I think the U.S. could go a long way in not only supporting the initiatives and toolkits but also really encouraging universities, institutions of higher learning to start establishing masters level program in election administration. Because at the end of the day, the election process is really the key to integrity and confidence in the election and in the democratic process. Thank you.

MR. PALMER: Maybe I could on my own behalf say something now. I think we're still engaged in an ideological struggle between sort of power governments centralized with an economic view of the Chinese, Putin, Chavez and many others who are basically saying, and all the leaders of the Middle East, who are saying we need a strong man to run a strong economy. And thank God, finally, India got off the dime and allowed a market economy to begin to function in India and we can see that now the old debate, India vs. China, dictatorship versus democracy, it's a little bit better, the evidence now, on our side of the argument. But I think that the argument is still very much there. And I'm particularly pleased by people like Professor Joe Siegel at the University of Maryland and others who've been making the case that at least it's even the argument of whether you have greater economic development in a democracy than in a dictatorship. And then you can begin to make the case that actually economic development is better in democracies than in dictatorships. But I think that large issue is still there and how you come to grips with it, I mean, certainly we need to provide intellectual leadership on that. It isn't a given that market economies are the right way to go. Unfortunately, it would be better.

Anne Marie, would you like to jump in? I know it's hard when people are talking and we're all headless.

DEAN SLAUGHTER: The only thing I would -- you sound like you're doing a wonderful job as head. The only thing I wanted to jump in on was Chet Crocker's point about aggressive economic training. It seems to me we can -- the State Department can play a useful role there in reaching out to and coordinating efforts by other government agencies. For instance, the SEC has an aggressive program and quite a lot of money for training securities regulators in other countries. And the Treasury, of course, has its own funds to do the same for Treasury officials, even the Federal Reserve has funds. So one of the -- I mean, these networks of government officials who provide these training exist -- we don't use them as -- in as integrated a fashion as we might. And it seems to me that State Department has an important role there.

MR. PALMER: Please, Madame Secretary.

SECRETARY RICE: Let's get --

MR. PALMER: Oh, sorry. Ken.

MR. WOLLACK: I want to echo what others have said, Madame Secretary, about your support for this committee and your words, your insightful words on these issues. They come from the heart and as well as the head and thank you. I think one of the most encouraging developments over the last decade or so has been the movement from rather unlikely quarters in terms of this linkage between democracy and development. The UNDP did a splendid job in terms of its human development report, not only talking about the interconnectedness between political and economic reform, but even talking about democracy, the dreaded "D" word, which was rarely used in intergovernmental dialogue and even talked about politics as being central to development. The World Bank has taken this up in terms of civic participation, in terms of the PRSP process. Hilary Benn recently in DFID talked about Democracy Now, as being a key element to DFID's work in addition to poverty reduction and the interconnectiveness there. And these are all, I think, extraordinarily positive developments. I think the IFES -- it's like moving an aircraft carrier a little bit and there's a lot of debate within the IFES regarding the use of the term democracy and trying to talk about politics, but everything is politics in terms of development.

I think there are three things perhaps, I think we tend to overlook. The first is we talk as Chet did about building the capacity of state institutions. And then people talk about building the capacity of civic organizations for advocacy. Both are extremely important. However, oftentimes, everything in between is marginalized and ignored. And that's the institutions of representative democracy and that's legislatures and political parties. And if they fail to perform their job, and civil society has nothing to interact with and they are unable to aggregate the interests of citizens, a vacuum -- a political vacuum -- is going to be created and that gives rise to populist leaders who promise to cut out the middle man. You don't need legislatures and parties and I can represent the people directly. And so those intermediary institutions become very, very important.

The second is the issue, as you talked about the well-governed democratic states. And I hope the Department can look at the foreign aid reorganization process and look at some of the partnership states that are listed because some of those states are well-to-do states, but they are hardly governed justly or democratically. And I think it would be useful to look at that category of countries through the democratization prism. And the third is the Millennium Challenge Corporation which is an extraordinary initiative in looking at compact countries that have made the threshold, passed the threshold, and many of those countries have done so on the democratic side just barely have come over the hurdle, and I doubt whether those countries are going to ask for assistance on the democratic front, you know, advocating more pesky parliaments or more pesky civic organizations. And the question is do we have the ability to influence the process and to ensure that that criterion is used not only in helping countries reach a compact status but also ensuring that some of those resources are dedicated for governing justly, even if they are a compact country and there are a few in that category. I think that if they fall off the wagon, it's going to be because of the democracy issue.

MR. PALMER: Madame Secretary.

SECRETARY RICE: Thank you for all of the great comments. I won't try to respond to everything because in general I find myself in violent agreement with what's been said around the table. But I would like to just highlight a couple of points. One is that on the national security front, we did -- it's a little noticed change. But we did succeed this year in having State declared one of the national security departments alongside Department of Homeland Security and the Defense Department. And I think that was a very important signal that the understanding of the work that we do which is some preventive, some crisis, but that many of the struggles that we are in have no military solution and some of them don't even have short-term solutions. And to the degree that we're in a great ideological struggle, which I believe we are in a great ideological struggle between extremism and moderation that the kinds of tools that we can bring to bear will be critically important is recognized by that designation. And so we have asked for a fairly healthy increase in funding for foreign assistance. I think it's absolutely necessary because in trying to help bring about well-governed states -- well-governed democratic states that would be at the heart then of our national security policy, we have a lot of work to do. And we are trying to transform the way that the Foreign Service and the people in the field interact with countries. They have to have resources, with which to do it. So I just wanted to note that.

