Transformational Diplomacy in the Western Hemisphere

Good morning to all of you, and welcome to the State Department, and especially welcome to President Vasquez. We are very happy to have you here, sir, and we are delighted that you and your team are in Washington, and we look forward to your meeting with the President.

This is an important day for us, and it’s obviously an important day for all of you. It’s a great opportunity for us to have the Council here at the State Department throughout the day and to have an opportunity to talk with all of you – enter into a dialog with all of you – about something that we all share in common – a deep interest in the Americas and a deep interest in this hemisphere. Again, I thank you all for taking the time to be here today and I thank you all for giving me the opportunity to speak.

And of course, I want to extend a special thank you to Bill Rose, to Susan Segal, and to Eric Farnsworth. Not only for the hard work that they’ve put into this Council, but also for their commitment to the Americas, but also for their willingness and their openness to work with us and to maintain open channels of communication with us as we operate in a hemisphere, which, from our point of view, is increasingly important, but also faces challenges that are in some instances dramatic, but ultimately, the degree to which we faces those challenges is going to determine, not only the direction of this hemisphere. But I think, in a broader sense, the direction and success of the United States’ broader democratic agenda in the world.

I face a particular challenge this morning in that Secretary Rice will be speaking later, and I have to make sure that my remarks support her remarks and create a context for her remarks, but don’t usurp her remarks. And so I will do that, and I think one of the best ways of doing that is to begin by quoting her.

Shortly after she took over as Secretary of State, the Secretary, speaking at the Woodrow Wilson School of Public and International Relations laid out her vision for what she calls "Transformational Diplomacy." And she said at the Wilson School: "In ordinary times when existing ideas and institutions and alliances are adequate to the challenges of the day the purpose of statecraft is to manage and sustain the established international order. But in extraordinary times when the very terrain of history shifts beneath our feet and decades of human effort collapse into irrelevance, the mission of statecraft is to transform our institutions and partnerships to realize new purposes on the basis of enduring values."

In other words, "Transformational Diplomacy" is really about transforming institutions and partnerships and realizing new purposes, but doing so on the basis of enduring values. From our point of view, in the Bureau of Western Hemisphere at the State Department, and from our point of view in the Administration of President George Bush within the Americas there are enduring values.

In fact, from our point of view, the Americas have really been doing a kind of transformational diplomacy for several decades in terms of moving toward a democratic hemisphere and toward a hemisphere that trades freely and that is working toward economic integration both sub-regionally, regionally, and also more broadly in the Americas.

This is a project that is not just a project of United States and it is a product that is not just a product United States. Quite the contrary. It is a product and a project of the Americas. It is a product and a project that has been built from national experiences as countries in the region have sought to affirm human rights, create and protect civil liberties and political liberties, and to begin to address the broader issues of economic inequalities and social exclusion in the Americas.

And the ability of democratic leaders to shape a common agenda for the hemisphere is significant. We recognize, and I’ll talk about this momentarily, that in some ways this consensus is being challenged today. But, if you look back at the Québec city Summit of 2001, the leaders of the hemisphere were able to emerge from that Summit – with all the demonstrations taking place outside – with a commitment to democracy, a commitment to negotiate the Inter-American Democratic Charter, a commitment to the Free Trade Area of the Americas, with both a hoped for conclusion and implementation date, and also an instruction to ministers to develop and create new policy tools and means to build personal capacity, to take advantage of economic opportunity, and to build national infrastructure to create the national capability to take advantage of economic opportunity, and to reshape a hemispheric security agenda.

And to recognize, that in a hemisphere that is becoming democratic, the central security issue is no longer an issue of state-to-state or military-to-military security, it is really how you face nontraditional threats, it is how you address organized crime, it is how you address terrorism, it is how you address gangs, it is how you address natural disasters and pandemics. In other words, it was a clearly laid out marching orders to foreign ministers, defense ministers, and ministerial staffs throughout the hemisphere to take this common agenda, to a take consensus built around democracy and prosperity and to begin to make it real.

