 Okay, folks, we're going to reconvene. Okay, we're going to get started. This is great. Thank you very much for what has been a very informative conversation so far. I think we've got the right panel to focus on the key challenges and opportunities for partnership. That's the theme of the conversation. Both I think it's key challenges opportunities for the United States, but certainly key challenges opportunities for Japan as well as other actors. I think we've got a diverse set of speakers. We've got Mr. Iraqi from the Ministry of Foreign Affairs. We really appreciate that he's come all the way. So he gets the prize for traveling the longest distance to be with us today. So thank you, Mr. Iraqi, for being with us. He's the Senior Coordinator for Aid Policy and Management Division. I don't think that's actually what he does. I think he's the gentleman who's in charge of the Excel spreadsheet with the budget. So be very nice to Mr. Iraqi. I was very polite to him, and I recommend you do the same. My good friend Denise Rollins, who is the Acting Assistant Administrator for the Asia Pacific region at USAID, has a very distinguished Foreign Service with a very long career in development in the field, served all over the world, and I think it's going to provide a very interesting perspective from a USAID perspective. We have Dr. Abigail Freedman, who's a Senior Advisor for the Asia Foundation and brings a unique perspective to from her parts at the Asia Foundation and really understands Japan well and understands Asia well. I was going to talk about her point of view about some of the opportunities and challenges from her perspective on this, and then we're really pleased that Gary Edson, who's the former Deputy U.S. National Security Advisor for International Economics is with us. I would say that Gary is one of the founding fathers of the Millennium Challenge Corporation as well as one of the architects of PEPFAR as well. He's had a very distinguished career in public service, most notably was involved with the Clinton Bush Haiti Fund that he directed after the Haitian earthquake and wears a number of different hats, including one at the Bush Institute as well as having a, that he'll tell you about as well as serving now in the private sector, but we miss him in public service and hope that Gary will come back into public service sometime soon, and I hope to join you there, Gary. So we're going to kick it off. Don't hold up my breath exactly. So Mr. Rocky, I'm going to ask you first to speak, and you can either speak here or speak from there, and just if you're going to speak, just push the button, and I'm going to join you on the panel. Mr. Rocky, I'm going to turn the floor over to you now. Sir. Thank you very much. Thank you, Daniel, for introduction. I'd like to thank CSIS for organizing this very important event, and it's a great honor for me to participate in this event, and I'd like to thank Mr. Waba. He's supposed to be coming here today, but unfortunately because of the bad flu, he couldn't come here to speak on Japanese policy, but he's coming through Washington D.C. next week to participate in the Japan-U.S. Development Dialogue. I would like to explain about the Japanese ODA policy, and Japan's ODA, which commemorates the 60th anniversary this year, is based on three consistent principles, first one, supporting self-help efforts, second, pressing importance on poverty reduction through sustainable growth, and thirdly, making much of stability and prosperity not only of recipient countries, but also of each individuals. First, Japan believes that the key to the development of developing countries is self-help efforts. Japan has been making great efforts in fostering the capacity of developing countries to create their own paths towards growth, as well as supporting their efforts through constitutional long-end and capacity-building. In order to realize growth, Japan thinks talks and acts were developing countries. Japan's assistance is not a charity. Japan's assistance is for creating ownership of the recipient countries and for the partnership between Japan and the recipient countries. Japan's people are very modest people, but we recognize that Japan's such approach has won a genuine appreciation of the many recipient countries. In the first session, Kiziya explained about the achievement of Japan's ODA in Philippine. I think that's a good example of the appreciation of the recipient countries. Secondly, Japan puts much importance on poverty reduction through economic growth. Japan has made efforts to enhance the general economic level of the recipient countries by improving infrastructure and developing human resources. Thanks to the globalization of the world economy, more than twice as much private funds as ODA flows into the developing countries. On the other hand, faced with the very difficult financial situation of developed countries, developing developed countries, including Japan, find difficulty to increase ODA budget. Thus, it is becoming more and more and more important to lower more private funds to aim sustainable growth. In such a circumstances, Japan's approach which emphasizes ODA's role to attract private funds is becoming more effective. Thirdly, in addition, advocating the realization of human security, which takes respectful and close support focusing on individuals is another important feature of Japan's assistance. This point of view continue to be essential in realizing inclusive, sustainable, and resilient high-quality growth. Japan's assistance has been achieving great results. The international expectation