Moving from poverty to prosperity requires more than aid; development must provide a path out of dependency. The most powerful force for eradicating poverty and creating opportunity is broad-based economic growth – sustainable growth that comes when entrepreneurship, infrastructure investment, and trade are encouraged. Over the long run, this kind of growth goes hand in hand with democracy and its institutions such as rule of law, transparency, and civil society.
To most American ears these words sound innocuous. But, they represent a major shift that changes the way development is approached. In fact, it offers the best hope of addressing the fundamental problems of injustice and poverty. Speaking today at the United Nations’ Summit on the Millennium Development Goals, President Obama unveiled his long-awaited development policy and came down firmly in favor of an approach that moves beyond dependency-inducing assistance, whose success is measured in dollars out and necessities delivered, to a development initiative that focuses on opportunities created, livelihoods improved, and sustainable growth.
The President went further, calling for a focus on entrepreneurship as THE most powerful force for creating growth: “[E]very nation will pursue its own path to prosperity. But decades of experience tell us that there are certain ingredients upon which sustainable growth and lasting development depends. We know that countries are more likely to prosper when they encourage entrepreneurship; when they invest in their infrastructure; and when they expand trade and welcome investment.” In heralding the power of entrepreneurship, he recognized what the Center for International Private Enterprise has long championed – indeed is our guiding principle – that democracy and economic growth go hand in hand. Because encouraging entrepreneurship requires establishing fair ground rules that are equally enforced and are responsive to a dynamic world. Policies that do so are best designed through democratic processes that engage citizenry, both private sector and other civil society actors. They are grounded in democratic institutions of rule of law, transparency, and property rights.
As countries grapple with the questions regarding the quality and breadth of growth, business clearly plays a key role. It is also important to remember that the business community has many faces. It is more than the multi-national companies or large state enterprises that may first come to mind; it is also the small entrepreneurs and dynamic young businesses that are keen to contribute to society both as a growing part of the economy and as engaged citizens in economic policy debates.
Building domestic markets is a crucial and needed source of growth. Policies that encourage entrepreneurship do not make exceptions based on gender. Indeed, half the consumers, half the knowledge base, half the creativity, and half the opportunity in any country are resident in the women of that country. Building strong markets requires acknowledging women not merely as victims in need of aid (though some surely are), but as a source of power, growth, and progress.
President Obama’s new policy heralds democracy and economic growth as central tenets of a moral imperative not just to help others, but to do so with long-term well-being in mind. As with any new major policy announcement, the proof will be in the implementation. Moving this initiative forward cannot wait any longer.