The challenge that we have faced since then is making that agenda real and finding ways to ensure that this is a hemisphere that will be democratic, that will have the tools to be prosperous, that will be able to provide its citizens with the capacity and the ability to take advantage of economic opportunity and that will create a secure environment in which people can go about their daily lives, and countries can go about their economic business free of fear.

This agenda is ambitious. It’s dramatic. For us to be able to implement it successfully, it requires a degree of cooperation and collaboration, which at one level is daunting, but the same level the seeds of that cooperation and collaboration exist. And we have seen it in the Summit process that has followed it.

I’d be happy afterwards to talk briefly about the Mar del Plata Summit.

Even at Mar del Plata, I think we emerged with a much better understanding of where this region is in terms of economic integration, what it is capable of, and also what the future of that integration can be and should be.

As we move forward, as we attempt to consolidate this consensus and face the challenges, we recognize that as the hemisphere becomes democratic, as democracy is perceived and understood in the hemisphere as the only legitimate form of government, and as the hemisphere makes a commitment to free markets and economic integration, that we have created tremendous expectations; that our citizens are expecting results; that they are expecting to have access to their political systems and not to be excluded. And as they become political citizens, they are also looking for ways to become economic citizens and social citizens. They’re looking for accountability; they’re looking for responsiveness; and they’re looking for responsibility.

We understand and recognize that the challenges that many countries in the region face, as they attempt to meet this popular demand, is an institutional challenge. Are the formal institutions of government up to meeting these demands? Are political parties capable of being responsive and responsible? And, is civil society sufficiently developed to create a kind of connecting tissue between constituent bases of the political parties and formal institutions?

In other words, are the institutions of the region modernizing quickly enough, and evolving and adapting quickly enough, in order to face the political and economic challenges that the region faces?

The answer to that is both yes and no. It obvious in some parts of the region that things are going okay. But in other areas, things are not going okay. And they’re not going okay, largely because the institutions are struggling with this tremendous surge of popular expression.

This is one of the reasons why, in some parts of the Americas, but especially in the Andes, we’re seeing the emergence of a new Latin American populism. We have to be clear about this populism. In and of itself it is not an illegitimate or invalid political expression. Quite the contrary. It is a natural phenomenon in a democracy, where institutions are struggling to channel and direct political expression. It is a political phenomenon that we’ve experienced United States at several times our history.

It is also tremendous challenge to a state and the challenge to political institutions, because what it means is that they have to evolve, they have to change, they have to create the capacity to recapture this kind of political expression. And that requires political parties that are not clientelistic, not corrupt, that are open, and that act as facilitating mechanisms, and whose purpose again is not to control political activity, but to direct and manage it. It requires new connections with civil society, and it requires building civic traditions that bridge differences in society.

One of the interesting and striking aspects of the populism that we see in the Americas today, unlike the populism of earlier, which had a strong nationalistic base to it, is that the populism of today carries with it a degree of social resentment that is worrisome. But it is the social resentment that is the product of a perception and a belief that political elites and economic elites have not delivered, that they have stood apart from their societies, and have not found a way to make institutions work and to create an environment in which people can actually feel themselves to be economic and social citizens in their own country.

In this regard, I think the Americas is well-positioned to help countries who are facing this kind of challenge. In fact, the Americas is probably as well-positioned as any part of the world to help countries face this challenge, because we have institutions, in the Organization of American States, in the Inter-American Development Bank, and in other parts of the Inter-American system that can indeed work with states, work with governments, work with political parties, and work with civil society in order to create the capacity to evolve, to change, and to become responsive to the demands that are being placed on them.

This is an important part of the Inter-American Democratic Charter, which has at its base the knowledge or the commitment to help countries that are in democratic crisis, or a crisis of government, to create the tools necessary to allow the OAS and its members to show solidarity, to provide technical support, and to work with countries in the region to help them find ways through this difficult period of time.

As we move forward, we also need to recognize, and I’m sure all of you know this very, very well, that the Americas does not sit alone in the world, that it is part of a larger world, that it is part of an increasingly competitive global environment, and that the kind of economic decisions we are making throughout the Americas are going to have a tremendous impact on competitiveness of this region in the world, and especially the competitiveness of individual companies and markets.