I wanted to note on elections, I agree and I was just today talking with Ryan Crocker about the Election Commission in Iraq. They're trying to move forward on provincial elections. Each time that we have to move forward, we have to sort of regenerate the machinery because it -- these are young democracies. But if they can -- when they manage their own elections, it's really a tremendous source of pride and it's a tremendous source of institutional memory and institutionalization of the democratic process. And so I agree completely on that and on the regional networks. And I agree Hungary has been terrific in this regard.

I want to just mention on trade policy. I really do hope that this WTO round is successful. The President is very committed to making it successful and he's been working, as you know, with Brazilian President Lula on trying to make it successful because we would like very much to do something about the agricultural subsidies that are a problem for the developing world. We need others to move; Europeans and others to move on issues like market access. But obviously nothing could be better for poverty reduction than a successful Doha round.

And if I could just make a comment here on trade policy more generally. We don't have a very broad consensus these days about free trade. And it's extremely important to recognize that one of our most important poverty reduction tools is to open up markets for the goods of those countries that are trying to rise out of poverty. And as we are thinking about the kinds of free trade agreements that we have before Congress and the WTO round, I think one of the additional arguments that we all need to make is that all of the foreign assistance that we give is going to be augmented and amplified many times over by strong free trading policies as well. I wanted to just mention on the social agenda and the question of what kind of social agenda can democratic states put forward. You know, I think one of the areas that we are working very hard is in education because the ability to have upward mobility is really quite key to democracies that the Chilean Foreign Minister was in a couple of days ago. And he told me something quite remarkable which is that he said something like 70 percent of Chilean University students are now -- are first generation.

That would track with where the United States was. I don't know how many decades ago, but it says something good about an economy and a society that we know has been making moves toward upward mobility. But that may be one of the most important indicators that you're getting now, not just statistics that say that this is a strong economy, but actually now the benefits of that beginning to be for the population more broadly. On the contrary, I was just with the Haitian Foreign Minister who told me that still a full 25 percent of Haitian children are not receiving primary education. So perhaps it's because I'm an educator, but I've always believed that in the United States our strongest -- one of the strongest elements of our cohesion is that even if a parent isn't doing very well, he believes that his child has a chance to do better because of the access to education. And I've always said that when I stand in front of a Stanford class, one of the most heartening things to me is that one student is a fourth-generation Stanford legatee and the student sitting next to him is an itinerant farm worker's son. And somehow that is an important element in the development of democracy and people's willingness to stick with it, even if they themselves are not fully benefiting.

On MCC, it is one of our principle poverty reduction programs -- very strong emphasis on corruption, very strong emphasis on good governance. The threshold program, I think, was designed to be one to incent countries to do better on some of the indicators where they might not be doing very well. I think MCC has had a pretty powerful impact. You do actually have countries coming to you with their little MCC, why we would be a good MCC older or very often, you know, little -- even a glossy of why we would be an MCC country. And with pretty specific things about laws that need to be changed, various elements of government that are going to have to act differently. It's had a pretty powerful impact and I -- if we remain true to what we're trying to do with it, I think it'll have a quite transforming impact. And finally on the IFES, we do have to coordinate our work with the IFES. We've had a quiet, close relationship with the -- increasingly with the InterAmerican Development Bank where their President Moreno is particularly interested in the bank's ability to help create the infrastructure for well-governed democracies and he's not afraid to use the word "democracy" -- well-governed democracies to support economic development. I would note, too, that I'm hopeful that as we move forward, we look again at what can be done on infrastructure. And here I mean, old-fashioned infrastructure.

One of the problems that we have really uncovered with the MCC compacts is the degree to which old-fashioned issues like roads are absolutely critical to economic development. And the place that this is just screaming at us is in Afghanistan. Where it is -- where we're trying desperately to supplant poppy with legitimate crops. And one of the problems is if the legitimate crop is pomegranates, poppy doesn't spoil, pomegranates do. And if you don't have a road network to get pomegranates to market, you're going to have a hard time getting farmers to switch. So that's a place that I hope the development banks, will go back and take a look because individual programs of -- like our own can do some. We've really been working with a lot of countries around the world, one of them Japan, for instance, on roads -- Saudi Arabia on roads in Afghanistan. But if you think of the division of labor of what needs to be done. The donor community, whether it's banks or donors or the private sector, for that matter, really needs to think in a more -- in a sense of a continuum of what each and every part of that development and donor community can do. So we've got a long road ahead of us to engrain some of these ideas. We're trying to institutionalize some of them. I think the MCC, in particular, is a kind of transformational tool. But the good work and the support of this committee and of people like you is going to be critical to what we do over the next 18 months or so to, we hope, institutionalize some of the progress we think we're making.

Thank you very much.

2007/289

ENDS

© Scoop Media