Chairman Kolbe's Remarks at SID Event

CHAIRMAN KOLBE'S REMARKS AT SID EVENT

Rep. Jim Kolbe (R-AZ) was honored last evening at the Society for International Development's 2006 Annual Gala Dinner. The tribute included remarks from former Congresswoman Susan Molinari, former United States Trade Representative Carla Hills, Congressman David Obey, Congresswoman Nita Lowey and the Director of National Intelligence, Ambassador John Negroponte. Chairman Kolbe's acceptance speech discussed the fundamentals to sustaining successful international relations: health, trade and governance. Included below is the full text of the prepared speech.

Thank you very much. What an introduction, and what an honor. As Lyndon Johnson said, I wish my parents could have been here to hear that: my father would have enjoyed it, and my mother would have believed it. That's the advantage of retiring from Congress: for a whole year, people only have nice things to say about you. It's like attending your own funeral, but without the price of admission.

I want to thank President Shaikh for his kind words. Ambassador Negroponte, Nita, David, my good friends Carla and Susan - thank you so much for being here. I'm thrilled to see so many friends and colleagues tonight.

I feel a great responsibility addressing this audience. So many of you directly improve the lives of the world's poor, notably the three billion people on this Earth who live on less than $2 a day. In Congress, I help determine how much assistance America provides, but you are the ones who implement it, who make it work. If experience has taught us anything, it's that implementation is at least as important as funding. So while I am honored by this award, I'm even more honored by your presence.

I have no doubt that everyone here tonight is convinced of what's at stake in the economic growth of developing countries. Here, I do not have to argue the case for foreign assistance, nor do I have to persuade you that it is vital to global stability. While I regard it as a challenge to justify foreign aid to skeptics, I'm happier to speak with those who have no need for such justification.

But when everyone has the best intentions - as all of us do in this room - it's incumbent to take a dispassionate look at our efforts, to "cast a cold eye," as Yeats wrote, so that good intentions are not confused with good works. We've made genuine strides against global poverty, and with those strides have grown our expectations. But are our priorities, are our policies, a match for our ambitions? That is the question.

So tonight I'd like to talk about where we are, and where I think we're headed. To do that, it helps to understand where we have been. History is not considered enough by lawmakers when making public policy. That's especially true in development. We need to consult the past to have an idea of what works for the future. And frankly, we need to look more closely at the successful courses charted by rich countries, including our own.

I think there are three primary issues at the heart of global development: health, trade, and governance. Little else will matter if we don't succeed on these fronts. Trends on the development agenda will come and go, but the fundamental significance of health, trade, and governance will endure. It will endure because our experience teaches that nothing else is more potent for economic growth. I judge my career in development based on how we've dealt with these issues, and I have no doubt that others will, as well.

So let me begin with health. At the turn of the 18th century, the richest part of the North American continent was almost certainly Mexico, brimming with gold and silver - unimaginable riches for the Spanish monarchy. Just a few decades later, an abundance of first-rate farmland helped give American colonists the highest standard of health and living anywhere. An ocean away, smallpox inoculation and the retreat of malaria helped make England more populous, more productive, gave it the critical mass to set the Industrial Revolution into motion. And in Asia, a doubling of Japanese food production was paving the way for the Meiji Restoration, perhaps the most astonishing example of modernization in history.

In short, health makes everything else possible - productive workers, urbanization, technological progress. That's true for rich countries that used to be poor, and it's true for poor countries today. It is why, over the past six years, our foreign assistance bill has spent an increasing amount shoring up public health around the world. That increase marks the defining change in our spending priorities during the last six years.

This year, we're recommending nearly three and a half billion dollars to battle HIV/AIDS. Another $2 billion will go to the Millennium Challenge Corporation, rewarding developing countries that make investments in their people. Four hundred forty-five million dollars will also go to the Global Fund, double the amount of the President's request.

There are humanitarian reasons for this spending, not least the decimating consequences of AIDS. But the humanitarian imperative cannot fully explain our commitment to fighting disease. We're committed because disease jeopardizes every other effort to increase growth in developing nations. When the income of malaria-infected countries is less than a fifth of non-malarial ones, it's plain that tropical illness should be a fundamental priority. When life expectancy in much of Africa barely exceeds 50 years, it's plain that entire societies are being cheated of productive years.

