The Bureau of International Information Programs of the U.S. Department of State publishes a monthly electronic journal under the eJournal USA logo. These journals examine major issues facing the United States and the U.S. DEPARTMENT OF STATE / DECEMBER 2009 international community, as well as U.S. society, values, VOLUME 14 / NUMBER 12 thought, and institutions. http://www.america.gov/publications/ejournalusa.html One new journal is published monthly in English and is International Information Programs: followed by versions in French, Portuguese, Russian, and Coordinator Jeremy F. Curtin Spanish. Selected editions also appear in Arabic, Chinese, Executive Editor Jonathan Margolis and Persian. Each journal is catalogued by volume and number. Editor-in-Chief Richard W. Huckaby Managing Editor Charlene Porter The opinions expressed in the journals do not necessarily Reference Specialist Martin Manning reflect the views or policies of the U.S. government. 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Comments are welcome at your local U.S. Embassy or at the editorial offices: Editor, eJournal USA IIP/PUBJ SA-5, 1st Floor U.S. Department of State 2200 C Street, NW Washington, DC 20522-0501 United States of America E-mail: [email protected] eJOURNAL USA About This Issue © AP Images/Charles© Dharapak President Barack Obama addressed the Ghanaian parliament in Accra in July 2009. n 2009, a new U.S. administration took office. Even that must be in place if large companies are going to make as it confronted formidable problems, its top leaders investments in the developing world. Ispoke confidently to their counterparts in other nations, To begin the discussion, we’ll cite a definition of good identifying “good governance” as a fundamental foundation governance as “participatory, consensus oriented, accountable, for democracy, social justice, and economic development. transparent, responsive, effective, efficient, equitable, inclusive, “With better governance, I have no doubt that Africa and follows the rule of law. It assures that corruption is holds the promise of a broader base of prosperity,” said minimized, and the views of minorities are taken into account President Obama in Ghana. and the voices of the most vulnerable in society are heard This principle has assumed growing importance in U.S. in decision-making. It is also responsive to the present and development assistance policy. The newest U.S. development future needs of society.” That definition first appeared in a agency, the Millennium Challenge Corporation, requires United Nations publication a couple of years ago and is widely that recipient nations meet an array of good governance quoted. benchmarks. In these pages, top executives from that Some other things we’ve learned in researching this organization explain this new philosophy and how it differs publication: Good governance protects order and safety, from the past. Other articles will provide snapshots of these without constraining individuals in pursuit of their policies at work. opportunities and expression of their ideas. Good governance Leaders of many nations increasingly acknowledge the is rooted in the belief that citizens who thrive and prosper link between stable, predictable, honest government and will spread their prosperity into their communities to employ, economic prosperity. In this edition of eJournal USA, African enrich, and inspire others. leaders offer their thoughts about good governance in one Good governance stands in bright light and allows itself article, and another African official explains how better trade to be seen without cause for concealment or subterfuge. Good policies boost economic opportunity. A prominent Peruvian governance dispenses justice evenly, without regard to an economist explains how better governance can endow the individual’s wealth, status, or connections. Good governance poor with property rights that will aid an escape from poverty. is not capricious or arbitrary, but constant, predictable, and Billions of people worldwide can achieve greater prosperity applied in equal measure to citizens of all classes, colors, and through the same methods, he argues. And a representative of religions. the corporate world describes the conditions of governance The Editors eJOURNAL USA 1 U.S. DEPARTMENT OF STATE / DECEMBER 2009 / VOLUME 14 / NUMBER 12 http://www.america.gov/publications/ejournalusa.html Governance and Growth GOVERNANCE 4 U.S. Foreign Assistance Enters New Era 15 The Foundations for Sustainable of Opportunity Growth in Latin America AN INTERV I EW WI TH DA R I US MA NS A N D KEN LiliaNA ROJ A S -SU A REZ , ECONO mi ST A N D AUTHOR HA C K ETT OF GROWIN G PAINS IN LATIN AMERICA The Millennium Challenge Corporation (MCC) is Basic principles of reduced regulation, legal a U.S. government development program advancing protections, and access to opportunity are universal economic growth in an atmosphere of good in the need to promote economic growth, but governance and sustainability. regional characteristics must also be considered in a development strategy. 