for Japan continues to be very high. Commemorating the 60th anniversary this year, we would like to continue to respond to these expectations. However, the international committee is now changing greatly and rapidly. In the midst of these radical changes, it can be said that the Japan's ODA is facing the turning point. In the globalized world, global issues transport threats to the security of the international community and the volatility and the risks of the world economy largely influenced the stability and the prosperity of the world. Every country, including Japan, needs to play a more proactive role to ensure the international peace, stability, and prosperity for one's own sake. Based on these recognitions, Japan adopted the national security strategy NSS last December. The NSS is based on the Japanese determination that Japan plays a more proactive role for peace and stability in the world. It is clearly stated in the NSS that Japan will endeavor to ensure its strategic and effective implementation of the EA. In particular, Japan will strengthen its assistance to resolve various development challenges, global issues including the achievement of the MDGs, which the AVEA administration has already took actions in various fields. Let me elaborate a little bit further using some examples. Last May, Japan set the Japan strategy on global health diplomacy. This strategy places health as an indispensable field to achieve human security and calls for the promotion of universal health coverage UHC, where every person can receive essential health services. At ticker five in June 2013, Prime Minister Abe stated to make universal health coverage UHC a Japan brand and committed to strengthen assistance in order to promote UHC at the ASEAN Japan Commemorative Summit meeting in December last year. Now, we are launching and preparing concrete projects in many countries, including in Africa and in Asia. Secondly, as for the gender issues, Prime Minister Abe emphasized Japan's intention to assist developing countries for women's empowerment and gender equality towards a society in which women shine at the United Nations General Assembly last year. While Japan has been providing practical and effective assistance in this area, we are committed to continuing our strong assistance and will provide over 3 billion U.S. dollars over the following three years starting from 2013. Thirdly, natural disaster is the threat to human security. Japan experienced many disasters, including the Great East Japan earthquake in 2011, in which Japan received warm assistance from many countries, including the U.S., known as Operation Tomodachi Operation Friends. We would like to realize the resilient world by sharing our knowledge and technology that we gained through these disasters, as well as providing assistance from our experience. In March 2015, we will host the Third World Conference on Disaster Risk Reduction in Sendai, Tohoku, which we recognize as an important opportunity. Also, we are promoting the mainstreaming of disaster risk reduction in post-2015 development agenda, as it is not included at this stage in the current MDGs. In addition to this, based on the ideas to concrete the basic orientation of the growth and the prosperity of the international community, the NSS specifies area to utilize ODA strategically in addition to the traditional and conventional development assistance, which is to uphold the universal values such as freedom, democracy, respect for fundamental human rights, and the rule of law, as well as to realize international peace, stability, and safety, strengthening the rule of law in the area such as international peace, consideration and the fight against terrorism and policy, transnational organized crimes, sea, outer space, and the cyberspace. These new initiatives, on one hand, strengthen the ODA of Japan as a response to the expectations from the international community based on the 60s years of our experience and knowledges. However, on the other hand, they include many challenges for Japan to expand the sphere of assistance. Therefore, I would like to conclude my remarks by saying that Japan will open up a new horizon of the ODA in the new era by learning from the cooperation with international partners as well as making much of the dialogues with developing countries. From this perspective, we would like to cooperate with the United States through the U.S.-Japan development dialogue and the implementation of joint projects. This dialogue between Japan and the U.S. has been announced yesterday to be held on the 20s next week. I hope the successful dialogue with the United States. Thank you very much. Thank you very much, Mr. Araki. Thank you. I just want to make a couple points that one of the things that I took away from our conversation yesterday with Mr. Tanaka was the theme of mutual interest. I think one of the things we are learning here in the United States is that there is a mutual interest in supporting certain kinds of ODA and leveraging the private sector that you talked about. I also get the sense that there is a before and after the earthquake in Japan in terms of understanding and sensitization about ODA in Japanese society. We really appreciate that. I just want to say that I think there is a bipartisan support here in the United States for a more proactive role for Japan. It is very, very welcome that the National Security Strategy of Japan speaks for a more proactive role in the world both militarily as well as using its soft power and smart power. The use of its strategic and effective use of ODA is very, very welcome. Thank you very much, Mr. Araki, for those remarks. Denise, thank you for being here. The U.S.