And then there is self-interest. Infectious diseases stifle markets and hobble our own economic potential abroad. They limit the world's economic growth, and consequently our own. If you doubt that, imagine what an avian influenza outbreak in Asia might do to our economy. And our self-interest doesn't stop there: fighting this suffering boosts America's standing around the globe, at a time when we need as much goodwill, as many allies, as possible. No other action contributes more to our moral leadership; no other action draws more admiration from other nations and other people around the world.

That's the key to funding global health in the long term: we have to make it inseparable from our own economic prospects, inseparable from our national security itself. Congress may flirt with compassion, but it is wedded to self-interest. If global health is not a permanent part of a national strategy, the funding increases we've achieved will not be permanent either.

Some may hesitate to appeal to U.S. interests in this way. They may find it distasteful, or they may just find it beside the point. They're wrong. When I was a freshman Congressman in 1985, the chairman of the subcommittee I now oversee - a Wisconsin appropriator named David Obey - held a series of hearings on foreign aid. The recurring theme of those hearings was that global development brought tangible, real benefits to our doorstep. They also demonstrated that Congressional support for foreign assistance is strongest when we perceive the payoff for ourselves. That was true two decades ago, as it will be two decades from now. So, we mustn't forget self-interest. We must never shy away from touting the good that comes to us by fighting disease abroad.

When all the aid dollars are distributed, we will still be staring in the face of abject poverty. Development must be spurred by trade between peoples and nations. No amount of aid can alter that stark truth.

When I started to chair the foreign operations subcommittee - this was five years ago - there were no more than 20,000 telephone lines in Afghanistan. You could not make international calls, and frankly, there was no need. Afghanistan was one of the most destitute places on Earth.

Today, 1.3 million Afghans are using cell phones, with more to come. If you believe this change is positive - as I most certainly do - then you are on the side of trade. You're on the side of trade because a business in Kabul will now be calling an exporter in Peshawar, trying to arrange the delivery of Chinese goods to a store in Herat. You're on the side of trade because a farmer outside of Kandahar will negotiate better prices for his crop, using a phone assembled in South Korea, and sold by a firm in Finland.

Afghanistan proves the precept: long-term growth is impossible without trade. America, Britain, Germany, Japan - no developed country has grown wealthy by turning its back on foreign markets. The developing world is learning this, and the results are little short of astounding.

Just consider: according to World Bank economists David Dollar and Aart Kraay, the developing countries that have opened to trade the most have outperformed all other economies. In the 1990s alone - this is excluding the East Asian tigers - the GDP of poor, but open, countries increased at twice the rate of rich nations.

Why is that important? Over the course of two decades, that rate of growth translates to a 16 percent decrease in extreme poverty for Bangladesh, a 23 percent drop in Costa Rica, a 25 percent drop in mainland China. Millions of human beings were spared a misery we can't fathom, and greater trade played a vital role.

Similar findings have come to us from Harvard's Jeffrey Frankel, not to mention Jeffrey Sachs and Professor Baghwati at Columbia. Of course, another well-known economist preceded their empirical conclusions with his own ideas. Just 230 years ago, Adam Smith argued that prosperity hinges on trade.

If I dwell on this argument for trade, it's because there is no choice. Over the past three decades, the two largest nations on Earth have joined the global economy. China sextupled its share of world trade and grew around 8 percent a year. India opened itself and virtually slashed its poverty rate in half. Yet still we find opponents to more open trade on both sides of the aisle in Congress.

Let me be blunt: it is a contradiction to restrict trade while championing development. The data can't support it, our own eyes can't support it. Opponents of freer trade are on the wrong side of history.

That's why my subcommittee is making the link between trade and economic growth explicit. In my subcommittee mark last week, I announced the creation of a Trade Capacity Enhancement Fund, a $522 million initiative. Based at USAID, this Fund will bring together existing trade capacity initiatives under a single umbrella. The fund will help developing countries carry out free trade agreements, and work with others to qualify for agreements in the future.

I believe this is the most significant change in foreign assistance accounts in a decade. We should organize government institutions to truly reflect their mission, and that is what this Fund will let us do. It gives trade the prominence it deserves at our largest development agency. It allows trade to take its rightful place among our foreign assistance programs. With over half a billion dollars, the Trade Capacity Enhancement Fund will draw on a budget almost four times larger than that of the World Trade Organization. It marks the acceptance of trade as an indispensable tool for development.

