2005 Speeches
American Business Council
Remarks Presented by
Ambassador Katherine Canavan
Embassy of the United States of America
to the American Business Council
Good evening ladies and gentlemen. I am touched and honored by this welcome reception. I especially appreciate this opportunity to talk about our shared goals to broaden and expand the U.S.-Botswana economic partnership, which we hope will help to catalyze Botswana’s economic diversification. I look forward to meeting you all l and to working with you over the coming years.
I know Botswana currently seeks to transform its resource-intensive economy into a diversified and knowledge-based market with vibrant growth potential that doesn’t depend on the fluctuations of diamond prices. That is a worthy goal and is reflected in this nation’s guiding strategy: Vision 2016. Among my objectives as the new American Ambassador is to work aggressively with the government, private sector and civil society to address bottlenecks to growth and support initiatives that will broaden the economic base in Botswana, reduce poverty, and foster a culture of entrepreneurship. This includes promoting foreign direct investment in Botswana and finding ways for Botswana to take advantage of trade opportunities. In particular, business in Botswana needs to expand its use of the African Growth and Opportunity Act, which allows duty and quota free access to America for over 6,400 different products.
I would like to focus my remarks this evening on three key points. First, I would like to highlight some of the successes we have had in building a prosperous trade partnership with Botswana. Second, I would like to underscore how important an independent and proactive private sector is to the crafting and implementation of effective economic policies. Finally, I think it’s necessary to examine challenges facing Botswana’s economic development and address the pressing need to further liberalize the market so that the private sector can drive diversification.
U.S. – Botswana Trade Partnership Successes
President Bush recently said, “One of the surest ways to strengthen democracy and advance prosperity is by establishing a trading system based on clear rules.” I agree with the President that promoting trade is essential to Africa’s development and that transforming our relationship from aid dependency to commercial partnership is the best means to accomplish that mission.
The past two years have witnessed noticeable improvements in U.S. - Botswana trade growth. In just the first six months of 2005 (Jan - Jun), Botswana’s exports to the U.S. totaled $61.8 million, nearly double last year’s six-month total of $33.2 million, and more than 350 percent more than the entire calendar year total for 2003 of just $13.6 million. Botswana’s exports under the AGOA preferential treatment program also expanded in the first six months by 13 percent, from $7.9 million in 2004 to $9.0 million in 2005, despite the expiration of the Agreement on Textiles and Clothing. This tremendous growth in Botswana’s exports to the U.S. is matched only by the impressive growth of U.S. exports to Botswana, which increased nearly 100 percent in the first half of this year to $39.8 million from $21.8 in 2004.
To keep this momentum going, we are in the process of negotiating a free trade agreement with the Southern African Customs Union, which we hope to conclude by December of 2006. The latest negotiating round, held right here in Gaborone in late September, exhibited good progress in a number of areas, and most importantly established a timeline for further negotiations. While AGOA represents the most liberal access into the U.S. market accorded to any country or region without a free trade agreement, an FTA would lock in many of the benefits of AGOA for SACU, while deepening regional integration, and opening up further opportunities to attract foreign investment. But governments can’t succeed alone in pushing the agenda on these issues.
Vibrant Private Sector Essential to Development
It is essential that the private sector, and in this case that means all of you, make its voice heard when the Government of Botswana is crafting economic policies. One of the most vibrant components of American democracy is the vocal role of the private sector in pressing for policies that meet business’ needs. You, as well as the government, bear responsibility for making this country and our trade partnership a success in terms of generating growth and advancing diversification. The private sector’s responsibility and impact extend beyond the bottom line of individual businesses – they truly constitute the core of sustainable well-being for our societies. Last year President Bush noted that the “whole design of free market capitalism depends upon free people acting responsibly. Business people must answer not just to the demands of the market or self-interest, but to the demands of conscience. The bottom line of the balance sheet defines a business' goal, but not the sum of responsibilities of its leaders.” I like to think this means we as leaders have responsibility for developing our societies. That includes treating our workers well, paying them a living wage, and working to overcome shared challenges, such as the scourge of HIV/AIDS.
Challenges Remain
While Botswana has succeeded in the past in reducing poverty and generating wealth, it is a constant battle for all nations to make changes to the regulatory, institutional and legal frameworks that respond to an ever-evolving business environment. Each country approaches the reform and modernization of its economic, institutional and regulatory frameworks through the unique lens of its distinct social, political and cultural history. The case for liberalization of particular industries, breaking down administrative barriers, and opening space for the private sector to operate all vary widely across countries and regions of the world.
There is, however, a universal ideal that inspires each and every one of these reform initiatives. That is: If you foster competition in the marketplace, you will improve the quality of services and products provided to your citizens, you will strengthen the competitive position of your local companies, and you will eliminate inefficiencies that inhibit growth. In the United States, for example, the shift from a primarily manufacturing-dominated to a services-based economy was catalyzed by reforms and innovations in telecommunications and information technologies. IT liberalization allowed companies to share and evaluate information. Private and public networks are now linked across vast distances. E-government can reduce budget constraints while enhancing service and efficiency. The opportunities are only constrained by the limits a society chooses to impose upon its own system. But remember, many countries are competing for FDI. Only by having the right package of investment-attractive policies, not to mention the right infrastructure and services, can a country succeed in attracting investors. This includes ensuring that the environment is friendly and welcoming to investors.
Conclusion
Botswana and the U.S. are actively expanding our partnership and are on a trajectory for even greater economic and commercial collaboration in the future. While challenges remain, I am looking to you, the business vanguard of Botswana, to lead in driving the reforms necessary to reduce administrative and bureaucratic hurdles in order to open up new avenues for private industry participation in Botswana’s economy. Together we can help Botswana reduce poverty, diversify its economy, and build ever-stronger ties to the U.S. business community and the American people.
Again, let me express my sincere appreciation for your warm welcome.
Thank you.
Pula!
