Forty-one years ago, President Reagan addressed the British Parliament at Westminster, and his message emphasized the importance of freedom, democracy, and individual liberty. He said that “Freedom is not the sole prerogative of a lucky few, but the inalienable and universal right of all human beings.” And he poignantly added that “democracy is not a fragile flower, but it still needs cultivating.”
Reagan concluded by saying that we need a campaign for democracy, and from that event, with the creative participation of the Chamber, CIPE was born, along with its sister organizations led by the National Endowment for Democracy, and our mission to this day — unique among the NED family — is to build, repair, and reinforce the various ingredients of that infrastructure of democracy in all parts of the world.
We mustn’t forget that Reagan’s moving vision was not fashioned in a comfortable moment — he recalled World War Two, Korea, and Vietnam and he was staring the Cold War in the face. He knew what democracy meant, he recognized its vulnerability and correctly believed that it was America’s task to lead a campaign to protect it.
Fast forward 40 years, and the concept of democracy has become a blur. As I’ve said frequently in speeches and as Barton Swain of the Wall Street Journal recently wrote, the meaning of democracy has been diluted if not distorted by its misuse. Since few can actually define the concept, the domestic screams of “democracy at risk” have almost no meaning. The word — at least in the United States – has become a rhetorical dart which is regularly tossed in every direction.
Our mission to this day — unique among the NED family – is to build, repair, and reinforce the various ingredients of that infrastructure of democracy in all parts of the world.
Internationally, the word has been coopted by Communists, socialists, and autocratic thugs of all stripes. Why? Because any association with the word gives legitimacy to the illegitimate. The Democratic Republic of the Congo has never had an honest election; the Democratic Republic 2 of (North) Korea has never had a real election; the Lao People’s Democratic Republic is hardly driven by the will of their people; and you can ask any Afghan woman about life in the Democratic Republic of Afghanistan. The list goes on and on. In other words, in some circles, if you use the magic word, you’re good to go.
But this foolish game of nomenclature begs the question; because the real threats to real democracies are front and center and known to all of us — from Russia and Nicaragua to North Korea and Iran and all their suspicious friends. And most of these countries are not satisfied to simply subjugate their own people; they are “entrepreneurial autocrats” — they want to subjugate their neighbors as well.
More perniciously, democracy is at further risk in those places where politicians rise to power in an election . . . and then slowly change their stripes as they reveal their autocratic tendencies. The perfect example is Hugo Chavez, who won the presidential election in Venezuela in 1999. Venezuela was once one of the most sophisticated democratic nations in Latin America . . . so how could they go so wrong? The United States thought Chavez was a pal; they invited him to Washington to meet government big shots and play baseball against an Army team. Doesn’t that prove he’s just like us?
And on that trip, he came to the US Chamber and I walked him and his wife through that door and on to this stage and introduced him to the American business community. And true to the lyrics of Warren Zevon’s Werewolves of London . . . “his hair was perfect” and he told everyone that he was a democracy-loving free market guy . . . and we all applauded. As history tells us, over the course of the next 14 years he nationalized the Venezuelan economy, suspended most individual liberties, embraced Communist Cuba and sucked the life out of a once vibrant nation. The “Werewolf of Venezuela” was a fraud, but masquerading as a democrat bought him all the time he needed.
The Chavez tale is repeated in one way or another in Nicaragua, Bolivia, Peru, and others, and these undemocratic tendencies are still alive and well and were recently characterized by The Economist as Latin America’s “pink tide.”
The problem, of course, is that there’s a lot of “pink” going around . . . but this is the world in which CIPE has operated for the past four decades. The tale of Hugh Chavez is a sad but useful illustration of what President Reagan meant by “infrastructure of democracy” — that democracy is an ecosystem of “many” ingredients that all work together in some comfortable and uncomfortable ways to create a free society.
Following Chavez’s election, as his dictatorial tendencies were becoming apparent, too many in the press and elsewhere were loath to call him out because “he had been elected” and Venezuela was therefore somehow still democratic. The point of this story is that an election is an important first step but is only one of many ingredients in a democratic ecosystem.
The real measure of a democracy is not how someone got the job, but how they do the job. CIPE has labeled this “democratic governance” — meaning that democracy is measured by how the leadership stitches together the multiple ingredients of a democratic society. Is the government really accountable to its citizens; is the rule of law really a way of life; are elections really fair; is speech really protected; is public safety really a priority; are citizens really treated equitably; is the free market . . . really free; and maybe most prominent among the ingredients — is there a responsible relationship between business and government.
