Development and our Economy: Understanding the link

September 28, 2010 By John Glenn

“Today the American economy is ever more closely tied to the world economy,” began moderator Nina Easton, Washington Bureau Chief of Fortune Magazine, kicking off our second session.  Panelists included Farooq Kathwari, Chairman, President and CEO, Ethan Allen Interiors Inc; Gary Knell, Board of Directors, Center for U.S. Global Leadership and President and CEO, Sesame Workshop;  Robert Mosbacher, Jr., Former President and CEO, Overseas Private Investment Corporation ; and Lee Zak, Director, U.S. Trade and Development Agency.

“If you raise the livelihood of people living in poverty, it’s good for them and good for us,“ suggested Farooq Kathwari.   Ethan Allen, he noted, is a traditional company in many senses and impacted by globalization as well.   He talked about the national security implications of global poverty, suggesting that two-thirds of the people in the developing world living in abject poverty creates ethnic conflict and instability, concluding “I don’t think we have an option but to improve the livelihood of the peoples of the world.”

“For every foreign assistance dollar that we spend, we’re seeing $40 in exports,” reported Lee Zak.  The United States is engaged in the developing world in helping to develop the basic economic infrastructure such as energy, telecommunications, and water.

Rob Mosbacher applauded the Administration’s new development policy for placing a premium on investment and trade as a driver of economic growth and prosperity.   “Walmart is not going to Africa just because it’s a good thing to do, but because they think it’s good business,” he suggested, pointing out that these projects “have a highly developmental aspect to their work.”

Gary Knell talked about what he called Sesame Workshop’s “muppet diplomacy,” saying they seek to “export education in a way that improves America’s standing in the world and improves local economies.”   Noting a partnership Sesame has with USAID in Pakistan, he described television as a powerful way to educate children so they stay in school, go on to contribute to build local economies, and build a new generation of peace.

Tackling the debate about jobs moving overseas, the panelists emphasized that economic engagement with the world can mean jobs at home.  Rob  Mosbacher observed that at OPIC, “we didn’t do deals if we thought they would cost American jobs.”  Lee Zak spoke about a new USTDA business partnership program that brings potential buyers from emerging economies to the United States to meet with businesses.

How do you make the case in a tough economic climate?  Rob Mosbacher challenged the idea that “every trade agreement means a loss of jobs.  It’s simply not defensible.”   Lee Zak emphasized how exports can lead to new manufacturing jobs in sectors like green jobs and research and development.  In conclusion, Gary Knell said, “ to me, the message is you need to engage more, not less.  As you’ve pointed out, the Chinese are all over Africa and we need to be in there.”