In this sense, we face, I think, a tremendous opportunity this year with so many elections, as both Bill and Susan noted, so much new political leadership emerging, so many new ideas being debated, and, ultimately, so many new governments coming into office, that we have an opportunity to engage. We have an opportunity to take a consensus that was built in 2001, and there are very few leaders still in office who were at the Québec City Summit, and George Bush is one of them, take this consensus and continue to make it real. Continue to find a way to help countries live up to this kind of commitment and show their citizens that they are indeed capable of not only opening politically, and creating democratic institutions that are meaningful and that give people a voice in their national destiny, but also, through economics and through prosperity and through addressing the profound social issues that the Americas faces today, that they give people the belief and the hope that individuals will actually be agents of their own destiny. That they will actually have some degree of control over their lives and over the lives of their children.

We can do this in the Americas diplomatically, and we can do it through our institutions, but for reasons that all of you are familiar with our voice only carries so far, and there are only so many people who are prepared to listen to us, and so we need partners, we need strategic partners in this process.

Some of the partners are in this hemisphere itself – countries like Mexico, countries like Colombia, countries like Chile and Brazil and Argentina and Uruguay – countries that understand what’s at stake, that understand that the issue here today is not an ideological issue. It’s not a question of left or right. It’s a question of how you deliver the goods. It’s a question of how you make people feel like they actually belong and commit themselves to a larger system. It requires some sober second thoughts about things we’ve been doing in the past. It also requires big doses of pragmatism.

In this sense, what the Bush administration has attempted to do is remove ideology from our engagement with the region to make it clear that we have not engaged based on whether a government is left or right, we engage based on whether a government is democratic, whether it is committed to the kind of economic models that we think are necessary to be successful in the world, and whether it is committed to government justly, whether it has committed to providing its citizens with those items that we think are necessary to make government real.

In this regard, as we look for strategic partners, we need to understand the partners don’t only exist in this hemisphere, that they exist outside this hemisphere. They exist in Europe and they exist in Asia. We need to look for ways to break down the parochialism that sometimes infects the Americas and find ways to build connectors into the hemisphere and make clear that or get countries in the European Union and key countries in Asia to make clear that making the right kinds of economic decisions, making the right kinds of political decisions has an impact far beyond the borders of individual countries and promote this kind of engagement.

But the engagement also has to come from outside of governments. It has to come from business, it has to come from NGOs, it has to come from faith-based institutions. In other words, we need to organize ourselves better and we need to understand that we are at a moment in history in which nobody can afford to sit on the sidelines, because ultimately if this experiment that were playing with in the Americas is successful, if we are able to show that democracy works, that it’s not a conservative form of government that cannot deal with inequality, that cannot address poverty, but quite the contrary, it is a revolutionary form of government. That by including people actually makes development democratic. Then we have a chance in the world.

Because in this hemisphere we do share common values, we do share common understandings of what makes economies grow. In other words, we have a base from which we can build off of and we need to be successful here because if we’re not successful here, it is going to be hard for us to make the argument that we can be successful in our broader democratization agenda elsewhere where this common base of understanding and values doesn’t exist.

And let me just make one final point on public diplomacy, because to a certain extent is all kind of leads to how we present ourselves in the world. Again, in the Americas, the United States is faced with a unique public diplomacy opportunity. It’s evident in many instances that we have not been doing public diplomacy well. We’re making a big effort to change that. We’re making a big effort to understand what more we can be doing in regards to public diplomacy. And, with Undersecretary Karen Hughes, I think we are making tremendous strides.

But, ultimately, what public diplomacy is about is not just brand management or spinning or public relations. That’s an aspect of public diplomacy, but in the Americas it’s not the fundamental or concrete basis of public diplomacy. Public diplomacy is really about making our diplomacy public. It’s about explaining to people why we do what we do and what we think its import is. But, more importantly, it’s about showing the linkages that exist within the Americas, and especially between the United States and the rest of the world. It’s about showing Americans that what happens in Latin America is important to them. And what happens in the rest of the Americas is important to them. And it’s also about showing the rest of the Americas that what happens in the United States affects them in an important way.