And why is this so important: Because a robust free market economy lubricates a society and permits democracy to exist as no other condition can. A democracy is characterized by its citizens’ freedom to act — and nothing personifies that freedom more than market-based economic activity. Within a responsible regulatory framework, individuals invent, things are built, products are bought and sold, processes are innovated, people are hired and fired. This creative energy is not just the essence of a market economy, but of a free society.
The decline of economic freedom (which can quietly begin with overregulation) marks the beginning of a weakening economy which ultimately becomes the fuel of autocracy.
Simply said, business is the only engine of a free society, but a cautionary note is in order. The decline of economic freedom (which can quietly begin with overregulation) marks the beginning of a weakening economy which ultimately becomes the fuel of autocracy. Why? When there is diminishing prosperity, innovation is unaffordable, taxes are diminished, public projects are shelved, unemployment grows, inequality is heightened — and all of these conditions invite government to say: we’ll step in and make everything better; we’ll play a bigger role in the economy; we know what bets to place (and who to place them with), and more regulation is clearly needed.
We know the end of this story because the global landscape is littered with examples. The government bloats; freedoms are restricted; and the society settles in to a grim future because autocratic governments rarely if ever loosen their grip. Every autocrat I’ve ever met really likes steady work.
This is the environment in which CIPE has worked for 40 years. We and our partners operate every day in the most dangerous and unpredictable parts of the world to introduce, reinforce, and mend the various ingredients of democracy. These may be frail democracies or failed states or emerging markets — but our tasks are straightforward: we are always on offense to keep alive the remaining pieces of democracy in an unstable place.
Ronald Reagan reminded us that the fragile flower of democracy will always need cultivating and as I’m fond of saying, we’re “Gardeners Without Borders.” CIPE goes anywhere in the world to tend the flowers of democracy and the single most important nutrient we bring is the power of the private sector. We’re the only NGO whose mission explicitly recognizes and advances free market capitalism as a sine qua non to the existence of democracy and we work with local partners, think tanks, business associations, and government agencies to tackle those conditions that undermine the economic and political health of a country.
Today, CIPE manages some 200 projects in over 120 countries to improve the business environment and strengthen the partnership between business and government which is essential if free enterprise is to fully contribute to the society in which it lives. And here’s the part I really love to describe — CIPE’s portfolio of projects is both fascinating and important.
- Working with the Egyptian finance minister to promote public and private governance standards and encourage foreign investment, we discovered that there was no Arabic word for “governance,” so we worked with Arab linguists and created the word which is now used throughout the Arab world.
- When Juan Guaido won and challenged the Venezuelan election which was stolen by its current president Nicholas Maduro, CIPE was asked to prepare an economic plan to stabilize the fractured Venezuelan economy if Guido ever assumed power — which unfortunately never came to pass.
- CIPE’s award-winning anti-corruption and compliance work, such as Ethics 1st in Kenya and Nigeria, is helping both governments and businesses strength integrity and governance standards and is becoming a model across Africa.
- CIPE has a leading role supporting economic integration in Central Asia through its participation in the new B5+1 initiative that was announced earlier this year by the
White House. - In Bangladesh, CIPE’s Women’s Business Agenda brought about a dramatic increase in commercial lending to female entrepreneurs, which now totals more than $100 million.
- CIPE created the phrase “corrosive capital” as a way to describe and warn government officials about the malign techniques used by foreign countries who aim to penetrate and corrupt their economic systems.
- And the lessons learned from CIPE’s work with business associations throughout the world are now being packaged into training materials which will be shared with CIPE’s more than 1000 local partners.
These success stories are legion and I wish there was time to share more, but mindful of the forces that are arrayed against democracy and free market activity . . . I must acknowledge that almost everything we do is always at risk. Years and millions of dollars of CIPE investment in Iraqi business initiatives were washed away by ISIS; our women-in-business programs in Afghanistan are gone; and our Ukrainian staff and our 30 years of project activity in that country are obviously at risk.
Even though democracy and free enterprise unfortunately go in and out of fashion, CIPE is blessed with a rich history that has proven time and again that where the private sector flourishes democracy can grow, and where democracy takes root the prosperity which the private sector brings will know no limits.
In closing, I’d be remiss if I didn’t recognize the skillful and passionate CIPE teams around the world — many of whom are with us today — and gratefully acknowledge the work of our parent, the National Endowment for Democracy, and the support of the United States Congress, the Department of State, USAID, the Australian Government, the European Union, and other donors for their assistance with this important programming. As President Reagan reminded us, “Democracy is not a fragile flower, but it still needs cultivating” and I can assure all of you that CIPE will continue its “Global Gardening” for many years to come.