Releasing the Energy of Entrepreneurs and Partnerships

Thank you Mr. Chair for that kind introduction. I would also like to thank you, Mr. Chair, for your leadership in organizing this year’s CSD. The dynamic agenda, with its partnership fair, learning center and interactive dialogues, have enabled us to identify best practices, obstacles and constraints. The innovations brought forth at CSD-12 have broader applications within the UN system, and we would hope that other UN bodies learn from the successes that you Mr. Minister have helped to create.

We are here to discuss water issues. Yet, I would like to focus my remarks on energy: specifically, how to unleash the energy of local entrepreneurs to promote economic growth, social development and environmental stewardship. Catalyzing the creativity and innovation of entrepreneurs, depends on four elements.

The first is to create an enabling environment. The World Bank estimates that corruption reduces a country’s growth rate by one half to one percentage point annually. Strengthening the rule of law, promoting transparency, opening markets, and formalizing the economy all build trust and promote predictability. These are fundamental prerequisites if countries are to both nurture the development of local capital and attract foreign direct investment.

The second is capacity building. We must ensure that individuals and institutions have the necessary skills and capabilities to perform their duties. Training local men and women to carry on the work -- long after donor programs have been completed -- is a good investment. For example the U.S. Government’s “Water for the Poor Initiative” has established over 3,000 water user groups. These groups now have the know-how and training to make decisions and implement programs by themselves – without being dependent on others.

Here at the CSD, the Learning Center has demonstrated that we can contribute to this capacity building effort. Our challenge now is to replicate this on a country-by-country basis. We look to the World Bank, UNDP, and others to help bridge our multilateral discussions here to specific country-level initiatives.

The third is financing. Financing is a cornerstone of development efforts. Innovative financing mechanisms that provide attractive incentives for investment are the key to unleashing the vast untapped potential of entrepreneurs. Here’s how we do it. the U.S Government has been helping to mobilize local financial resources for water and sanitation infrastructure projects through USAID’s Development Credit Authority. Since 2002, the DCA has leveraged approximately two hundred million dollars in local currency loans that have provided improved water and sanitation to more than three million people in Bosnia, Egypt, India, Morocco, and South Africa. This same guarantee mechanism provided $250 million in local currency loans to entrepreneurs in non-water related sectors. Private local banks, and not the federal government, made all of these loans. These initial results give us optimism that we are on the right track.

ODA also plays a catalytic role in advancing development. By enacting the Millennium Challenge Account Act with $1 billion appropriated this fiscal year, the United States has expanded our traditional assistance programs. The Bush Administration will aim for $5 billion annually for this program. However, ODA alone cannot begin to fill the enormous funding gap for infrastructure, nor is it a substitute for polices specifically directed at stimulating economic growth, and domestic and foreign investment. The power of the private sector’s financial, technological, and human resources will always be far greater than government assistance.

The fourth element is partnerships. Partnerships leverage the strengths of governments, civil society and the private sector. They are vital to achieving the goals we have set for ourselves and help deliver needed services. For example, since its launch at the World Summit on Sustainable Development, the Safe Water System Initiative has built programs in over 20 countries that create local demand for technologies to disinfect and store water at the household level. This “point of use” approach to improving water quality has brought immediate, life-saving results. In Guatemala this technology has nearly cut in half the incidence of diarrheal diseases, particularly among the most vulnerable members of our societies.

USAID’s Global Development Alliance is one of the U.S. Government’s primary tools to encourage public-private partnerships. Launched by Secretary of State Powell, GDA strengthens the impact of U.S. development efforts by coordinating the initiatives, activities, and resources of the public sector with those of a variety of private partners. In two years, GDA has fostered over 200 partnerships with a total U.S. government investment of close to $500 million. As Secretary Powell has said, partnerships are the ‘watchword’ of this administration.

Mr. Chair, the United States looks forward to continuing to work in partnership with all stakeholders from other governments and major groups to promoting concrete results to achieve the visions set forth in Agenda 21 and the Johannesburg Plan of Implementation. Thank you.