Remarks from Ambassador Farrar during APEDE monthly Meeting

November 29, 2012

Ambassador Farrar during his speech

The Pillars of Competitiveness in a Changing World
Ambassador remarks as intended for speech.

Thank you, Roberto, for the kind introduction.  It is an honor for me to be here with you today.  When I was considering your invitation to speak at this event, I was reminded of a quote by one of my favorite authors, Mark Twain, whose birthday we celebrate tomorrow.  He said:  “Better to remain silent and be thought a fool than open your mouth and remove all doubt.”   Nevertheless, here I go.  

I want to speak today about competition in a changing world.  I’d like to begin with the Tratado de Promoción Comercial, which will change the way in which the United States and Panama relate, and how we compete in the global economy.  I’d then like to focus on the importance of education, which to me is the single most important pillar of a competitive economy.

Since APEDE’s founding in 1948, it has witnessed incredible changes in Panama, in the United States, and in the relationship between our nations.  With the recent completion of the necessary requirements for the implementation of the Tratado de Promoción Comercial, we are at the threshold of another major change, one which can bring increased prosperity for both Panamanians and Americans, and deeper cooperation between our countries.  The TPC is not a magic bullet that will instantly make American products cheaper or  attract American investors to Panama. But it is a powerful tool, and one that if used properly will provide advantages to consumers, workers, and businesses of both countries. 

The TPC is forever, and must be able to adapt to a changing world.  Every day, people, businesses, and governments become more interconnected and more interdependent.  Transportation, information, and communication links are faster and cheaper than ever.  Smart phones bring the internet to our pockets; tablets and satellites allow us to work as easily from a coffee shop in Los Angeles as an office in Panama.  We can connect and interact today in ways that would have been unimaginable 10 years ago. Will we, and will our children, be prepared to compete in the world of ten years from now, or twenty?   

Despite the changes we will see, APEDE’s mission: to promote, strengthen, improve and preserve the principle of free enterprise in Panama, doesn’t need to change at all. In fact, those four pillars: to promote, strengthen, improve and preserve are exactly what are needed to be competitive in a quickly changing world.

PROMOTE
My boss, Secretary of State Hillary Clinton, has made Economic Diplomacy, or “jobs diplomacy” as she calls it, one of the United States’ top foreign policy priorities.   Getting the TPC underway was one of the four priorities with which I came to Panama.  As Secretary Clinton said in a recent speech to business leaders: “We fundamentally believe that increasing trade and growing prosperity will benefit not just our own people, but people everywhere”. 

I take that mandate seriously.  My team and I are working hard to partner with Panama, using programs like the Direct Line Business program, the Global Partnership Initiative, and Pathways to Prosperity to expand opportunities.

One key measure of the success of the TPC will be how effectively the benefits spread not just from big businesses to small businesses, but throughout Panama.  Panama City is a remarkable success story, and many of the people living here enjoy a high standard of living with commensurate opportunities for employment and education.  But as you may have noticed, my wife and I have spent a lot of time over the past six months traveling throughout Panama.  Outside of this city, persistent poverty persists for many. The 2012 Bertelsmann Transformation Index says that “to eradicate or at least significantly diminish these blatant inequalities is the most pressing developmental challenge for the country’s political leadership.”  In our travels around the country, we’ve met many dedicated Peace Corps volunteers who are working in rural communities with their Panamanian hosts to meet this challenge.   

Mark Twain also said:  “always do right.  This will gratify some people and astonish the rest.”  One powerful tool to spread opportunity is to promote corporate social responsibility, whereby companies do good by doing right.  I’ve worked on corporate social responsibility for many years, and aim to make it  a flagship effort of our embassy.  Earlier this month, we reached a partnership with United Way Panama to oversee our Alcance Positivo youth centers in Panama City, San Miguelito, Arraiján, La Chorrera, Colon, and the Darien.  Working with United Way, our goal is not only to make these 22 centers self-sustaining but to see this network grow.    

Every year, the U.S. State Department gives the prestigious Award for Corporate Excellence to U.S. companies for their community involvement overseas. I will be very disappointed if a company from Panama does not win this award while we are here. 

IMPROVE
Last month, I had the opportunity to address a conference on the TPC at the United States Chamber of Commerce headquarters in Washington, D.C.  While that conference highlighted the opportunities which the TPC provides, it also was an opportunity to highlight areas in which the United States and Panama have committed to working together to make improvements.

The 2013 World Bank Doing Business Report contained much good news. Panama ranked 9^th worldwide in ease of trade across borders and 23rd in ease of starting a business.  These are great accomplishments!  They show the world that Panama is serious about attracting investment and helping companies grow. 

