Session V: The Role of Good Governance in Stimulating Sustainable Economic, Social and Environmental Development

As delivered by Michael Camuñez, Assistant Secretary, U.S. Department of Commerce, and U.S. Helsinki Commissioner
Economic and Environmental Forum First Preparatory Meeting
Dublin, Ireland, April 24, 2012

Thank you, Mr. Ambassador.

Before I begin, I’d like to thank yesterday’s and today’s panelists for their excellent and informative presentations. We have covered much ground, which will inform the Forum meeting in Prague in September, and assist in the development of OSCE recommendations to address these very important issues.

Good governance and low levels of corruption lead to socio-economic development. That is a well-known fact. There have been numerous studies on this issue in recent years, and the simple truth is that to increase trade and investment, which in turn lead to a country’s economic growth, companies require secure, stable regulatory environments with transparent, predictable laws and strong records of enforcement. If companies have no confidence that their assets and contracts will be protected, they will be reluctant to invest. As the panelists in Session IV addressed earlier this afternoon, civil society and the business sector also have fundamental roles to play. At the U.S. Department of Commerce we know this well, and we work hand-in-hand with them on a variety of good governance and anti-corruption initiatives.

Corruption – whether large or small – hinders competition and the development of new industries around the world.  It also undermines confidence in public and private institutions.  As Secretary Clinton stated in accepting an award from Transparency International-USA last month, “we know that corruption and the lack of transparency eat away like a cancer at the trust people should have in their governments, at the potential for broad-based, sustainable, inclusive growth.”

I too have seen this, and likely so have all of you. As the Department of Commerce Assistant Secretary responsible for helping to open new markets for U.S. companies around the world, identifying and eliminating market access challenges such as non-tariff barriers to trade, and helping to monitor and enforce U.S. trade agreements and commitments, I regularly hear complaints from companies about corruption-related issues. In fact, it is one of the leading sources of concern companies face globally.

While much work remains to be done, the U.S. government, working closely with business and civil society, has supported creating a culture that promotes sustainable social, economic, and environmental development. The U.S. Department of Commerce has worked in conjunction with the private sector and local governments to help make real progress in this area on a localized basis.

I am pleased that this session has focused our attention on the role of good governance in sustainable economic development, and I’d like to offer a quick example that illustrates this topic. The example comes from outside the OSCE region but could easily be applied and has relevance here. Since 2009, my office has been working with the American Chamber of Commerce in Barranquilla, Colombia, a port city on the northern shore of Colombia, and the Universidad del Norte, a Colombian University, to launch a good governance program. The city of Barranquilla had been, in years past, mired in excessive corruption and had fallen victim to many of the problems associated with it, including a profound lack of public confidence in public institutions.

Then a new young mayor, Alex Char, was elected and was determined to restore integrity and public confidence in the city’s institutions. Through his leadership, and with our modest support, we launched a good governance training program, which has trained municipal government employees through a series of integrity workshops on how to handle requests for bribes and observations of misconduct. In 2011, we extended the program by building a sustainable public-private partnership coalition with a group of leaders from the broader community. The group developed a mission, vision, and principles on which their activities will be based; established committees in charge of creating business ethics projects that addressed issues specific to northern Colombia; and created a governance structure for self-funded anti-corruption projects they will fund in the future. Mayor Char, whose success has been publically documented, told me on a recent visit that in part due to the efforts of this good governance initiative, the city has seen tax collections more than double, providing new resources to fund critical city services. Good governance restored public confidence, which in turn strengthened the city’s ability to provide core services to its people.

Colleagues, the promotion of good governance and transparency is a critical component of the OSCE’s comprehensive approach to security and economic development. Bribery and corruption are contrary to our shared values, and if allowed to continue unchecked, will ultimately threaten internal stability and erode public confidence in civic institutions. Such corrupt practices are also trade barriers that have made it more difficult to rebuild the global economy, creating external economic threats to security. These practices stifle entrepreneurship, and unless all stakeholders – government, private sector, and civil society – are willing to do more in this fight, corruption will continue to impede our ability to create a truly rules-based and open international system.

The OSCE’s role in this is multi-faceted. By addressing problems and challenges of governance at the field level, the OSCE can help countries boost trade flows and direct investment, and that means more revenues flowing into government coffers and in turn, better services to our people. Moreover, when governments open themselves up to public scrutiny – difficult as it may seem – and when, like that young mayor in Barranquilla, they embrace good governance initiatives, governments can and will inspire confidence in the people they serve, a prerequisite for true security. The OSCE can help generate the political will for participating States to embrace these principles of good governance and transparency and work cooperatively to broaden their adoption. The OSCE can also help implement good governance programs like the one I described.

Collectively, we know the nature of the challenges we face; we also know what we must do to eliminate corruption and build economic and political stability. All that is lacking is the political will to address these challenges. I am grateful to this forum for advancing this dialog and promoting this issue as a vital element of economic development and security.

Thank you, Mr. Ambassador.