-Japan development dialogue, there are any number of different countries where there is a strategic link up with Japan. I am thinking of Burma and Bangladesh, among others. So share with us the U.S. perspective on this partnership and some of the opportunities going forward. Everyone, I am delighted to be here today. This is really a great opportunity to talk about the opportunities and the challenges of today's development landscape. First of all, let me tell you what our USAID's new mission statement is, and it was just rolled out a couple of weeks ago. Our new mission statement says that USAID is committed to partner to end extreme poverty and promote resilient democratic societies while advancing our security and prosperity. So there are very many themes that Mr. Araki has also mentioned for Japan. Now, how this gets played out in Asia is that it means that we are working to alleviate the suffering of half the world's extreme poor. Major challenge. We are also helping nations strengthen transparent systems of governance and to work on improving economic growth and providing pathways out of poverty. Additionally, it means that we are working to build resilient economies in Asia, particularly since Asia faces so many chronic threats that undermine stability, such as economic shocks, pandemics, and of course, natural disasters, which Asia suffers about 60 percent of the natural disasters in the world. And then also it is the effort to meet citizens' demands for improved quality of life. All of this, in order to accomplish this, we try to focus on building partnerships, and this is a theme that Mr. Araki has mentioned. And when we talk about partnerships, we mean with the donor community, obviously, but with the private sector in particular. But we are also seeing that there are opportunities such as in India with high net worth individuals. We're talking about the Bill Gates of other countries, and they are increasingly getting involved in this landscape and the development landscape. And so our partnerships are really designed to create this much larger cadre of those who want to address clear development challenges around the world, but particularly in Asia. So Dan mentioned Vice President Biden's visit to Japan, where he launched the Development Dialogue. And that is kind of a really essential component of our relationship with Japan. We've had memorandums of understanding and other opportunities to work with Japan, I believe, in 2002. We signed a health MOU that allowed us to work in many countries together in partnership. So that's kind of key, and I'll talk about that a little bit more, Development Dialogue. Mr. Araki also mentioned gender equality and women's empowerment. That's another key area where we believe that together we can help make progress in the world. And of course, the third item is disaster risk reduction. So let me just start off by talking a little bit about the Development Dialogue. We really see this as an opportunity to align and advance our priorities, particularly in countries such as Burma, and continuing our joint work strengthening global health and security capacity, including through the U.S.-Japan Cooperative Medical Sciences Program, which just hosted its 16th International Conference on Emerging Infectious Diseases in the Pacific Rim. This was held on Sunday in Bangladesh. So we are continuing to work in many different areas. We look forward to building on decades of robust partnerships with JICA and the Ministry of Foreign Affairs to help communities from the lower Mekong to sub-Saharan Africa. So this is a very expansive and deep partnership. Second, we know that if we're going to erase gender inequities and unlock human potential on a transformational scale, we're going to have to work more collaboratively. And during last week in Japan, there was a Yokohama conference that was chaired by U.S. Ambassador to Japan Caroline Kennedy. And she reiterated the United States commitment to advancing gender equality in women's empowerment. And she quoted from President Obama's recent State of the Union address where he highlighted the importance of giving every woman the opportunity she deserves. And as Ambassador Kennedy so clearly articulated, when women are empowered to play leading roles and building societies torn by conflict, when they are appointed as mediators in local dispute resolution, and when their daughters are educated, countless studies have shown that the standard of living rises across their entire nation. These ideas are really at the core of our development efforts, as mentioned by our Chief Strategy Officer Carla Coppel last week in Japan. And we applaud Prime Minister Abe's recent announcement about the $3 billion for gender issues, both in Japan as well as worldwide. We recognize Japan's commitment to promote greater economic opportunity for women around the world. And we see this as a game changer, really, and want to work in partnership and collaboratively to increase opportunities for collaboration for women's economic empowerment. And then finally, we see a major opportunity to support stability and growth in Asia through expanded partnership in disaster risk reduction. Asia, with the majority of the natural disasters, and Japan being not so long ago suffering from this, what we'd like to see happen is that societies become more resilient, so they're not constantly wiped out as another disaster occurs, whether it's man-made or natural. And so we're looking at, as a matter of fact, we have a partnership with Rockefeller Foundation. They're going to create hubs around the world. There will be one, perhaps two, in Asia where we will partner with them to work in various countries to make these countries much more resilient. So given that Japan is really committed to this, and I'd also like to highlight the fact that we do have a U.S.