Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
Plenary Address to MENA Power 2010
Wednesday, May 26, 2010
As prepared for delivery
Good afternoon, ladies and gentlemen.
Let me begin by thanking my friend, Lee Zak, for inviting me to join USTDA for this very important conference. USTDA and the U.S. and Foreign Commercial Service share a complementary mission – to build U.S. trade relationships in emerging markets, and by doing so, to promote economic growth for both the United States and our trading partners. The services that USTDA provides to improve infrastructure in these markets are critical to the work done by the U.S. Commercial Service in helping U.S. companies successfully engage with business partners overseas.
I also want to thank Ambassador Scobey and her team for hosting us this week, as well as for their strong support of the operations of the U.S. Commercial Service here in Egypt.
It’s a great honor for me to join so many dignitaries and business leaders, on my first trip to the Middle East and North Africa as Assistant Secretary of Commerce and Director General, to share some thoughts about the importance of U.S. economic engagement in this region.
When President Obama spoke at Cairo University last June, he emphasized the Administration’s commitment to improving America’s relationship with the Middle East. The President discussed his vision of promoting stronger partnerships between business leaders and social entrepreneurs in the United States, Muslim-majority countries, and Muslim communities around the world. Then, in April of this year, the White House hosted a Summit on Entrepreneurship, in which attendees from more than fifty countries and five continents discussed how to deepen ties between the U.S. and the Muslim world. We are delighted that at the Summit, Secretary Clinton announced that the Egyptian Global Entrepreneur Program – the result of months of collaboration between the U.S. and Egyptian governments and business communities – will be the first pilot Global Entrepreneur Program, realizing the President’s vision.
In Cairo, President Obama also described his personal connection to the Muslim world, and noted that the “dream of opportunity for all people has not come true for everyone in America, but its promise exists for all who come to our shores – and that includes nearly 7 million American Muslims.” I share that connection, and I have also benefited from the American dream.
I was born and raised in India, the son of a military officer and a musician, and paid my way through universities in Delhi and Bombay. My aspiration growing up was to run a company in India, and the thought never crossed my mind that one day I would serve in the Administration of the President of the United States. My presence here today also speaks to what is unique and special about the role of immigrants in the American story.
After my economics and business education at Delhi and Bombay universities, I began a thirty year career in international business in India. From India, my family moved to Indonesia and Singapore, where I ran the businesses of major global companies. From East Asia, I moved to North America, running Warner Lambert’s consumer businesses in Canada, until I left for the United States to head up Worldwide Consumer Pharmaceuticals for Johnson and Johnson.
While a majority of my career has been spent running major businesses, for the last five years, I have worked as an international development consultant, establishing public-private partnerships and leveraging economic development work to install and support sustainable initiatives and scalable businesses in Africa. Through my work in emerging markets, both as a businessman and as a consultant, I have witnessed first-hand the enthusiasm and creativity of entrepreneurship. However, entrepreneurship can only be realized by supporting systematic economic growth made possible by critical power and infrastructure.
Over the past three decades, the world and the global economy have changed dramatically. Globalization has transformed many parts of the world, including the Middle East and North Africa, into vibrant, international trading centers. The possibilities, potential, and aspirations in these markets that are home to over 300 million people are even more spectacular and that is what makes developing power and infrastructure now so very important.
Two-way trade between the United States and the MENA region totaled over $127 billion in 2009, including $53 billion in U.S. exports. Our trade relationship with the region is buttressed by five bi-lateral free trade agreements, including with Bahrain, Israel, Jordan, Morocco, and Oman.
Power and infrastructure industries have been key components of our trade relationship with this region, and they will continue to be critical. Although energy production in the MENA region continues to increase, it is not increasing as fast as local demand. According to the World Bank, energy output was 47% higher in 2006 than in 1990, while the use of energy in the region more than doubled. I am optimistic about the opportunities this represents for U.S. power equipment and service providers to meet the growing energy demands and needs in this region.
The U.S. is home to some of the world’s leading power generation, transmission, and distribution companies. These world-renowned companies strive to advance methods of generation through more efficient and new technologies as well as streamlined methods of transmission and distribution.
Advances are being made both in traditional methods of power generation, such as coal, natural gas, and nuclear, as well as new energy sources. Cleaner technologies such as clean coal and carbon capture and sequestration, combined with more robust usage of wind and solar power, are effectively reducing carbon footprints across the world.
As the world focus shifts towards heavier usage of renewable energy technologies, U.S. companies are changing the ways in which power is generated and capitalizing on natural resources such as wind, solar, biomass, and geothermal. New methods for transmission and distribution are being created through smarter technologies such as smart grids and energy efficiency, enabling each kilowatt generated to be more fully utilized.