It’s really about kind of pulling the skin back and showing all the connecting tissue, all the muscles, all the nerves, all the bones that link our societies. And, what I’ve discovered, traveling through the region, and I’m sure it’s no discovery to all of you, is that, at the end of the day, our government to government relations are a very pale reflection of the relationships between societies.

When you look at the connections based on investment and trade activity, and when you look at the connections based on university activities and where students study, and when you look at the connections based on what NGOs and civil society organizations are operating throughout the hemisphere and their connections, when you look at how faith-based institutions relate to each other and how churches send not only missionaries, but medical groups and other self-help groups around hemisphere, it is a remarkable network and relationship of interconnectedness. And we have to constantly remind ourselves of this. That ultimately this is the hemisphere that’s integrating, irrespective of what governments do and therefore we should really be on the side of the people.

We should be looking for a way to facilitate that interconnectedness. We should look for a way to deepen our government’s ability to understand how that interconnectedness links to our larger challenge of democracy and development.

But, I will end there and I’m happy to take any questions you have.

Thank you very much.

Applause

Host: Thank you, Tom, for that very open presentation. You’re definitely the right person at the right time in your pragmatic view of the hemisphere and what it takes to drive a positive agenda in the hemisphere is only testimony to that. So thank you very much.

Tom, as he said, has graciously agreed to take some questions.

Question: Martin Schubert, President European Inter-American Finance Corporation, (inaudible), the question that’s in my mind, and I’m sure it is in the mind of many of you here, what policy does the US government have to stem the Chavez-led movement toward the left and anti-business tide, which has been developing in Latin America in recent months?

Answer: Let me make a couple of comments in that regard. First, it’s important to understand from our point of view, as I mentioned earlier, whether you’re left or right isn’t the issue, and this really isn’t about a movement to the left, this is about an alternative vision in the hemisphere. It’s about a vision that really is out of sync with this consensus that I talked about earlier, this common agenda that’s been created in hemisphere in terms of democracy, promoting prosperity, investing in people, and protecting the security of the democratic state.

We have to recognize that as governments have struggled with expectations, as they look for ways to fulfill the very real demands of their citizens, that as a gap opens up between expectations and product, that that creates a space in which people that promote alternative visions can enter. And they’re going to do that in the democratic environment. We just have to expect that.

But, what we need to understand is that what we are seeing in effect is a battle of ideas or a battle of visions. But it is a battle that is ultimately going to be settled through results. It’s going to be settled through how governments respond in a way that meets the needs of their citizens.

In that sense, this is a responsibility or challenge that does not just fall to the United States. It’s really not a question of what is our policy to make this happen, it is a much broader issue, because it is a vision that challenges not just what the United States is doing, but what the hemisphere itself has committed itself to.

In this regard, as I mentioned earlier, the way we do this is number one, by well, Felipe Gonzalez said it best when he said the way you do this is by more democracy and more development. And I believe that.

I think the only way that we can face the kind of challenge you describe is by deepening democracy and by deepening development and showing that democracy does indeed deliver results.

But we have to recognize that we have a very short window in which we are operating in, because we are democratic countries, we do operate on the electoral calendars. And governments do have to be able to show results and responsibility.

And, in that regard, I think the United States has a policy in the region that is pretty aggressive in terms of building coalitions, of building alliances, and of trying to put the resources necessary to meet these challenges in the region.

The Secretary will talk about this at greater length.

The resource commitments that this Administration has made in the hemisphere are significant. When President Bush took office the United States was spending on average $700 million in the hemisphere on foreign direct assistance. The Bush Administration has been spending on average about $1.7 billion. In other words, in annual terms, the Bush Administration has doubled our foreign direct assistance. Annualized over time this put an additional $5 billion into the region that otherwise wouldn’t have been there. And it has brought new money to bear the Millennium Challenge Account, through the Global Emergency Plan on HIV/AIDS, and also through trade policy it is increased total resource flows into the region in a dramatic way.