-India-Japan trilateral partnership. This one has identified a couple of two very strong things. One is disaster risk reduction, and the other one is healthy cities. And so this partnership, they've met several times, both in New Delhi and in Tokyo, and we're continuing to support those efforts. So as we look back over Japan's 60 years as a donor nation, we are inspired by the incredible progress in Asia. Hundreds of millions of people have been pulled out of poverty, and dynamic and innovative economies have emerged on our fueling global growth. So as we look to the future, we recognize that we still have a long way to go, but we look forward to deepening our engagement with Japan in support of a peaceful and prosperous Asia. Thank you very much. Thank you very much, Tim. Thank you. Very welcome. I think the opportunities around, I heard, gender equality, more resilient societies. I think that's something we're hearing a lot in Washington. There's a lot of discussion around resiliency, and obviously this is certainly something that's a more salient conversation for Japan as a result of the earthquake, and how do you come back from a disaster, the issue of global health, and how Japan's just made a significant contribution to one of the global funds, I think it was just in the last couple months, as well as this issue of healthy cities as well. So how we think about changes in demographics, urbanization, as well as the increasing wealth that you're seeing in many parts of Asia as well, and how development has to react. So there's some old themes there and some important old themes, if you will, but as well as how do we adapt to the changing landscape, I think. So thank you, Denise, for painting that picture. I really appreciate it. Abigail Freeman, you were a US diplomat for a period of time, and now you're at the Asia Foundation as a senior advisor. Talk about some of the opportunities as you see them. You've obviously had a distinguished career all over the world as a diplomat, as now that you're at a think tank, and talk a little bit about, bring those experiences to the table, and share with us where the opportunities and challenges lie for the US-Japan relationship. Thank you. I'm pleased to see Dr. Tanaka here, and thanks Dan and Matthew and CSAS for hosting us all today. Today I want to talk from my perspective from the Asia Foundation, which is an international NGO that has been working in Asia, the Asia Pacific region for the past 60 years, has 18 offices across the Asia Pacific, and recently signed an MOU last April with Jaika, so we work very closely with Japan as well. I thought that my contribution, I would like to talk about two challenges and then one opportunity. As everyone knows, Japan's contribution, both financial and substantive in global development, has just been phenomenal. It's the major contributor to the ADB. It's the world's fifth largest bilateral aid donor. It's contributions to reconstruction, be it Afghanistan, Myanmar, or the countries of Africa are quite impressive. That said, much of, then we heard from this morning as well, much of the bilateral assistance from Japan has been government to government. Going forward, I think that what we are all seeing this came out in the Busan high-level meetings is the role of non-government actors is vastly increased. Whether we're talking about private investment, philanthropy, or remittances, or international NGOs, these roles are phenomenal. So looking ahead, I think the two challenges for Japan, and it's obviously not just for Japan, all government donors are struggling with this, is how to address challenges and issues that go beyond government to government aid in a given developing country. And then the second is how to partner with donors, not only government, but international private sector, international NGOs more broadly. So with the first case, this is obviously not new for Japan. Japan already does a lot of this through technical assistance exchanges. And the challenge is really going to be how to scale up, how to really, when you're working with a developing country, how to go beyond the government to government to all of the local institutions. In Afghanistan, we used to call this not only top down, but bottom up. So that will be one of the challenges. Part of this will be connecting some of the infrastructure projects that have been so important to all of the different stakeholders, both prior to the beginning of an infrastructure project, but once it is underway. For the sustainability of many of these big projects, many, many stakeholders from small and medium enterprises to local communities, to local municipal governments, they all have a role to play. The second challenge is partnering with other international donors. This was obviously a large topic at Busan, and it continues to be a topic. Japan obviously is a fully cognizant of this. We're delighted to be engaged with an MOU with Jaika. That is a major step. It's obviously not just the Asia Foundation, but this connecting with international NGOs. Japan also participates in an Asia Foundation activity Asian approaches to donor coordination, which is really an ability for various donors at various stages in the role of donor, whether you're a new donor