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Empowering Women--Promoting Growth

Henrietta H. Fore, Acting Director of U.S. Foreign Assistance and Acting USAID Administrator
Remarks at "Empowering Women--Promoting Growth" Event
Washington, DC
October 19, 2007

[ As Prepared ]

Thank you all for joining us. We meet today in a historic place. The Washington Club was the first women's organization to be incorporated in the District of Columbia--a fitting venue for our discussion this morning on how the empowerment of women not only promotes economic growth, but sustains it.

As I look around the room, I am delighted to see many familiar faces. For those whom I have not had the opportunity to meet, I am Henrietta Holsman Fore, the Acting Administrator of USAID and Director of U.S. Foreign Assistance at the Department of State.

We gather today to highlight three critically important themes: the fundamental importance of economic growth to development, the primacy of business climate reform to sustained economic growth, and the significant role business climate reform plays in the empowerment of women across the developing world.

Before we delve into these themes, let me begin by extending a special welcome to Her Excellency Dr. Antoinette Sayeh, Minister of Finance of Liberia, my colleague Lars Thunell, Executive Vice President and CEO of the International Finance Corporation, and Simeon Djankov, manager of the Doing Business project and author of the Doing Business series.

I am also pleased to welcome a number of my colleagues from U.S. Government agencies here, as well as many representatives from leading women's organizations, and from the diplomatic, NGO, and think-tank communities. Thank you all for coming.

It is a tremendous pleasure for USAID to join the World Bank and the International Finance Corporation in presenting the results of the 2008 Doing Business report.

Now in its fifth year, this report provides objective, annually updated, and globally comparable rankings of 178 economies. It measures the extent to which government regulation works to enhance or constrain private-sector growth, based on ten indicators of business regulation that track the time and cost to meet government requirements in business start-up, operation, trade, taxation, and closure.

Doing Business is important because economic growth is fundamental to all of our goals. Rising income is critical to transforming the developing world. Economic growth produces jobs that generate income, and economic growth is essential to reduce, and eventually eliminate, extreme poverty.

Economic growth also provides the only means for countries to generate the resources they need to address illiteracy, poor health, and all other development challenges on their own to break the cycle of dependence on foreign aid.

Among international donors, USAID and the IFC are particularly focused on private-sector development--helping people and enterprises of all sizes to "do business" successfully, while generating the jobs and incomes that drive economies forward.

I am particularly delighted to host the launch of Doing Business this year, because the 2008 report is introducing a new theme--women in business--a topic of tremendous importance to economic growth and social development.

As a former businesswoman, I know first-hand how difficult it is to grow and expand a business. I also know that my counterparts in many developing countries have the additional struggle of succeeding in a regulatory environment that seemingly thwarts their efforts at every turn. Yet, in the right environment on a level playing field, women can, and do, excel in the business world.

When women engage in business activity, they make a tremendous positive difference to their families, their communities, and yes, their countries. National economies are stronger, more stable, and more dynamic when women are engaged in the business world. This principle is one that is broadly recognized as key to sustained economic growth.

The World Economic Forum, for example, has found a clear correlation between sex equality and GDP per capita, noting that "the under-utilization of women stunts economic growth." According to The Economist magazine, "the increase in female employment in the rich world has been the main driving force of growth in the past couple of decades. Those women have contributed more to global growth than have either new technology or the new giants, China and India."

Women, more easily than men, can be kept out of the formal economy by poor business regulation. In fact, the Doing Business team found that regulations can be particularly burdensome on women, who often start out with less opportunity and economic power.

In contrast, the payoffs from reducing the burdens of business regulation especially benefit women by facilitating their entry into the formal economy. When women join the formal economy, they increase the tax base and invest in their families, particularly in the education and health of their children. They drive economic growth. One of the three additional research topics to be reflected in future Doing Business reports will be on the regulatory reforms that are most important to women's opportunities for full participation in the formal economy and the growth of the global economy.

Dramatic change is possible when we work together to support reformers. USAID and the World Bank Group have enjoyed a long, fruitful partnership addressing business environment reforms.

In the 1990s, we worked closely with the Foreign Investment Advisory Service (FIAS) to develop the Investor's Roadmap Studies that pioneered a new approach to investment reform by looking at problems from an investor's perspective. Starting in Ghana, USAID and FIAS developed Roadmaps around the world. This practical, private-sector focus led to simplification of processes and regulations in numerous countries. USAID projects were the vehicle in many countries that converted these studies into successful reforms.