But it is also sought, through its policy engagement, to do two things. Number one, push responsibility for development back to countries. In other words, make development a national and a country-based issue. Not make it a client-patron relationship, but recognize that there is a responsibility, a shared responsibility, within the hemisphere to promote development. But then ultimately it falls to national governments to make the right kind of policy decisions, and the right kinds of policy reforms to promote development.

And then the further responsibility falls to donor nations to provide the technical assistance, the political support, and the funding to help countries that are making the right decisions have the resources necessary and the skills necessary to make them real. And that’s what the Millennium Challenge Account is all about.

But at the end of the day, we have to recognize that we have a broader hemispheric agenda in front of us. As Susan mentioned we have a positive agenda for the hemisphere and we are looking for willing partners. And we think there are a lot of them in the region. And we think that as we kind of engage more deeply in this battle of ideas, this battle of visions, that we will be able to produce the kind of results that show that it’s this consensual vision in hemisphere that will win the day.

Question: I’m (name inaudible) from Nestlé Group Mexico. Tom, one question, will you be proposing a new "Washington Consensus," and, if such as the case, what will be the (inaudible)?

Answer: That’s a good question, but I’m sure I don’t have a good answer.

I mentioned earlier that this is a time for sober second thoughts and a time for doses of pragmatism. From our point of view, there are important aspects of the Washington Consensus that been successful over time. And we have seen the result in economic growth rates. And we have seen the results in macroeconomic policies that have brought a degree of stability to economies throughout the region.

But if the Washington Consensus has a failing, it’s not linking the macro to micro. It is not recognizing that good monetary policy and good fiscal policy, as important as they are, don’t address the fundamental social issues that this region faces. That you only address those at the micro level through policy reform, through rule of law, through adequate contract and dispute resolution, through creating institutions that work and provide effective services, through attacking corruption, and, if there’s going to be some new kind of consensus, it will really be more of an alliance of action in which people recognize that while the region has made important and good progress at a macro level, and important and good progress in putting in place reforms that create economic stability, and reforms that create economic growth, that growth has to be translated downward in some fashion. It is only, as I mentioned earlier, through national government action that that is going to happen.

(microphone issues)

Question: Rodrigo Calderon (inaudible), Under Secretary Shannon I think you had a very insightful vision at the end of your presentation to foster the integration of our hemisphere to promote trade and prosperity. One great strategy would be as you mentioned to highlight the interconnections that already exist in the hemisphere, both in business, and academics, and science, NGOs, and society. Having lived in the north of Mexico I know that this interconnection have been there for centuries. Is there anything that the US government will be doing to promote the highlighting of these interconnections and how do you see this Council helping that vision?

Answer: One of the ways we’re trying to highlight the interconnectedness is through our public diplomacy. Following the inauguration of President Bachelet in Santiago, Karen Hughes who traveled to Santiago with Secretary Rice, went on a trip through the region. She went Brazil, to Colombia, to Panamá, and to El Salvador. It was her first big trip to the region. She’ll be making others.

The purpose of it was to have an opportunity to meet not only with government officials, but also with a variety of other opinion leaders and those who are working to address some of the social issues in all these countries and to get a better understanding of how our public diplomacy is functioning or not functioning. I think she came away with some very good ideas about what more we can do, what more we should be doing.

These ideas are being discussed now within the State Department and the White House and elsewhere. My guess is that in the not-too-distant future we will be coming up with ways to highlight in our public diplomacy this interconnectedness and make it clear to people that, as one person said, there are armies of compassion and understanding out there that are there, but they haven’t been raised. And our job is to raise them up and link people together. And so in that regard, I think we will be doing some interesting stuff in the not-too-distant future.

As far as the Council goes, the Council, to a certain extent, is the interconnectedness, because it is so representative of the hemisphere. And so many of you are involved in your countries and in your communities, not only in terms of your business activities, but also more deeply in terms of your civic and your social activities. And I think all of you are kind of natural bridges in this regard. And I’m just delighted that you’re here. I’m delighted that I’ve had the opportunity to speak to you.

I look forward to seeing you at lunch and at the reception this evening. And I hope that I have the chance to meet with as many of you as I can, and to hear your points of view.

Again, thank you all very, very much.

Applause