Archive for the ‘Economy’ Category

Why a Re-Balanced State Department Budget Should Include Support for Cultural Diplomacy

June 14, 2017

Curtis S. Chin (Asian Development Bank, 2007-2010)

Cross posted from Ambassador Chin’s LinkedIn Page.

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GWANGJU, SOUTH KOREA – From here on a Korean peninsula split between North and South, to Capitol Hill in Washington, D.C., where U.S. Secretary of State Rex. W. Tillerson recently testified before a Senate Appropriations Committee on the FY 2018 State Department Budget Request under U.S. President Donald J. Trump, our world remains as divided as ever.

Tillerson made clear that the Fiscal Year 2018 budget request of $37.6 billion “aligns with the [Trump] administration’s objective of making America’s security our top priority.” While there would be “substantial funding for many foreign assistance programs,” he said, other initiatives would see reductions. The State Department and USAID budget, he noted, had increased more than 60 percent – a “rate of increase in funding [that] is not sustainable” – from Fiscal Year 2007, reaching an all-time high of $55.6 billion in Fiscal Year 2017.

“While our mission will also be focused on advancing the economic interests of the American people, the State Department’s primary focus will be to protect our citizens at home and abroad,” said Tillerson in his prepared remarks introducing the budget request.

Time to Get Creative with Diplomacy

Yet, with disruption and division haunting our world, the United States needs to get creative and double down on diplomacy in all its forms. This can be done cost-effectively and in a way that showcases America at her best.

This is particularly important in places such as South Korea and elsewhere in Asia and the Pacific – a region that continues to be a key driver of global economic growth. Much of the region remains worried about an increasingly aggressive China and would welcome strengthened U.S. engagement.

Certainly, there is no substitute for the “hard power” of a strong military and a willingness to deploy and use military assets. U.S. engagement in Asia will benefit from an America that is stronger both economically and militarily.

That was clear when former U.S. President Barack Obama’s failure to act after his “red line” was crossed in Syria unintentionally undermined his much publicized “U.S. pivot to Asia.” That Obama-era initiative came to be seen by many in the region as more rhetoric than reality and, as I argued on CNN, “more bark than bite.”

Soft Power Has Its Advantages

But “soft power” too has its advantages. This must be kept in mind both by the U.S. president and the leadership of the U.S. Congress as work moves forward on an overall FY 2018 budget that gets spending under control while advancing American interests.

Trump should be applauded for not shying away from the hard work of seeking more balanced economic and trade engagement, and more sustainable, if not yet balanced, budgets.

I believe that a final, negotiated FY 2018 budget request for the State Department should include continued funding – if not a gradual increase – of what has been a relatively small amount of money allocated every year to the soft power of “cultural diplomacy.”

Roughly defined as the use of an exchange of ideas, traditions and values to strengthen relations and encourage engagement, cultural diplomacy is perhaps most easily seen in the use of music, arts and sports to build cross-cultural understanding.

Beyond “Ping Pong Diplomacy” in Asia

Famously, in the early 1970s, an exchange of table tennis players between the United States and China helped pave the way for a visit to Beijing by then President Richard Nixon. Then, it was “ping pong diplomacy.”

Today, it could well be the power of American football or music that helps America and Americans to better connect abroad – and that includes with counterparts in long-time allies, such as here in South Korea. Likewise, the power of South Korea’s culture from its rich traditions to the new wonders of K-pop and Korean TV dramas are advancing South Korean interests and “brand Korea.”

This February at the Asia Culture Center in the South Korean city of Gwangju, I was honored to join our U.S. Charge d’Affaires Marc Knapper from our embassy in Seoul to support American cultural diplomacy in action. Some 100 participants and their families and communities in Korea came together with a team of dancers from the Battery Dance Company in New York to help build understanding and bridge divides. Gwangju is the 6th largest city in South Korea and the birthplace of that nation’s modern democratic movement.

“Inclusion is the name of the game,” said Battery Dance Company founder and director Jonathan Hollander to me, “with disabled students working with high school dance majors; Filipino young women and a high school hip hop dance club; North Korean defectors; middle-aged ladies from a community dance group; and the Gwangju Ballet.”

Cultural Diplomacy at Work: Dancing to Connect

I first came to know Hollander when I served some 15 years back on the bipartisan Advisory Committee on Cultural Diplomacy under U.S. Secretaries of State Colin Powell and Condoleezza Rice. That committee was authorized by the U.S. Congress and established in the aftermath of the 9/11 terrorist attacks, as security concerns led to increased restrictions on travel and greater scrutiny of visitors from some Muslim-majority countries.

