AS PREPARED FOR DELIVERY
Friday, November 14, 2014
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Today, U.S. Secretary of Commerce Penny Pritzker gave remarks highlighting the Administration’s interest in expanding commercial relations and the importance of creating a sound business climate to attract additional foreign investment in Central America. The remarks were given at the Central America Breakfast hosted by the Inter-American Development Bank (IDB), in coordination with the National Security Council (NSC). The breakfast preceded a larger event, “Investing in Central America: Unlocking Opportunities for Growth,” which focused greater attention on Central America, particularly following the migration surge earlier this year to the United States of unaccompanied children from the region.
The breakfast included representatives from the U.S. business community and the public and private sectors for several Central American countries. President Salvador Sanchez Ceren of El Salvador, President Otto Perez Molina of Guatemala, and President Juan Orlando Hernandez of Honduras also attended the breakfast. IDB Executive Vice President Julie Katzman moderated the discussion with U.S. and Central American business representatives sharing their perspectives on strengthening the business climate.
Remarks As Prepared for Delivery:
Thank you, Luis (Alberto Moreno), for your introduction and for welcoming me to join you and the leadership of the Inter-American Development Bank for this important event.
I also want to recognize the heads of state in attendance – President Salvador Sanchez Ceren of El Salvador, President Otto Perez Molina of Guatemala, and President Juan Orlando Hernandez of Honduras. Your presence here is a clear sign of your shared commitment to move your economies forward, through reforms, through improved security, and through a strong and growing commercial partnership with the United States.
For decades, the United States has demonstrated consistent leadership across the Americas. Over the past 30 years, the United States has deepened our trade and investment ties with your nations. We have opened our doors to your exports.
Through economic assistance and humanitarian aid, we have invested billions of dollars in the stability, security, and economic success of our Central American allies – but progress has been far too limited.
This past summer, we saw the all-too-human result of this lack of progress: the steady stream of unaccompanied children risking their lives, their livelihoods, and their futures to cross the border into the United States.
Central America’s young people, families, and workers just do not have enough opportunities to succeed. And against the backdrop of this past summer, we have to be honest with ourselves and with each other about why: the changes and reforms needed across the Northern Triangle and the greater region have largely been ignored.
As a result – and not withstanding our geographic proximity – our commercial relationship is not where it should be – or can be.
Today’s IDB event is about changing that. It is about figuring out how we can work together to build sustainable growth in your countries and strengthen our economic bonds. It is about building a sustainable foundation of security and prosperity in El Salvador, Guatemala, Honduras, and across Central America.
What we do not want is to be sitting at this table 10 or 20 years from now having the same conversation about the same failures and missed opportunities. We do not want to find ourselves looking back and realizing we missed a chance to change course for the better.
President Sanchez Ceren, President Perez, and President Hernandez: you are here because you understand the urgency and possibility of this moment.
You have come together to lead in your governments and across your region. And you have made your commitments clear through the “Plan of the Alliance for Prosperity of the Northern Triangle.”
In this plan, you pledged action to expand your economies and improve the business climate.
Now, it is time for you to take tough, but necessary, steps to increase transparency, eliminate rampant corruption, and reform your tax codes – critical steps to attract more business investment and spur long-term economic growth.
In your plan, you pledged to address the root causes of last summer’s crisis.
Now, it is time for you to follow through with a renewed commitment to upholding the rule of law, reducing violence and improving security, and securing opportunity for all of your citizens.
In your plan, you recognize the importance of a strong partnership with the private sector. You know that broad-based prosperity must be driven by businesses – not by government aid alone.
Now, it is time for you to implement this strategy.
It is time to show the business community that you are serious about your vision. It is time to develop stronger institutions that can facilitate real progress toward your goals.
I know this will not be easy, and I know that reforms will not happen overnight. But implementation must start right away.
I spent 27 years in the private sector. I know what businesses look for before entering any market, and I know that they are watching to see what you do next.
Businesses want to see you translate your plan from a series of promises and proposals into tangible reforms and results.
Businesses want safety for their employees; a level playing field and fair competition; functioning infrastructure, strong transportation networks, and an educated workforce; a predictable economic climate; and they want to see your regional strategy put in place.
The businesses in this room – and many more that are not with us today – want to enter and expand across Central America. But they are not charitable organizations, and they will not invest their time, their people, or their money absent clear, positive, sustainable change. That change is up to you.
Make no mistake: Your intentions matter. Plans matter. Actions matter. Without progress by your governments in a series of key areas, the possibilities for real, lasting, private sector-led growth are limited.
From the perspective of our businesses and our government, progress for the Northern Triangle can start with specific components already laid out in your plan.
First and foremost, it is imperative that your countries enact and implement strong anti-corruption laws. As long as corruption is rampant, the risk of doing business will simply be too high for many American companies.
In addition, advancing effective tax reform and improving collection rates are imperative to drawing the private sector.
We urge each of you to affirm your shared commitment to the rule of law by fully funding your Attorneys General and your police forces, while creating an independent investigation office.
We are looking for your nations to update regulations regarding logistics, port management, customs, and sanitary registries. Harmonizing standards for commodities between your countries would provide an immediate and significant boost to regional trade and growth.
We encourage your governments to immediately create a council, composed of your three governments and the private sector, to address each strategic line of action in your joint plan.
To further advance your countries’ success, we want to see your best and brightest young people stay home, start businesses, and help grow your economies in El Salvador, Honduras, and Guatemala.
In the United States, we do appreciate the importance of sending remittances back to families in your nations, yet we also know that relying on these payments is not sustainable over the long term.
If you make tough decisions now to implement your strategy for growth, remittances will gradually become less essential to families in your countries.
You can initiate a virtuous circle – where you attract more businesses, which then pay more taxes that support critical social and educational programs. Over the long haul, that cycle of progress will lead to greater growth in your economies, greater stability for your people, and greater prosperity for countries.
The U.S. government and the Department of Commerce know we all benefit when your countries succeed. We want to be your partners, but we need to see your commitments in action.
If you are ready to demonstrate the political will, we can help you identify the reforms needed that will attract business. We can help you implement these reforms effectively. We can help highlight these reforms in the U.S. business community.
Real, sustainable reform will not only lead to more private sector investment. It will lead to new jobs for your workers and a stronger society for your families.
Beyond that, reform will be a clear sign to us – to the United States – that your countries and all of Central America are ready to pursue the difficult, but vital, path to economic and political progress.
Reform will signify that you are interested in renewing our decades-old “alliance for progress” and form the foundation for lasting growth. Reform will send the message that your countries are dedicated to a stronger economic partnership between our governments – and that Central America is now more open for business.
Thank you. I look forward to our discussion this morning and to the results of the IDB conference throughout the day.