Secretary Clinton Discusses “Economic Statecraft”

April 27, 2012 By Joel Paque

There has been a transformation in the field of development in recent years.  In the 1960s official development assistance (ODA) accounted for about 70% of the capital that went to developing nations, but today it represents only about 13% of total investment in these growing markets. Private sector investments now make up the vast majority of capital inflows seeking to take advantage of dramatic growth rates across the developing world. Good public policy can leverage this private capital, bringing resources and expertise from outside of government to help further U.S. objectives, to help address the significant development challenges that remain—from the HIV/AIDS epidemic, to ensuring access to clean water, to promoting food security in regions where too many still go without proper nutrition.

Secretary Clinton has sought to address this challenge of engaging the private sector in a number of forums recently, building on her “Economic Statecraft” agenda. As laid out in remarks at the Global Business Conference a few weeks ago, this agenda examines the intersection of U.S. economic and development interests, and focuses on how diplomatic and development efforts can help create opportunities for American businesses abroad, while also advancing development objectives.  Today, she hosted the State Department’s Global Impact Forum (along with the McDonough School of Business at Georgetown), saying, “We don’t have to choose between doing well and doing good. The only choice we have to make is to do better – do better in government, do better in business, do better in civil society. And one thing is clear: We cannot solve our problems or address our challenges without working together.”

This commitment from government relies on a strong partner in the private sector, and the conference today suggested that positive steps have been made. Tom Donohue, President of the U.S. Chamber of Commerce, remarked recently, “I would add that in foreign and economic relations, business and government, too, must be indivisible and very closely aligned.  What do I mean by that? Economic growth cannot be generated without the private sector. And the private sector cannot generate economic growth without realistic policies from government that encourage and enable free enterprise.”  As the world economy continues to grow ever more inter-connected, and as more and more U.S. businesses seek to invest abroad, it is critical that good policy exist to harness the power of these investments to advance U.S. interests while also helping increase bottom lines.