Trade leads us naturally to the subject of governance. When I lobbied my colleagues last year for the Central American Free Trade Agreement - one of the most contentious FTAs we've negotiated - it wasn't just for the economic benefits that CAFTA confers on all parties. Those benefits are certainly real. In the increasingly globalized world we live in, any opportunity to promote investment and create jobs is welcome.

But, the real gain we'll have from CAFTA is a freer, more future-oriented Central America. It serves as a powerful antidote to the ideological poison of Hugo Chavez. It means having a counterexample to backward policies that some in Latin America too often flirt with - policies that cripple economies, send poor migrants north to our border, and ignite anti-Americanism among those left behind.

The implications for aid to CAFTA countries should be clear. They're clear for any country that embraces pro-growth policies. Now the chances grow that aid will go to productive uses, not be wasted on populist nostrums that wreck the lives and hopes of people. The chances grow that future assistance will reinforce sound economics, rewarding accountable governments and their reforms.

This was also the founding principle of the Millennium Challenge Corporation. If the MCC is successful - and I believe it will be - we'll no longer waste Americans' money on kleptocrats and populists. We won't endanger political support for international development, spending taxpayer dollars with no return. Instead, we'll offer incentives for countries to be accountable for their own future. We'll offer real carrots, and we'll wield real sticks.

I claim no special insight when I say that developing nations guide their fate. Return, again, to David Obey's foreign aid hearings two decades ago: you'll find a consensus that aid recipients had ultimate responsibility for their growth - or lack thereof. The difference today, I believe, is a willingness to truly stop assistance if it is futile, unencumbered by Cold War compromises. It's a mistaken belief that the developed world does any favors by simply throwing good money after bad. In fact, we do the opposite.

So if we're more confident, more knowledgeable, about where our foreign assistance should go - if we're putting the right organizations and programs in place - what remains to be done by those who care about global development?

It seems to me we need to concern ourselves less with the actual size of the foreign aid budget. I know there are many here tonight - all of us, perhaps - who are less than fully satisfied with the money the House provided this year. We did, in fact, increase spending by almost 3 percent, but it's little comfort given the magnitude of the demands.

But here is the really sobering news: there will soon come a time when three percent increases seem like a golden age. Don't forget that the House has had to reduce the EPA, the Forest Service, and the Department of Interior. There's a reduction to the subcommittee in charge of the Department of Energy. There will not be a significant increase for the Department of Labor, HHS, and the Department of Education.

Let's ask ourselves honestly: will foreign assistance remain immune from such treatment? Will future Congresses continue level-funding - or even reduce - NIH, while supporting millions for family planning abroad? Will they slow the growth of spending on veterans' health care while increasing the accounts for the MCC? Not likely. We do ourselves a disservice by thinking of foreign aid in a vacuum. In fact it competes against hundreds of popular programs, year after year.

All bets are off when the Baby Boomers start to retire two years from now. Whatever you think of entitlement programs, it's undeniable that Medicare, Medicaid, and Social Security will slowly squeeze the life out of discretionary spending like foreign assistance. They will threaten its very existence.

In fact, they're already doing that. When I graduated from college, discretionary spending - the kind we actually control each year - made up two-thirds of the federal budget. By the time I entered Congress, less than half was discretionary. It has now shrunk to less than 40 percent, and will make up less than a third of the budget within the next ten years.

We must find a way to meaningfully, compassionately reform and restructure these entitlement programs so we can meet other obligations at home and abroad.

But we must also find a way to restructure our assistance programs so they are more effective, more dynamic. We must make the dollars stretch further, we must be ruthlessly honest in assessing what works and what doesn't. We must have the courage to end programs that don't work, and the courage to vigorously defend those that do.

If you agree with this proposition, you cannot remain silent. You will have to raise your voice, for few other people will. You'll have to go beyond the usual confines of development advocacy. You'll have to take a stand on issues that may only seem tangential to foreign assistance - but which, in fact, are central to its future.

We've much to be proud of in the fight against global poverty, but we also have much left to do. I know you'll all be leading the way, and wherever I find myself in the years ahead, I will be at your side, a loyal soldier in the fight to improve the lives of people all around this world.

Thank you again for this great honor.

http://www.house.gov/apps/list/press/az08_kolbe/sid_05252006.html