Embracing Green, Inclusive, and Sustainable Growth

I just returned from the Organization for Economic Cooperation and Development’s (OECD) Eurasia week where I discussed how to create sustainable investment climates in the Eurasia region.

The United States welcomes and supports the efforts of countries around the world to create, inclusive, sustainable, and green growth for their citizens. As Secretary Kerry has said, inclusive growth promotes stability, enhances political relationships, and creates shared prosperity and job growth both in the United States and around the world. The United States is also a major proponent of green growth that uses natural resources in a sustainable manner. Recognizing economies not only need to maximize green growth but mitigate the effects of climate change, the United States recently announced during COP21 in Paris a joint pledge of $248 million to the Least Developed Countries Fund (LDCF). The LDCF helps the world’s poorest nations fund urgent adaptation in sectors critical to development such as water, agriculture and food security, infrastructure, and disaster risk management and prevention.

This expanded perspective of economic growth was evident at the recent financing for development conference in Addis Ababa, and by the endorsement of the new Sustainable Development Goals during this year’s United Nations General Assembly. Globally, there is an increasing realization that official development assistance, loans, and aid by themselves are not a sufficient basis for sustainable growth and development. Only by leveraging the power and capital of the private sector to support traditional sources of financing, such as development assistance and domestic resources, can we fund the infrastructure, information and communications technology (ICT), and other investment necessary to continue development around the globe.

In order for the private sector to carry out its fundamental role in spurring growth, however, it is incumbent upon governments to create the policy environments necessary for investment. Chief among these are policies that create open, transparent, and predictable investment climates, and respect companies, capital, and property. This is the best means to facilitate green and inclusive growth in Eurasia and around the globe to encourage sustained investment of all types -- foreign and domestic, public and private. Without such a strong enabling environment, it is impossible for investment to have maximum, sustainable impact.

The U.S. government is engaged both multilaterally and bilaterally to help countries in Eurasia and around the world establish the policies and create conditions on the ground to facilitate investment needed for development. One of the key ways we facilitate this type of investment is by negotiating high-standard bilateral investment treaties (BITs) which provide certainty, transparency, and predictability to investors.  

Our relationship with Eurasia has been at the center of our BIT program.  Of the countries highlighted by this recent conference, we have BITs with Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, and Ukraine.

In the multilateral context, the United States has been one of the strongest supporters of the OECD’s development of a Policy Framework for Investment (PFI). The United States not only joined other OECD members in adopting the new PFI, we also issued a declaration welcoming the role of the PFI “as a tool for development cooperation programs and policy dialogue with partner countries.”

As one example of our support for the PFI, the State Department has provided grants to support OECD technical assistance to improve Ukraine’s investment climate and further anti-corruption efforts. We are pleased that Ukraine is undertaking an investment policy review, guided by the new PFI, and hope the process and any recommendations are helpful to Ukraine as it seeks to improve its business climate. The United States he United States has also provided two billion in loan guarantees since 2014, and is considering a third loan guarantee in late 2015.  Our past loan guarantees to Ukraine carried conditions and precedents designed to promote reforms and fight corruption.

Our work on sustainable investment is critical in the Eurasia region, where access to some of the largest developed and developing markets makes the region poised for sustained economic growth; but economies need to continue to take steps to take advantage of this opportunity. 

The United States stands ready, willing, and able to work with each country to highlight constraints to foreign investment, opportunities for increased collaboration, and collective actions we can take to foster sustainable growth.

About the Author: Lisa Kubiske is the Deputy Assistant Secretary for International Finance and Development in the Bureau of Economic and Business Affairs.

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Wind turbines of the Armenia's first wind power station rise above the high Pushkin Mountain Pass
Posted by Lisa Kubiske
December 2, 2015


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