like Korea, or a donor that went from being a recipient to a donor like Japan to the U.S., having them all sit down at the table and compare notes on what their experience has been. That's extremely important as well. By the way, those kinds of conversations are not just bringing government players together, but they include academic experts, private sector, and NGOs. Those are the two challenges. One of the interesting things we see is on these issues is that there is consensus that this is the way to move forward. I don't think whether it's USAID, Jaika, any player, everyone agrees on the principle. The real challenge is what needs to be done in terms of the existing mechanisms to be able to allow that to happen. I think that's the big challenge for all donors and partners. That's what I would emphasize, I think, going forward for Japan is really how does when someone this morning talked about retooling. I think it's a great world because what we're talking about are the tools to be effective. The consensus on what needs to be done already exists. Now, let me talk about the opportunity. Denise mentioned it earlier, so I don't want to go over the same ground, but that's the area of women's empowerment. In particular, women's empowerment in the economic sphere. I think this is a terrific area in which the U.S. and Japan can work together. SMEs, let me just give you some statistics. Goldman Sachs estimates that reducing barriers to the female labor force participants would increase America's GDP by 9 percent, the euro zones by 13 percent, and Japan's by 16 percent. The World Economic Forum just released last year a global gender gap report where they looked at each country and looked at the gap within each country between what women and men are able to do and how they can participate. That report underscored that the Asia Pacific region continues to lag behind other regions on gender equality measures related to economic participation and opportunity. In fact, it's ahead only of the mid-east. While we all look at other parts of the world for a variety of challenges, when we're talking about women's empowerment, it's really the Asia Pacific where we stand the most opportunities. It's the most promising area to move forward. And then another one that I really find interesting is that 95 percent of businesses in Asia are SMEs, small and medium enterprises. 95 percent. Only 35 percent of those are women-led. Now, one can immediately go back to other cultural reasons, et cetera. But the Asia Foundation has been doing studies of research of exactly what are the barriers. And it's quite interesting because the barriers are often very specific, challenges for women to obtain loans from banks, challenges for women in terms of networking, of having business associations. These are very concrete hurdles that I believe Japan and the U.S. and donors writ large can really play an important role in overcoming. So that's pretty much my comments. And I would just tie the last point about the opportunity. The ability to move forward on that opportunity is going to be affected by the degree to which Japan and the U.S. are able to overcome the first two hurdles I set out. Thank you. Thank you very much. Thank you. Thank you very much. Gary, over to you. Thank you. I just realized as Abigail was talking, I owe you a thank you. After college, I spent a year in Japan as a loose scholar. That's L-U-C-E, which was a program supported by the Asia Foundation. So I have you to thank for the hangover I still suffer from. According to my Wikipedia bio, some pundit once described me as the, quote, spicy jalapeno pepper amidst the smooth cream cheese of the Bush White House. I've thought about that, and I think in Japan that would make me the fugu in the red bean paste. I flatly deny it, but I will try and add a little spice to an already flavorful discussion. In particular, what I'd like to talk about is we've heard a lot about ODA. We've heard a lot about the private sector. And I'd like to talk about how the notion of official development assistance and the way we implement it has evolved over time and needs to further evolve. And I'd also like to talk about the role of private sector. And I'm sorry that I have to talk about it, because frankly, there's just too much talk and not enough action. And I think that's emblematic of the difficulty of marrying the two on the ground in a way that really achieves results. In any event, let me admit at the outset that having, while in the White House, having been the guy that oversaw the largest increase in U.S. development assistance since the Marshall Plan, in fact, I remain very conflicted about development assistance. First, I believe that President Bush actually revolutionized the way we conceive of and implement official development assistance. He changed the debate from inputs. How much do we spend? I mean, that was the refrain you continually heard. How much do you spend? How much more do you need to spend? To a debate about outcomes, what is it that we want to achieve, and are we in fact achieving it? He did away with the old donor recipient. In fact, I'd argue in those days it was almost a donor victim paradigm that was frankly demeaning and gender dependency and frankly flew in the face of notions of human dignity. Importantly, he bridged the differences between left and right, secular and faith-based, and created a large tent coalition, big tent coalition in support of development assistance that even included the national security community. And as an aside, I think that that coalition has unraveled under the current