I now serve on the Battery Dance international advisory board as part of my own efforts to encourage cultural exchange – and build understanding of the United States.

“Cultural diplomacy becomes a real live thing when you get diverse people into a space together and differences are erased, borders crossed, preconceptions challenged [and] cooperation engendered,” said Hollander. “Both the US and Korea are experiencing social upheaval at the same time. Tensions are high. What does the future hold?”

Perhaps, we should once again look to the past to answer that question amidst new U.S. restrictions on visas and potential temporary travel bans from some countries.

Nearly 12 years ago, in September 2005, the eight-person Advisory Committee on Cultural Diplomacy issued a report to the then-U.S. Secretary of State underscoring the importance of strengthening U.S. engagement internationally as positive perceptions of the United States fell, particularly in the Arab and Muslim world.

Our committee included Republicans and Democrats in the world of academia, culture, business and government.

The Linchpin of Public Diplomacy

In our report, “Cultural Diplomacy: The Linchpin of Public Diplomacy,” we urged the then-Secretary of State to consider a number of recommendations that would strengthen America’s soft power in the ongoing battle of ideas, and create a cultural diplomacy infrastructure and policy for the 21st century.

As I found later through the Battery Dance Company and other organizations, whether supported by the U.S. government or U.S. businesses abroad as part of their corporate social responsibility efforts, sometimes it is not the career diplomats who are our best American representatives. Indeed, everyday Americans as well as American businesspeople, athletes, entertainers and performers are often best positioned to convey the vibrancy, the innovativeness and warmth that is also the United States.

While the mandate and work of our bipartisan advisory committee finished long ago, here are two recommendations we made that are worth revisiting even as U.S. State Department and USAID budgets are possibly reallocated and reduced.

First, we recommended providing advanced training and professional development opportunities for U.S. Foreign Service Officers who are public affairs officers and have responsibility for public diplomacy and cultural diplomacy through their careers. This would include particular attention to upgrading their ability to use research, polling, and new media, including social media. This cannot be “your grandfather’s State Department.”

Second, we recommended expanding international cultural exchange programs. We sought to underscore the power of open, not closed, doors. At that time, we focused on inviting more Arab and Muslim artists, performers, and writers to the United States, and sending their American counterparts to the Islamic world.

Today, the need for smarter, enhanced U.S. engagement extends around the world, including to the Asia and Pacific region. As China continues to militarize “islands” it builds in the South China Sea – through which much of U.S. trade with the region transits – an opportunity exists for the United States to positively raise its profile through diplomacy as a more responsible power and partner in the region.

Enhancing Security through Cultural Diplomacy

Back in 2005, the advisory committee wrote that “cultural diplomacy can enhance our national security in subtle, wide-ranging, and sustainable ways,” and underscored that such diplomacy efforts require a generational commitment of funds, expertise, courage and time. Those words still ring true.

In 1848, the British statesman Lord Palmerston is said to have commented that nations have no eternal allies or permanent enemies, but only eternal and perpetual interests. Working to win the hearts and minds of reasonable people everywhere remains very much in America’s interests.

Certainly, the challenges of budgets and bureaucracy remain, but it is time for the United States to recommit to diplomacy – cultural, commercial and educational. As Trump and Tillerson disrupt the staid halls of the U.S. State Department, there should be no ignoring that robust, strengthened diplomacy is good for American security and also makes long-term economic sense.

Mexico: Off to the Races

June 2, 2017

Antonio O. Garza (U.S. Ambassador to Mexico, 2002-2009)

Cross posted from Ambassador Garza’s website

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The U.S.-Mexico relationship is once again back in the headlines and this time it’s not just changing, it could be completely redefined. After months of anticipation, U.S. Trade Representative Robert Lighthizer submitted a two-page letter to Congress on May 18th, which announced the Trump administration’s intent to renegotiate NAFTA. The letter spurred the U.S. government into action, triggering the start of a consultation process—where businesses, industry groups, and private citizens can submit comments—and public hearings scheduled for later this summer. By early fall, negotiators from all three countries will begin sitting down together to hash out the details, with the goal of wrapping up the negotiations in early 2018.

To put it simply, reshaping NAFTA—an agreement that underpins over a trillion dollars in trade and that touches every major sector of the three countries’ economies—in only a few months is remarkably ambitious. While Mexican officials would like to end the process before the start of their presidential campaign cycle in early 2018, delays seem not just likely but inevitable. Throughout the process, expect to see a renewed focus on the trilateral relationship, which we are already witnessing through cross-border events and publications, as civil society groups and businesses seek to share their opinions and insert them into the negotiations.

