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J.F. Keane: Promoting Trust and Transparency
Written by John F. Keane, Former US Ambassador to Paraguay
Saturday, July 5, 2008
Asunción, Paraguay, July 2-5, 2008
A nation’s development and peacefulness are affected by its outlook, degree of engagement with the world, and levels of interpersonal trust and transparency in its society. Those levels of interpersonal trust and transparency are outward manifestations of the fundamental value emphasized in these conferences: love.
Mutual trust is the foundation for all economic activity. But, what if we doubt the value of the currency? Without trust there will be no investment, no information sharing, and no economic growth. Do I trust my neighbor? My doctor? My pharmacist? The postman? The policeman? Do I have confidence that my trading partner will deliver the goods or services in the promised quality, quantity and time? Do I trust my mayor, governor or president to spend my tax contributions wisely and to give my child a good education? Do I trust the courts to enforce contracts? Is there a rule of law, or are the “favored” above the law?
A key ingredient of trust is transparency in personal behavior and governmental action, including finances, regulations, and contracts. A major focus of US assistance is transparency, and one of the most successful such programs started here in Paraguay more than five years ago, concentrating on transparency of municipal government finances.
Traditionally, Latin American countries have been isolationist. The free-trade agreements that have been in effect for a while have created jobs and prosperity in all the partners. Many Latin American countries have forged their own new trade links with each other and around the globe.
The expansion of commerce and free-trade agreements produces some losers along with the many winners. Any values-based vision recognizes that it is morally right for societies and governments to show compassion by helping those who have been hurt deal with the transition. Without such solidarity, the new paradigm of free trade will lose in the court of public opinion.
I feel confident that intensified integration efforts in Central America, the Andes, and the Southern Cone will advance their members’ development in proportion to the depth and breadth of their trade, investment flows, knowledge sharing, mutual trust, law enforcement cooperation, and transparency. However, it is delusional to think that benefits can flow from integration efforts which are undermined by distrust, and/or by criminals such as kidnappers, terrorists, drug traffickers, money launderers, smugglers, or document forgers who have safe havens in a neighboring country.
It is important that the US remain fully supportive of cooperation efforts. Among the many benefits, multilateral organizations offer smaller countries a sounding board enabling the US and other large countries to understand smaller countries better.
We all know that people respond much better to opportunity than to obligation, and much better to positive incentives than to fear. It is wondrous what people have achieved when opportunity is afforded, whether it is to study and do research, to perform in the arts or in sports, or to build enterprises that create wealth and jobs for their communities and nations.
But people will not make the effort unless they trust that social institutions, and government will reward individual merit more than personal or family connections. As we know, alienated youths are the fertile soil for conflict. A society’s economic progress, and to some extent its long-term political stability and peace, depend in part upon its ability to generate gradually expanding levels of trust.