The information generated by the Roadmaps helped to inspire the Doing Business studies. Simeon Djankov was able to take this mass of technical information and transform it into an approachable framework for policymakers. Simeon and his team have produced an outstanding product in the Doing Business series. These annual reports have directly inspired more reforms, studies, newspaper articles--and even complaints--than any tool the development community has used in a very long time. And we at USAID are proud to have assisted with funding and support along the way. Details on the reforms are documented in the 2008 Doing Business report, and in a joint case-study publication newly launched by the World Bank and IFC and USAID.

Over the past couple of years, we have continued to expand on this partnership, including working with the Doing Business team to pioneer sub-national benchmarking in a variety of countries and regions--such as Mexico, Brazil, Ukraine, Morocco, Colombia, Egypt, Southeast Europe, and Central Asia, among others. USAID has a marvelous working relationship with the World Bank and IFC. We have also had the opportunity to work with some impressive developing country reformers who have demonstrated the radical transformation that is possible with committed leadership. The World Bank's Doing Business rankings have become a wonderful tool to inspire reform and to quantify and document reform successes.

Regulatory reforms are often politically very contentious, so we need to collectively recognize those committed leaders with the vision, energy, and direction to improve their business climates.

USAID and the World Bank hosted a Doing Business "Reformers' Club" this past April which inducted its first members, with Georgia receiving top honors, and Georgia has not slowed down one bit, earning recognition as a top five reformer for the third consecutive year. In terms of the number of reforms implemented, Georgia has led all other countries during the past two years, and moved from a worldwide rank of 100 to 18 during this period.

This represents the first time any developing country has broken into the top 25 ranking since the Doing Business Survey started publishing country rankings. For this most impressive accomplishment, we offer our congratulations. It has been a privilege for USAID to play a supportive role in Georgia's reforms, which demonstrate that dramatic change is within reach.

Let me also congratulate a number of the other top reformers with whom USAID has been proud to partner.

This year, Egypt is the top reformer worldwide. Egypt's broad and deep reforms include the establishment of a private credit bureau, and streamlined port operations. Important new reforms assisted by USAID should raise Egypt's ranking in ease of paying taxes in future years. USAID is proud to have offered our technical and financial assistance to the Government of Egypt in implementing those reforms.

Bulgaria reformed procedures for licensing, taxes, and contract enforcement. USAID partnered with the government of Bulgaria in funding the establishment of the first 40 one-stop-shops for administrative services; currently 140 such centers operate in Bulgaria.

Bulgaria has also introduced fundamental reform in the judicial sector, including introduction of private bailiffs and incentives for efficiency, an effort USAID was proud to support. Collection of claims in Bulgaria is faster, more efficient, and requires less state subsidy. I was pleased to visit Bulgaria earlier this month to acknowledge their graduation from USAID assistance. In less than two decades, Bulgaria has undergone a remarkable transformation from a highly centralized, communist state, to a democratic, free-market member of the European Union and NATO.

Also in Eastern Europe, Croatia is recognized as a top-reformer for the second consecutive year using a systemic "regulatory guillotine" approach to eliminate or simplify hundreds of individual regulations over a period of less than nine months. Similarly, Macedonia established one-stop shops, reducing the time to register a company from over a month, to as little as three days, and improving communication between customs and the business community. USAID is proud to have played a supportive role in those reforms.

Colombia is a top-reformer, and the leading reformer in Latin America. The United States has been pleased to support Colombia's transformation to a thriving democracy, and more specifically, to have assisted in the key areas of reform commended in the 2008 report: protecting investors, paying taxes, and trading across borders.

In Africa, Ghana is a repeat top-reformer that, among a number of other reforms, has moved aggressively to streamline trade. USAID continues to support Ghana's reform leadership, as well as providing technical assistance in facilitating more efficient trade corridors throughout West Africa. Kenya is highlighted as the second African top-ten reformer this year. Kenya's reforms to improve the business climate have included, with USAID technical support, the establishment of a one-stop border post that significantly reduced customs clearance time.

The pace of reform around the world, including in Africa, remains rapid, with dramatic reforms that will be documented in the 2009 Doing Business report already underway. The government of Senegal, with support from USAID and the World Bank, has collaborated on a program that has reduced the number of days to start a business from 58 to 2!

While we have much to celebrate, it is also true that there are countries whose people are struggling to escape poverty. With the notable exceptions of such top reformers as Ghana and Kenya, it is particularly true in Sub-Saharan Africa, where economic stagnation represents lost opportunities, growth, and revenues; and holds back women and men whose productive capacity is inhibited by burdensome regulations.

The point is that we can do something about it. This program can offer hope and opportunity for growth, greater freedom, and achievement. The trend is positive. This room is filled with people who can ensure that this trend continues, and that the opportunities for economies to grow that are created by business climate reform are open to all citizens in the developing world, men and women alike. Working together, we have the power to do this.

Thank you.



Released on November 6, 2007

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