However, while the upcoming NAFTA negotiations might be tough, the even more game-changing process in Mexico is going to be tackling the country’s rule of law challenges. On this front, 2017 has been a grim year, with setbacks for the recent anti-corruption reforms, fugitive corrupt governors, and the highest homicide rate for a first-quarter in the last two decades. Among those killed since January were six journalists, a particularly dark stain on an already bleak record. As I wrote for USA Today earlier this week, making improvements in protecting journalists and human rights defenders is not just going to be good policy, it will be the substance of strong leadership and presidential legacy.

Finally, for those of you keeping an eye on Mexican politics, this Sunday, June 4th marks the governor races in the State of Mexico, Coahuila, and Nayarit. Of the three, the State of Mexico race is the one to watch, as President Enrique Peña Nieto’s PRI party has not lost the state in a century. The latest polls, however, show the PRI candidate Alfredo del Mazo to be neck and neck with the leftist Morena candidate Delfina Gómez. While the PRI’s success at holding the state and Morena’s ability to pull in voters with its anti-corruption, populist message is expected to provide a sneak-peek for next year’s presidential elections, the fact that the race is so close (after the PRI won this governorship by 20+ percent in previous years) is already a strong indicator of the state and country’s political mood.

Treat Mexico as a Strategic Partner

February 21, 2017

John D. Negroponte (Mexico, 1989-1993)
James R. Jones (Mexico, 1993-1997)
Jeffrey Davidow (Mexico, 1998-2002)
Antonio Garza (Mexico, 2002-2009)
Carlos Pascual (Mexico, 2009-2011)
Earl Anthony Wayne (Mexico, 2011-2015)

An edited version of this piece appeared in The Washington Post.

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Mexico is of enormous importance to the United States. We have strong strategic interests in a relationship of respect and collaboration with Mexico while we work through differences on trade, security, and migration.

US-Mexico relations touch the daily lives of more Americans than ties with any other country, whether through culture, commerce or travel. US prosperity and the security of our homeland are deeply affected by the type of relationship we have with our southern neighbor.

Much can be improved between Mexico and the US for the good of both countries, but tackling these challenges need not be a win-lose proposition. Both countries can gain security and prosperity. Reviving the animosity and “distance” that characterized our relationship in the seventies or eighties is dangerous and runs counter to our interests.

The six of us have served as U.S. Ambassadors to Mexico, managing the ever-improving relationship across Democratic and Republican administrations since the late eighties. We have seen firsthand the strategic value of working cooperatively with Mexico to tackle common problems, including crime, terrorism and global economic competition. Along the way, Mexico has become a more democratic and prosperous country, making it a better and more reliable partner.

We are now deeply concerned to see this foundation shaken. Public attitudes in both countries are being soured by exaggerated public accusations. Mexicans believe that their national “dignity” has been insulted. Champions of closer cooperation with the US are on the defensive. Nationalist voices are gaining traction. This is not in America’s long-term interest.

The United States and Mexico started our modern journey to closer partnership with the 1993 North American Free Trade Agreement. Collectively, the six of us have worked through every stage of NAFTA. This is not a perfect agreement, but neither is it the job killer some have construed. Since NAFTA was signed in 1993, U.S. jobs linked to trade with Mexico grew from 700,000 to 4.9 million. The value of our two-way trade has grown six fold, reaching $584 billion in 2015. Mexico is now the second largest market for US exports, larger than our exports to China, Japan, and Germany combined. Mexico is the third largest buyer of US agricultural products. We build many things together, with parts crossing borders in both directions – so much so that finished Mexican manufactured exports were found to have 40% U.S. content.

US jobs moved to Mexico, but others were created by NAFTA. A 2013 study estimated that the US is $127 billion richer each year because of extra NAFTA trade. New studies have made clear that the big causes of US manufacturing job losses are automation and trade with China, not NAFTA. NAFTA can be improved to help boost the US economy in such areas as “rule of origin,” services, e-commerce, border inefficiencies, and labor standards. Those are the issues that should be negotiated based on facts to strengthen a long-term relationship that makes both countries more competitive.

Energy deserves special mention. Under NAFTA, Mexico’s nationalized energy sector was still off limits to US companies. In 2013, Mexico opened investment and trade in oil, natural gas, electricity, renewables, and refined fuels to US and other companies. Today, the US exports more natural gas and gasoline to Mexico than to any country. In December, major US companies won licenses to develop Mexico’s oil reserves, while others are partners in new pipelines. These openings make North America more energy secure.