administration to the detriment of all of us. And if we have any hope of increasing aid budgets, it's going to come from recreating that coalition in some fashion. As a result, President Bush showed that there is a role for significant increases in foreign assistance, so long as its results oriented and based upon clear goals, rigorous accountability measures, true partnership between developed and developing countries, a partnership of equals, and partnership between the private and the public sectors. He used assistance to save lives and address humanitarian problems, famine, water, malaria, and of course, HIV with the President's Emergency Plan for AIDS Relief, which remains the largest commitment ever by any nation to combat a single disease. He also used assistance to bring about key policy reforms, particularly through the Millennium Challenge Corporation, and recent study has shown that the MCC indicators have been as effective, if not more so, than the Millennium Development Goals themselves in bringing about policy reforms. But at the same time, and here's the critical fact that a lot of people overlook, at the same time President Bush emphasized that there are limits to what aid can do and that poverty can be eliminated only through economic growth, self-sustaining growth brought about through trade, investment, entrepreneurship, economic freedom. And poverty is of course the underlying cause of so many of the social challenges we've been talking about, whether it's the participation of women and girls, whether it's clean water, clean energy, human rights, etc. And indeed, when the MDGs were last reviewed in 2010, economists found that the one thing, the only thing that correlated with progress on the MDGs was the one thing which itself was not the object of any MDG, economic growth. Hopefully in the post-2015 development of the MDGs, that's going to change. And it better, because this is going to be the decade of private sector-driven development, not aid-driven development. And there are a bunch of reasons why. First, that trend is being accelerated by the continuing repercussions of the financial crisis, which is continuing to put pressure on aid budgets. I mean, Japan is one of the few who have increased their aid budget and they deserve an enormous credit for that. In turn, though, corporations are seeking higher returns, returns that they're not finding in the United States, in Japan, in Europe, but they are finding in the emerging markets. So what we're seeing is a shift from the old notion of corporate social responsibility to what I call corporate social opportunity, a shift from charitable donations, be it by corporations or high net worth individuals or foundations. We're seeing a shift from charitable donations to strategic investments. The old false dichotomy between doing good and doing well, and by the way, I do believe it is a false dichotomy, is disappearing. Call it shared value or whatever buzzword you want, but the truth is it's being replaced by doing good business or not. Those that do are going to succeed and thrive and those that don't are going to wither on the vine. In the health sector, for example, the addition of non-communicable diseases to the agenda is increasingly engaging the private sector. It has to. Unlike treating measles where you swoop into a community, you give a kid under the age of five of vaccination, you disappear and the job is done, treating diabetes, heart disease, chronic respiratory infection, cancer involves complicated diagnostics, testing, treatment, behavior change, ongoing monitoring. The truth is there just isn't enough money in all the treasuries of the world to solve the major societal challenges we face, whether it's the non-communicable diseases, clean water, the problems of urbanization, resilient economies, et cetera. And I would argue even if the money were there, the expertise isn't. The expertise is in the private sector. When you say to people in government, and I'm sorry this is true of virtually any administration, when you say, hey, I've got Muhtar Kent, CEO of Coca-Cola coming, what do you want from him? Nine times I don't attend. The answer is a check. And I go, no. If he can get his Coke up country, he can get your anti-malaria bed nets up country. You want space on his trucks. And then I think to myself, no, you don't even want space on his trucks. You want his supply chain expertise. That's what you want to transfer. That's the technology you want transferred to government so that we can learn how he does it and how Coke does it successfully. So the expertise is in the private sector. So then what becomes government's role? I think government still leads, but they don't lead with the checkbook. They lead by helping to create an enabling environment in which the private sector, high net worth individuals, and others can address these problems effectively. An enabling environment that comes about by arguing for policy reforms that are attractive to investment, arguing for new tools like first loss capital that help lower the risk-reward tradeoff for businesses to enter these markets and take on these challenges. As a result, the old public-private partnership, which I would argue was always an empty suit. I mean, if you look at it, most of them are 90% public or 90% private. Nobody ever really figured out how to create the right balance. But that paradigm is being replaced with a much more robust, albeit complicated paradigm that involves public, private, and nonprofit. In fact, I think the three sectors are merging into what I would call a fourth sector. And we