U.S. companies are competitive across the entire spectrum of the power supply chain and will continue to lead the way through innovation that can supply the Middle East and North Africa with the technology and expertise needed to meet the region’s growing energy demands.
With over 80 million people, Egypt is the most populous country in the Arab world and will continue to be at the center of the region’s energy demands as a gateway to the rest of the MENA region. Egypt is moving toward its goal of having renewable energy contribute 20% of its total energy supply by 2020. New wind farms are being built, solar energy plans are being drawn up, and biofuel resources are now being utilized. U.S. companies can play a major role in meeting this demand, particularly in concentrated solar power, which holds significant promise for generating clean, renewable electricity that can take advantage of Egypt's abundant sunshine.
When I spoke to a delegation from the American Chamber of Commerce in Egypt earlier this year, I noted that trade continues to be one of the most important aspects of U.S.-Egypt economic relations. The United States remains Egypt’s largest trading partner, and in 2009, the U.S.-Egypt trade volume reached $7.3 billion. The U.S. is also the second largest investor in Egypt, and our foreign direct investment reached nearly $9 billion in 2009.
Last year, the U.S.-Egypt Business Leaders Forum was created to work with both governments to maintain and strengthen the business-to-business relationship between the U.S. and Egypt. Secretary Locke and Minister Rachid signed a Memorandum of Intent in November in support of the Forum. There is no doubt that a private-sector led dialogue is an effective conduit to building the U.S.-Egypt commercial relationship.
However, while exports to Egypt have grown in recent years, Egypt is still only our 34th largest export market. Red tape remains a market access roadblock for many American and foreign companies, and must be reformed. Too often, a multiplicity of regulations and regulatory agencies delay the process of getting goods through customs. These barriers lead to high transaction costs. To increase trade, it’s incumbent upon Egypt to implement market-oriented reforms to address these issues to make it easier to do business here.
Along those lines, a new Strategic Economic Partnership on Trade Related and Investment Issues between the U.S. and Egypt is currently underway, which will strengthen our bilateral trade and investment relationship. It is our hope and expectation that this partnership will help deepen and broaden trade and investment relations between the United States and Egypt and lead Egypt to improve its protection of intellectual property rights and reduce non-tariff trade barriers.
Growing our trade with the MENA region, including Egypt, will provide consumers in this region access to American products, services, and technologies that can improve lives and livelihoods. Growing trade with the region is also a key component of the President Obama’s broader plan to create jobs in the United States, a strategy that the President outlined in his National Export Initiative (NEI). The NEI addresses a key characteristic of the 21st Century economy – global trade and domestic job creation are increasingly interdependent and can improve the quality of life for all those who engage productively.
The NEI is an unprecedented, comprehensive strategy aimed at doubling U.S. exports over five years, while creating millions of jobs, both at home and abroad. The NEI leverages the resources of all the departments and agencies of the U.S. Government that support trade – such as the U.S. Department of Commerce and the U.S. Trade and Development Agency – to better assist American businesses that want to sell their goods and services abroad. And for the first time, this export-promotion strategy will have the focused attention of the President and his Cabinet.
At a time when U.S. unemployment remains at unacceptably high levels, boosting our trading relationships has become a national imperative. The NEI focuses on impacting three critical areas of international trade: trade promotion and advocacy; availability of credit and financing; and free and fair access to foreign markets.
As Assistant Secretary of Commerce and Director General, I lead a team of over 1,500 trade professionals worldwide responsible for promoting U.S. exports and for providing commercial diplomacy and advocacy support for U.S. business interests around the world. Our offices in eleven countries across the MENA region, including Algeria, Egypt, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Qatar, Saudi Arabia, and the United Arab Emirates, work with U.S. and local businesses to facilitate public-private and commercial partnerships and help create opportunities for exporters and buyers to further bilateral trade.
Right here in Egypt, we have a talented team of 13 trade professionals in Cairo, led by Peggy Keshishian, our Senior Commercial Officer. Our trade specialists here identify top notch U.S. energy suppliers to fulfill the Egyptian Government’s energy needs and facilitate commercial dialogues.
America’s strength has always been our ability to create and sell products and services that help others around the world improve lives and livelihoods. The National Export Initiative will contribute to building a stronger economic foundation – both for America and for the Middle East – by raising the level of attention on building our trade relationships in the MENA region and by dedicating more U.S. resources to connecting U.S. exporters with buyers and distributers. And by building our trade relationships, we will not only strengthen the bonds of commerce, but also the bonds of brotherhood.
Simply put – through the NEI, American companies that want to do business in the Middle East and North Africa are going to have a more vigorous partner in the U.S. Government.
Thank you again for having me with you today.
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