However, the World Economic Forum’s 2012 report ranks Panama 132nd out of 144 countries in terms of the independence of its judiciary and 94th out of 144 countries in terms of the strength of investor protection.  Under the TPC, both our governments have committed to promoting transparency and eliminating bribery and corruption in our bilateral trade and investment.  The TPC includes clear rules and procedures for open government procurement in the United States and Panama.  This will be an area in which we will work  closely to ensure that the promises of open procurement procedures established by the free trade agreement are fully realized.  In this manner, the TPC and APEDE’s Pacto Ético share some of the same goals:  open and fair competition to the benefit of all.

PRESERVATION
In our travels throughout Panama, from the Darien to Bocas del Toro, from the Guna Yala to Chiriquí, we have come to love Panama’s natural beauty and resources.  From the birds and wildlife to rainforests, volcanoes, oceans and mountains, Panama like the United States is rich in ecological wealth.  In the 2012 Yale University Environmental Performance Index, Panama ranks relatively high, 39^th in the world in terms of the quality of environmental protection, but faces significant threats to its forests, mangroves and water resources.  Under the TPC, we will establish an environmental council, with participation from government officials of both countries.  This council will meet with the public to work through issues of environmental protection that affect our bilateral economic relationship.  In addition, the United States and Panama signed an environmental cooperation agreement under the Trade Promotion Agreement to encourage activities to protect the environment in Panama.  We have some amazing partners in Panama, such as the Smithsonian Tropical Research Institute, to encourage scientific research-based protection of the environment in Panama.  The TPC provides additional tools to help do so.

STRENGTHEN
Promoting U.S. businesses is one of the most enjoyable parts of my job.  During lunch with the board of the AmCham during our first week here, we heard over and over about the importance of education, the need to improve the educational system, and the difficulties that companies have recruiting Panamanian graduates to fill technical and managerial positions.  Evidence of this challenge is not just anecdotal:   a survey by Manpower, Inc. reported in this week’s La Prensa found Panama to be the second most difficult country in Latin America in which to fill professional positions.

In my travels around Panama, I’ve encountered students who are bright and eager to learn:  in the Instituto Belen in Colon; public schools in Coclé, Chiriquí, Guna Yala, Bocas del Toro, and the Darien; the Escuela de los Estados Unidos in San Felipe.  All they ask for is the opportunity to learn.

We are committed to working with Panama on the educational challenges of tomorrow.  We want to create greater opportunity for Panamanians to study in the United States and for American students to study in Panama.  To do so, we will use our ACCESS English-Learning Program, Fulbright scholarships, Humphrey scholarships and our new partnership with the Universidad Latina for CELI, the Center for English Language Instruction.  Last month, I met with the first graduates, more than 300 of them, of our ACCESS English-learning classes.  I told them about my wife, who arrived in the United States as a teenager speaking almost no English, and how they had been given an opportunity of which they needed to take full advantage in the years ahead.

But we have a long ways to go.  According to Open Doors 2012, the annual report on international academic mobility, 27% fewer Panamanian students went to the United States in 2011 than in 2010.  I am committed to reversing that trend, and to working with Panama to ensure that opportunities for secondary and higher education are broadly available.

Last month, I spoke at a fair for rural women hosted by INAMU in Santa Fe, Darien.  Before I spoke, I pondered what to say that would be relevant to the lives of these women.  And then I remembered the students we had met several weeks earlier, in Jaqué, at a boarding school hosted by the Missionary Sisters of Santa Teresa.  Those students spend hours on the river to reach Jaqué, and spend the week away from their families:  all this to get a secondary education.

I decided to speak about the importance of education, and the importance of persevering with the education of their children, especially their girls, despite the obvious challenges of doing so.  Afterwards, an Emberá woman came up to me and asked what I could do for her son, a secondary student yearning to learn English.

The reality was that I had little to offer her.  Our ACCESS program has not yet reached her region.  But I came away with a determination to find a way to help spread English classes in the Darien, and believe we have found a way forward in a future partnership with ISAE.

CONCLUSION
To be competitive in the world economy of ten years, or twenty years, from now, Panama like the United States will need contributions from all of its youngest generation.  In the United States, this means we must focus on the kids of Bedford-Stuyvesant, or the immigrant children of Bailey’s Crossroads, Virginia, where my children went to school, as much as we do on the children of Manhattan’s Upper East Side, or Beverly Hills.  As Panama responds to the challenges of educating its future generations in such diverse environments as Casco Viejo, Colón, the Darien, Coclé, or Bocas del Toro, my message today is that the United States will be a willing partner.  My request to the businesses represented in this room is that they ask what more can they do to help meet this challenge.  Thank you.