saw examples of that in the work we did in Haiti with Clinton Bush. Another example is the pink ribbon, red ribbon campaign, which I helped spearhead for the Bush Institute against cervical and breast cancer in Africa. The founding members are UNAIDS, the Bush Institute, Komen, an NGO, and PEPFAR, an arm of the United States government. The other partners include Merck, IBM, Bekton Dickinson, Gates Foundation, and we implement through African ministries and NGOs on the ground. It ain't easy, but it's the way to get the job done at the end of the day. Japan's Global Health and Innovation Technology Fund is another good example. It includes Gates, it includes the private sector, and it's another example of this emerging paradigm of cooperation among the three sectors, where we get 1 plus 1 equaling 3, or 1 plus 1 plus 1 equaling 4. The private sector can play a role in driving, also driving more creative financing for development. Development bonds to finance malaria control. Securitization, think about it, of drug R&D investments to help bridge the valley of death. Health and drought insurance, these are all the kinds of enabling policies and tools that we need to make this private sector, public sector, nonprofit sector, collaboration actually useful on the ground in terms of delivering results. At the same time, there remains a role for smart aid. I mean, there's always going to be humanitarian needs like post-disaster assistance. There's always going to be market failures that we need to step into, as has been done with the international facility for vaccines, to which Japan is a major contributor. In that regard, I'd just like to close by saying I think there's a leadership opportunity for Japan and U.S.-Japan cooperation. The G8 has always had, for example, a very robust health agenda. Japan wasn't the forefront of that. In recent years, that agenda has withered. I think that Japan can be a leader in helping place health back on the G8 agenda and frame it in this new paradigm so that we crowd in, not crowd out the private sector. Likewise, the G20 has yet to address health. It has a development working group, but in truth, you've got the right group of countries around that table to really take on these challenges, and yet they haven't. There is no health working group, again, an issue on which Japan has been a leader. At this next G20 summit, it would be one great outcome, would be to create a health working group so that there is a routine channel for addressing these concerns and engaging the G20 and the B20 at the same time through it. Bottom line, world of development is changing rapidly. It's already changed, and I think cooperation between the United States and Japan with this new vision in mind could lead the world. Gary, thanks. And thanks for your public service. I'll sign on for whenever you get back into government. I'm joining you. I totally agree with what you've just said. I want to associate myself with everything you just said, and I think that one of the market signals of being up here is I can tell when people are not checking their blackberries, there's a higher level of attention, so people really perked up when you made those statements and you're a teller of truths. And so thanks very much for what you had to say. Gary, let me take a moment and just push a little bit on the issue of new tools. There's been a discussion in this panel about new tools. Mr. Rocky talked about ODAs at a turning point. Mr. Tanaka last night was talking about the flexibility that Jaika has. I want you to just take us back to when you were at the Clinton Bush Haiti fund and having to deal with helping a society become more resilient and the topic of resilience has come up as well in this conversation. Talk about what your experience was in terms of working with the different donors and how you were able to use some of those instruments that philanthropy had more flexibly to kind of spur private investment, and what does that mean for donors? Because I think that's also embedded in your remarks and I think that if you could take us back to that, please. Well really quickly, I mean the backdrop for all of this and in fact the backdrop for this whole discussion is a debate that's occurring in this country and I think occurring in all the developed countries, which is from our Congress, from people throughout the country, you're getting a lot of pushback. Why should we care about the kid in Rwanda when the kid in Roanoke needs our help? It's a good question. Now I have answers for it, which is, you know, it's an expression of who we are as a people of American ideals. There's an economic answer. Prosperity abroad creates prosperity at home. There's a national security answer. Failed states and impoverished nations create stomping grounds for conflict and terror and instability in this world. So there are good reasons for us to address these things. But in a world that's financially constrained where people are out of work in our home countries, we owe it to them to come up with smarter ways to address those issues. We shouldn't back away from them. We just have to be smarter about it and that's where the new tools come in. In Haiti as an example, President Clinton and Bush chose as the objective of the Clinton-Bush Haiti fund job creation and long-term economic opportunity. By the way, that was the right thing to do because at the end of the day reconstruction was going to depend upon the one and only one thing that Haiti never had, which is a robust, vibrant, inclusive, competitive private sector. That's the gift that keeps on giving. Bad