Emerging Experience: How Political Democracy and Economic Development Are Mutually Reinforcing

I want to recognize Congresswoman Nita Lowey for her leadership on these significant issues. Congressman Earl Pomeroy, who is also here with us today, has been a strong supporter of democracy promotion. We look forward to continuing to work and partner with them in these critical areas.

I express deep regret and sympathy at the tragic loss of four NDI colleagues. They should be honored for their courage in entering a high-risk area to do heroic work.

I want to thank Chairman Peter Ackerman, Executive Director Jennifer Windsor, Tom Melia, and especially Rebecca Vo at Freedom House for all of their efforts in organizing this event. Thanks go to Lorne Craner of IRI for hosting us in their conference facility. And I want to thank each of you for being with us today. Many of you work on the front lines of democracy and development around the world, and we are grateful for your dedication.

There is international agreement that sustained economic growth and effective poverty reduction require government that is transparent, non-corrupt, and responsive to the needs of its people. An independent legislature that creates laws ensuring an equal playing field is essential to lasting development, as is a judiciary that adjudicates fairly and reliably. Only a democracy can harness the talents of all its citizens and allow them opportunities to realize that potential in the open marketplace of goods and ideas.

That was affirmed in the 2002 Monterrey Consensus, which states that: "Good governance is essential for sustainable development. Sound economic policies, solid democratic institutions responsive to the needs of the people and improved infrastructure are the basis for sustained economic growth, poverty eradication and employment creation." The Monterrey Consensus emphasized that respect for human rights, the rule of law, gender equality, market-oriented policies, and "an overall commitment to just and democratic societies" are "essential and mutually reinforcing."

These are not just abstract principles. It is an honor to be joined today by representatives of countries that have made conscious, determined efforts to pursue democracy and to rule justly, sometimes in challenging contexts. Nations in Africa, Asia, Europe, and Latin America are taking substantive steps that increase transparency and good governance, both to expand freedom and democracy and because those policies have the greatest chance of reducing poverty and benefiting the lives of ordinary citizens. They are attracting growth-oriented foreign development assistance and investment that can have powerful multiplier effects, both economically and in terms of democratic governance.

I'd like to highlight some examples, first, to recognize the strong efforts underway in nations across the globe to advance democracy and development; second, to show that the United States is working constructively with those countries, including through substantial, incentive-based foreign assistance programs; and third, to point to a hopeful path that others may choose to follow.

Mali has advanced democracy under challenging circumstances. Today, Mali is committed to good governance and democracy, and its policies serve as an example for the continent and the world of how a country can maximize its assets and provide opportunities for its people.

Mali is also the Chair of the Community of Democracies (CD), a coalition of 120 nations that seek to strengthen democracy across the globe. Ambassador Abdoulaye Diop has played a particularly vital leadership role in the CD. Mali chose democracy and development as the principal theme of the 2007 CD Ministerial in Bamako, and we look forward to working with Mali to further that agenda through concrete, effective programs.

The United States is proud of its recent joint commitment with Mali to strengthen democracy and development there through a Millennium Challenge Compact that totals nearly half a billion dollars. The priorities that Mali selected and is pursuing include an irrigation project that will introduce innovative agricultural, land tenure, credit, and water management practices, as well as organizational reforms; an airport improvement project; and an industrial park. We look forward to hearing specifically from Ambassador Diop about Mali's progress toward its goal of reducing poverty through economic growth.

In Georgia, genuine political reforms have had a real impact on its citizens' daily lives. And Georgia's leadership in that part of the world through the Community of Democratic Choice and other regional efforts demonstrates how democracies can encourage each other to pursue positive reforms that in turn attract investment and spur economic growth.

For its part, Georgia identified a lack of reliable infrastructure and the slow development of businesses as two barriers to poverty reduction and economic growth in the regions outside Tbilisi. As a result, its $295 million Millennium Challenge Compact focuses on renovating regional infrastructure and developing enterprises. Projects implemented by Georgia will serve hundreds of thousands of its citizens and generate substantial new economic benefits. Today, Georgian Ambassador Vasil Sikharulidze will elaborate further on Georgia's efforts.

Central America has gone from being engulfed in conflict to developing an integrated sub-region based on principles of democracy, good governance, and economic freedom. El Salvador is a good example of the new spirit of openness. Its success is founded upon its commitment to build the necessary institutional framework for democracy to thrive.

El Salvador and the United States recently partnered through a nearly half-billion dollar Compact. Salvadorans are pursuing strategic investments in education, public services, agricultural production, rural business development, and transportation infrastructure. Their projects will be focused primarily in El Salvador's northern region, which had suffered acutely under the civil conflict that ended in 1992; they could result in a 20 percent rise in income there over five years. Ambassador to the United States Rene Leon will discuss El Salvador's efforts further on the panel.

The Philippines, an active member of the Community of Democracies, is initiating anti-corruption programs and improving tax and customs training and enforcement. Ambassador of the Philippines Willy Gaa will detail their initiatives.

There are many other examples. Madagascar is advancing property rights, growing the financial sector, and raising household incomes among the poorest farmers; Burkina Faso is expanding education for girls, a crucial step to maximize its human capital and compete in the global economy; Cape Verde is pursuing resource management and transportation infrastructure improvement, and developing the financial sector and investment laws.

I have spotlighted a handful of examples to emphasize that many countries are pursuing democracy and development in tandem, and that the processes are mutually reinforcing. The United States is an active partner in helping countries along that path-and we do so not just through direct foreign assistance, but also, for example, through support for the rights of workers, corporate social responsibility, women's empowerment, and backing for multilateral efforts. Nor are we alone in assisting those who seek the mutual benefits of democracy and development; the EU, for example, is pursuing a number of development and governance initiatives aimed at furthering reform and transparency. Portugal has helped take the lead in promoting democracy and good governance, and is chairing the Community of Democracies' Working Group on Regional and Inter-Regional Cooperation.

We are together helping to fulfill the new partnership between developing and developed countries outlined in the Monterrey Consensus. In that partnership, we collectively committed ourselves to "sound policies, good governance at all levels and the rule of law," and to promoting development through trade and increased international financial and technical cooperation.

We realize, of course, that the road to development and democracy will not always be easy. Yet the steps taken by countries such as the ones I have mentioned are setting them on course to bolster their democratic institutions and reduce poverty on a sustainable basis. It is crucial that we recognize those efforts, and do our best to encourage and support them.

The distinguished panelists here represent countries at the forefront of advancing democracy and development. I very much look forward to hearing their thoughts and ideas during this session.