The US deficit with Mexico gets more public attention than it deserves. Mexico represents 8% of our deficit. Our deficits with China, the EU and Japan are larger. The deficit with Mexico declined by over 40% between 2010 and 2015, even as our trade grew 35%.

A sharp point of contention has been over the border wall and migration. The great irony is that today there are 1.1 million fewer undocumented Mexicans in the US than in 2007. Apprehensions of Mexicans at the border have reached the lowest levels of this century. Mexico has joined us to manage the surge in migrants from Central America, deporting over 165,000 from its southern border in 2015, more than the United States did. Publically demanding that Mexico pay for a wall that Mexicans don’t think is needed has fueled anti-American nationalism. That limits the capacity of Mexico’s government to work with us to find solutions.

Common borders also made Mexico and the United States partners in national security. Ever since 9/11, Mexico and the US have worked closely to stop potential terrorists from entering the US. We also work to improve the fight against illicit trafficking. The trafficking of heroin and other drugs into the US and the smuggling of weapons and drug profits into Mexico fuel violence, corruption, and deaths in both countries. Still, during the years of our collective service, law enforcement officials have built trust, competency and legal channels to act against criminal networks. That cooperation needs to be strengthened, not undermined.

Together, the authors have witnessed profound and positive changes in the US-Mexico relationship over the last quarter century. We urge that the US engage in serious, fact-based negotiations over differences on trade and other issues. Intimidating or denigrating remarks make it harder to reach outcomes that support American economic and security interests and fuel anti-Americanism in Mexico. Workers, companies, and communities of both countries will prosper with a long-term strategic partnership between the US and Mexico. Let’s keep building it.

Summer Doldrums. Not Quite.

August 3, 2016

Antonio O. Garza (Ambassador to Mexico, 2002-2009)

Cross-posted from Ambassador Garza’s August 2016 newsletter.

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It should be the summer doldrums, but the news out of Mexico hasn’t quite slowed down.

One of Mexico’s biggest stories was the debate, passage, veto, and then re-passage of the country’s anti-corruption package. These seven bills were designed to put legislative meat on the bones of the 2015 anti-corruption reform, and will greatly assist in coordinating corruption fighting across government institutions. The final package stopped short of embracing every part of the civil society written and backed Ley 3de3 (which would have forced government officials to publicly declare their assets, conflicts of interest, and tax records), but it did create what has been called “the most encompassing system to identify and sanction corruption that the country has ever had.”

In more welcome anti-corruption news, the Peña Nieto administration filed legal challenges this month against the governments of Veracruz, Quintana Roo, and Chihuahua for reforms that would have shielded outgoing governors from corruption investigations. These states are facing federal inquiries over financial irregularities under the governors’ tenures. And in the case of Veracruz, for at least twenty-six phantom companies that received some US$1 billion in unaccounted funds. (more…)

More Uncertainty but Message Clear: “Fix It”

July 5, 2016

Antonio O. Garza (Ambassador to Mexico, 2002-2009)

Cross-posted from Ambassador Garza’s July 2016 newsletter.

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This past January, I wrote that the coming year would be one characterized by our “Living with Uncertainty”. Looking back, while it was clear that this year would be tumultuous, I certainly misunderestimated what was to come.

It’s hard not to start with Brexit, when 52 percent of the United Kingdom’s voters chose to break with the European Union.  The vote marks the first departure from the grand European project, tacking an uncharted course for the United Kingdom and for the continent. But the contentious vote was really the easy part. The next two years will be filled with the tougher steps—sitting through painful negotiations, designing a brand new state framework, and calming jittery markets that are concerned with the future of both the United Kingdom and a strong and peaceful Europe.

The anger is not just a United Kingdom and United States phenomenon; voters around the world are frustrated. And Mexico is no exception.

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Mexico’s energy reform to attract international interest

August 11, 2014

Antonio O. Garza (Ambassador to Mexico, 2002-2009)

Cross-posted from Ambassador Garza’s August 7, 2014 special to the Houston Chronicle.

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With final Congressional approvals now in place, Mexico and President Enrique Peña Nieto can begin celebrating the passage of the secondary legislation necessary to codify last year’s constitutional amendments that opened the energy sector to private investment. The confetti will have barely hit the floor when the focus must necessarily turn to the crucial implementation period when the institutional and market architecture must go from blueprints to the hard work of build out.