9 Ethiopian American Takes Helm at MCC 19 Property Rights: A Way Out of Poverty An Obama administration appointment brings a and War new chief executive to the agency. HERN A N D O D E SOTO , ECONO mi ST A N D AUTHOR OF THE MYSTERY OF CA P ITAL 10 Improving Morocco’s Fishing A lack of access to property rights is keeping half the Industry world’s population locked in poverty. An MCC program in the Kingdom of Morocco works to expand and modernize the nation’s 23 Business Looks for Good Governance traditional fishing industry. in Developing Markets SCOTT EI SNER , EXECUT I VE DI RECTOR , AFR I C A 11 Texting for Profits BUS I NESS INITiaTIVE, U.S. CH amb ER OF CO mm ERCE An MCC program in Armenia introduces digital Political stability, reliable infrastructure, and an technologies to help farmers prosper. educated workforce are among the characteristics that corporations seek as they survey new locations. 12 Africans Taking the Lead Leaders from Ghana, Rwanda, and the African Union Commission explain their ideas on good governance in Africa. eJOURNAL USA 2 GROWTH 27 Strength in Numbers: The Power of 34 Building High-Impact Businesses Regional Trade Elmi R A BA YR A S li , VI CE PRES id ENT , PO li CY A N D MWEUS I KA R ak E , DI RECTOR OF PU bli C RE la T I ONS , OUTRE A CH , EN D E A VOR CO mm ON MA R K ET FOR EA STERN A N D SOUTHERN Endeavor is a 10-year-old, U.S.-based AFR I C A organization that finds entrepreneurs in Nineteen member countries strive to improve emerging economies and gives them advice and regional governance to boost intra-continental trade support to launch high-impact businesses and and prosperity. create jobs. 30 Naga City Works for Transparency 37 Reforms Promote Business in and Accountability Indian Cities AN INTERV I EW WI TH JESSE RO B RE D O MI ERT A Capa U L A N D JA N A Mali NS ka , A veteran mayor in a medium-size Filipino city CO-A UTHORS , DOIN G BUSINESS IN IN D IA 2009 describes local steps toward good governance and Regional governments in various parts of India the results. are reducing regulatory barriers to starting and operating a business, according to researchers at the International Finance Corporation of the World Bank. 41 Additional Resources A selection of books, articles, and Web sites. eJOURNAL USA 3 U.S. Foreign Assistance Enters New Era of Opportunity An Interview With Darius Mans and Ken Hackett Ownership, results, and accountability are the hallmarks of aid agreements that the Millennium Challenge Corporation (MCC) has formed with 19 developing nations. The agency, established by the U.S. Congress in 2004, has disbursed almost $7 billion in poverty reduction programs. This support is disbursed only to countries that demonstrate their capability to rule justly, control corruption, and create economic freedoms that will be attractive to the private sector. Darius Mans is MCC’s vice president for compact implementation and was serving Courtesy of MCC as the acting chief executive Cape Verde entered a $110-million compact with MCC in 2005. Improving vendors’ access to markets officer of MCC when this with road and highway improvements is one goal of the compact with the island nation off the coast of interview was conducted. West Africa. Ken Hackett is a member of MCC’s congressionally appointed board of directors. He is anchored in the country’s own development priorities. also president of Catholic Relief Services, the international Second is the importance of ensuring that the humanitarian agency of the U.S. Catholic community. The assistance that is provided is focused on achieving very two spoke with eJournal USA Managing Editor Charlene concrete results. On MCC’s Web site [www.mcc.gov], Porter. you’ll see a “Results” page, which defines — for every compact we are supporting around the world, now in 19 Question: Mr. Mans, how has MCC changed the game countries — the concrete, tangible results these programs in the delivery of U.S. foreign assistance? are aimed at achieving. It’s very important that all of us be very focused on results, getting value for the investment Darius Mans: MCC’s principles in providing of U.S.