Creating American Jobs Through Diplomacy and Development

March 14, 2012 By Joel Paque

The Administrator of USAID talking about partnering with the private sector and increasing exports? The head of the U.S. Chamber of Commerce talking about why the Chamber supports the International Affairs Budget? You wouldn’t be wrong to wonder if somebody’s talking points got switched. But the reality is, both the development sector and the corporate sector know that they have mutual interests in promoting economic growth in today’s global economy.

It isn’t just USAID working more with the private sector. Secretary Clinton recently rolled out her Jobs Diplomacy platform, saying “So why, you might ask, is the Secretary of State now spending as much time thinking about market swings, as missile silos? Well, to put it plainly, Americans need jobs. And every $1 billion of goods we export supports more than 5,000 jobs here at home – even more in industries like telecommunications and aerospace. That’s why President Obama set a goal of doubling America’s exports over five years.”

Diplomacy and development help create jobs at home by increasing the demand for American goods in the rapidly growing markets of the developing world.  One out of every five American jobs is tied to trade, and developing countries represent nearly half of U.S. exports.  The State Department is responsible for helping  open those markets to U.S. businesses, make connections between Americans and local partners, and ensure that American businesses are being treated fairly according to local laws and rights. USAID and our other development agencies help build these markets, and create conditions essential for private sector success, such as rule of law, improved infrastructure, and combating corruption.

One great example of how these programs can lead to job creation here in the U.S. comes from Vietnam, where market-based economic reforms have substantially increased U.S. exports.  Under the Vietnam STAR (Support for Trade Acceleration) Program, USAID helped Vietnam improve its domestic business regulatory environment and open its economy to foreign competition by providing extensive, low-cost assistance in revising Vietnam’s commercial, legal, regulatory, and institutional framework to promote and permit investment.  Part of this effort has included a meaningful voice for the private sector in reforms.  The program has led to the revision or enactment of over 100 laws and regulations affecting the economy.  The total cost of USAID assistance in this program has been approximately $1 million per year.  Returns on that investment for the U.S. economy have been dramatic.  The reforms have substantially increased U.S. exports to Vietnam.  During STAR’s 2001-2010 operation, the United States became one of the leading exporters to Vietnam, with exports increasing by over 700%.

President Obama set an ambitious goal of doubling exports by 2015, and if that goal is to be reached, the government will need to work across agency lines, and fully utilize diplomacy and development in support of our economic interests. As Administrator Shah recently said, “By strengthening private sector activity in developing countries, we have the potential to enrich not just our partners but ourselves through increased exports and new markets for trade.”  These efforts, along with our diplomatic corps at embassies around the world, help the United States stay competitive in the global economy, which will ultimately fuel the creation of jobs here at home.