The December 2013 constitutional reform ended the monopoly of the state-owned energy company Pemex and introduced private investment into every segment of Mexico’s hydrocarbon sector. It also gave regulatory authority to a new set of autonomous, independently funded entities that will oversee licensing, safety and environmental protection. Additionally, the reform required that Pemex be transformed into a “state productive enterprise” and established the Mexican Petroleum Fund, under the purview of the Central Bank, to manage contract payments and oil revenue.

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The future motor of the world economy: India

November 20, 2013

Richard W. Carlson (Ambassador to the Seychelles, 1991-1992)

Cross-posted from Ambassador Carlson’s November 16, 2013 op-ed in The Tribune-Review.

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Growth in India has averaged about 8 percent a year for the past decade. Millions of Indians have moved to big cities from towns and villages and, by dint of intelligence, hard work and education, have joined the middle class.

After independence from Britain in 1947, India embraced socialism with its stultifying bureaucratic regulations, wasteful inefficiencies and interventionist policies.

In 1991, the year the USSR, its longtime ally and supporter, collapsed and died, it threw off its planned economy and adopted the principles of the free market, including expanded international trade. India tried to slow down its waste of capital and labor and get out of the way of small manufacturers. The economy took off like the recent Indian space shot to Mars.

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Mexico: A Push for Reform

November 7, 2013

Antonio O. Garza (Ambassador to Mexico, 2002-2009)

Cross-posted from Ambassador Garza’s November newsletter.

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Later this morning, I’ll be headed north from my Mexico City office to Texas in order to appear with Mexico’s Secretary of Economy Ildefonso Guajardo and North American Development Bank president Geronimo Gutierrez at a U.S.-Mexico High Level Economic Dialogue forum in San Antonio. I’m sure among the things we’ll talk about is the reform push currently underway in Mexico.

Nearing his one-year anniversary mark, President Enrique Peña Nieto has amassed an impressive list of accomplishments, including labor, telecommunications, financial and education reforms. Fiscal, energy and political reform measures also have been wending their way through the legislative process, generating heated debate as political leaders and competing interests wrangle over specifics of the proposed bills. Duncan Wood, via the Wilson Quarterly, offers an overview of this year of ambitious reforms, with an emphasis on the all-important energy overhaul. For an interesting (if perhaps too tempered) take on Mexico’s prospects for true reform under a PRI president, published in the World Affairs Journal, read here. The many unknowns surrounding the major pieces of reform legislation in Mexico means there will be much to watch in the weeks leading up to the close of the Congressional session on December 15.

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20 percent women, 100 percent effective

October 23, 2013

Swanee Hunt (Ambassador to Austria, 1993-1997)

Cross-posted from Ambassador Hunt’s October 18, 2013 special to the Global Post.

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Senator Patty Murray, D-Wash., once said her experience as a preschool teacher was excellent training for Congress.

As many on Capitol Hill are mugging for the press pool, proud of their political brinkmanship, a small group of female senators (Republicans Susan Collins, Kelly Ayotte and Lisa Murkowski, and Democrats Amy Klobuchar, Heidi Heitkamp, and Jeanne Shaheen) stands to the side, immune to the “me, me, me” fest. Led by Sen. Collins, R-Maine, their strategic collaboration with a handful of male senators led to a deal to reopen the federal government and save the US from a first-ever default.

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Ambassador Stephenson on his Trip to Israel

October 22, 2013

Thomas Stephenson (Ambassador to Portugal, 2007-2009)

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As I write, I am flying back from four days in Israel during which time I participated in a series of meetings with current, and several former, senior military, intelligence, and government leaders. None of the meetings were for attribution, but I thought it would be interesting to address the questions posed (How does the government shutdown impact US foreign policy and US credibility abroad? How significant is the recent shift in US-Iran relations? What do you expect will result from the recent agreement between Secretary Kerry, Russian Foreign Minister Lavrov, and the Assad regime regarding the disarmament of Syria’s chemical weapons?) in the context of Israel’s precarious position with regard to most of the issues raised, and the gist of what we heard and observed regarding these issues while there.

There was concern expressed about the impact on Israel and our other trading partners of our government shutdown and potential debt default (fortunately, an agreement to kick the can down the road a few months was reached the day after our meetings concluded). Several of the people with whom we met expressed concern about the potential impact of shutdown and sequestration on our military capabilities, the dollar as the world’s reserve currency, and the extent to which world financial markets and international trade have been roiled by our failure to find a solution. There is no doubt relief in many corners of the world that we have at least an interim solution.

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