Remarks

The Role of the U.S. in Bangladesh's Development

Remarks of Ambassador Patricia A. Butenis to the Bangladesh Chamber of Industry

October 3, 2006

President A.K. Azad, Vice-President M.A. Shahid, distinguished guests, As Salamu Al-aikum.  It is a pleasure to be with you today.

In its brief history, Bangladesh has built a strong, vibrant economy.  You know the statistics:  sustained GDP growth averaging 6% over the last four years, a current account in near balance, reasonable foreign currency reserves relative to imports, low to moderate inflation, recent price rises notwithstanding, export growth in excess of 20% in the critical ready-made garment sector, and double-digit growth in your own industrial sector. 

These are worthy achievements for any economy, and certainly for an LDC like Bangladesh.  Yet much remains to be done.

The private sector is the engine of growth in any economy, and Bangladesh is no exception.  Many of you here today compete globally, going head-to-head with companies from developed and developing countries alike – and your businesses succeed.  It is your businesses that provide quality jobs for Bangladeshis – and not just for the people you employ.  Every job you create provides income that is spent on the economy, supporting other local businesses and creating new jobs.

I've been impressed by the tremendous entrepreneurial spirit in Bangladesh.  And what I find most impressive is the breadth and depth of that spirit.  Just yesterday I attended the 3rd Annual Asian Women Entrepreneurs Eid Festival, where I saw first hand some of the thriving businesses created by Bangladesh's talented women entrepreneurs.  Equally heartening are the stories of Bangladesh's successful micro-entrepreneurs.  Citigroup Foundation recently presented its Second Annual Micro-Entrepreneurship Awards, highlighting the business acumen present even among the poorest segments of society.

This year's winner of the award for Best Micro-Entrepreneur is a great example of how an entrepreneur's efforts can improve an entire community.  Zakir Hossain began his weaving business with a small loan of just 5,000 taka to buy a loom.  He quickly repaid that loan and took another to build his business, continuing the cycle of borrowing and repayment through seven more loans, the last loan for 275,000 taka.  He now owns over 80 looms, employs 120 weavers, his monthly payroll alone is over three lakh taka, and he is diversifying into the food business by purchasing an oil press. Even better, he now makes small loans himself within his community, in some cases even to his own employees, for them to purchase their own looms and start up their own businesses. By his example, and by his own loans, he has provided his community the ability to help themselves achieve economic stability.

The topic of today's discussion is The Role of the U.S. – not the U.S. government I might add – but the Role of the U.S. in Bangladesh's Development.  It is an important distinction.  Supporting economic growth and development in Bangladesh is one of our top policy priorities, and we provide significant assistance through the U.S. Agency for International Development.

This year, for example, USAID and the Government of Bangladesh will launch a new project called Poverty Reduction by Increasing the Competitiveness of Enterprises (PRICE).  The premise of the PRICE project is to improve the integration of small and medium sized enterprises, including women SMEs, within select sectors and to help businesses improve their performance in order to effectively compete in new markets.  PRICE will establish innovative public-private sector alliances to strengthen the capacities of organizations that serve entrepreneurs and will leverage additional technical and financial resources to make these programs sustainable.

While USAID is our most visible program, it is by no means the only support we provide to Bangladesh.  Our International Visitor's Program, speaker's programs and educational programs support short and long term training for current and future Bangladeshi leaders.  Many of our programs are designed to support basic institutions that affect the business and investment climate.  Our Department of Justice, for example, works closely with the Bangladesh Bank and other government authorities to improve Bangladesh's ability to enforce its banking and anti-money laundering laws, thus helping to strengthen the financial services sector, a key sector for economic growth and development.

I'm proud of our programs.  I believe they make a difference.  But let's be frank.  Gone are the days when Bangladesh was an aid-dependent country.  Nor is our role to fill the gap left by the private sector:  much of the ground-breaking development work in Bangladesh has been done by your own, home-grown organizations, and by socially-responsible businesses like Citibank.

Which is why I drew the distinction between the role of the U.S. government and the role of the U.S. more broadly.  The U.S. private sector already plays a far greater role in the development of Bangladesh than does the U.S. government.  The U.S. is one of your major export markets, with over $1.5 billion in the first six months of this year alone!  By the way, that’s over eight times the value of Bangladesh's imports from the U.S. in the same period.  U.S. investment already plays an important role in Bangladesh – some of it is very visible – Chevron and Halliburton in natural gas production for example, much of it less obvious, as when major buyers provide financing to expand production facilities in the RMG sector.

U.S. investors are ready, willing and able to play an even larger role in Bangladesh.  We meet regularly with prospective investors eager to learn more about opportunities in Bangladesh and with committed investors who advise us of the projects they are pursuing.  All too often, however, they also share their frustrations over inexplicable delays, arbitrary decisions, and an opaque decision-making process.

"Build it and they will come," a saying popularized by the movie "Field of Dreams," is in one sense reflective of a larger economic truth.  Economic growth occurs naturally wherever the conditions exist for economic growth.  Bangladesh must create those conditions for growth and must continually improve its competitiveness.  I'm sure you will not be surprised by foreign investors' concerns.  They are concerned by the lack of transparency in many government and regulatory decisions.  They find it difficult to deal with extended delays for project approvals – or just getting basic licenses and customs clearances.  They want predictability and are dismayed when decisions are arbitrarily revised or reversed, seemingly due to political pressure or pressure from so-called vested interests.  They worry about corruption and political unrest.  In short, they worry about the same things you – as leaders of the business community – worry about.

There are other issues too -- infrastructure development prime among them -- issues you also know all too well because you deal with them every day.  Foreign direct investment can play a significant part in rapidly expanding your infrastructure – providing the power, energy, communications and transportation networks so critical to sustained economic growth.  But for that to happen, Bangladesh must create the regulatory and investment climate to support private infrastructure development.  The current debate over national policies on mineral resources is a case in point.  These policies must be structured to reflect global economic realities and to balance fairly the interests of both Bangladesh and the domestic and international investors it seeks to attract.  That can not happen when policies are driven by threats of mass actions and demonstrations by groups with their own vested interests.  Well reasoned policies will attract U.S. investors, and investors from other countries.  Policies that pander to narrow populist demands will not.

The image of Bangladesh abroad matters to your economic growth.  That is never more true than during an election cycle.  Bangladesh’s recent economic success reflects its reputation as a democracy, a reputation it has earned through three elections generally acknowledged to have been free and fair.  Bangladesh is proud of that democratic tradition, and should be.  We want the tradition to continue.

We support democracy and the democratic process.  We do not support any particular party.  As business people, you know your success is judged not by last year's performance, but by what you do now.  We want the next election to be free and fair, with an outcome accepted by all as the product of a fair election, just like previous elections.  I know we share this goal with the people of Bangladesh.

And no speech I make these days would be complete without praise and encouragement to the business community for its efforts to persuade the political parties to negotiate their differences over the upcoming election.  Thank in large measure to your hard work, Bangladesh is closer than ever before to reaching a negotiated compromise.  Your efforts took time, energy and courage and I salute you.

The United States -- my government and my people -- believes in Bangladesh.  We salute your achievements.  We are and will remain committed to working in partnership with you to support economic growth and development in Bangladesh.  Let the future be bright with possibilities.

Thank you.

Note:  A Bangla translation of this article is also available from the American Center.  If you are interested in the translation, please call the American Center Press Section (Tel: 88371500-4, Fax: 9881677; e-mail: DhakaPA@state.gov; Website: dhaka.usembassy.gov