news? Hard to do. You know, if we knew how to do it, we wouldn't be in the trouble we're in in this country in the first place. So they chose the right objective. In order to achieve that objective, we needed new tools. So for example, this new paradigm that I talked about are the three sectors merging. The Haiti Hope Project is a good example of that. Project to reboot the supply chain and make it more efficient for 25,000 smallholder mango farmers. Good idea. Hard to do. Who did we have around the table? We had Coca-Cola, which was going to market Haiti Hope juice and plow the profits back into the enterprise, so we'd had some real sustainability. Two, the Inter-American Development Bank, a multilateral institution. Three, Clinton-Bush fund, which was effectively playing the role of government, and I'll explain in a second. And finally, an implementing NGO, Technoserve. That cooperation continues to this day. When I say we played the role of government, what was missing is risk capital. You know, the only thing I learned in business school, sorry, is that there's a trade-off between risk and reward. And the trick is, what could government do to lower that risk-reward trade-off? Well, a bunch of things. In the case of the Haiti Mango Project, they used our money to pilot the program for the initial group of 5,000 farmers, pilot financing techniques, et cetera. Ours was the true risk capital. I would argue that that's a role for government. There is a dearth of risk capital in the philanthropic sector. Everybody wants to put their money behind proven interventions to scale them up, and there are some people like Lemelson and others that will put their money behind R&D because there's the glory of discovery, but there's this gap in between. So we provided the risk capital to prove the concept, and then it was scaled up. Another example of tools that we can use. Two most boring words on Capitol Hill are technical assistance and operating expenses. Nobody wants to pay for that stuff, but they're the grease that make things go. Certain agencies of our government can cover operating expenses. Others can't. So we had funds that we were launching where nobody would step up to cover the operating expenses. So Clinton Bush did. Another example, first loss capital. We created with the Inter-American Development Bank a fund to help reboot the microfinance sector in Haiti after the quake, which imploded. OPIC was ready to put tons of money, millions of dollars, likewise the IDB behind that, but they all need somebody at the bottom of the pyramid to provide first loss capital. Nobody stepped up. So we had to. Again, I would argue that's the role, the new role of development assistance for governments. Provide fewer dollars, so now we're talking the language of the Hill and we're talking the language of the voters, fewer dollars, more smartly and more effectively to leverage a much greater amounts from the private sector and the philanthropic sector. Thank you very much. Okay, we're going to take a couple questions. There's lunch in the back. If everyone's well behaved and sits for a couple more minutes, we're going to answer a couple more. We're going to take a couple questions for the panel and then there's some lunch and then if people come back, we're going to hear from Mr. Tanaka. So we'll take a couple questions from the audience. Hands need a show of hands. Okay, others? Okay, so there it's the, yeah, exactly. So I'll get that gentleman. Good morning. Thanks for the discussion. I'm Bill Clifford, President of the World Affairs Councils of America. This is for Mr. Edson and I'd also appreciate Ms. Friedman's reaction as well. You mentioned crowding in the private sector and a shift you've observed from corporate social responsibility to corporate social strategic opportunity. I think you said I've noticed that some companies are insourcing volunteerism. Does this mean crowding out the third sector and what are the permutations in terms of overseas development in say conflict of interest areas if it's heavily private sector? Okay, I'm going to take a couple questions. We'll do this World Bank style. So we'll collect a couple more. So let's get a couple more. This gentleman here. Steve Winters, local researcher. Mr. Edson, you mentioned that the Bush administration did some things to bridge the divide between secular support and faith-based. Could you give some examples of the faith-based initiatives you have in mind? Some others. This gentleman back here. Hi, my name is Daniel Amoud. I'm with Spice for Quest. My question is in terms of policy that would incentivize private corporations to take a more active role in international development projects. For example, some pharmaceutical companies may be very interested if they could get an extension in their patents. And that would be a condition to their participation in some development issues. And there could also be some other type of incentives that would basically would not take a whole lot from our budget yet would really enhance the cooperation. Can we look at some of those also and how maybe even to our nation we could look at some incentive that could help in the private sector? Thank you. I want to take one more. I'd like a little... I'm getting a lot of... We had a lot of discussion about gender equity. So I'd like to open the floor up as well from folks across the gender spectrum. If anyone has a question, if not, okay. Then Tony. This could be for any panelist. Tony Carroll, I'm a senior associate here and a adjunct professor at SICE. Wondering whether they're in the era of perhaps diminished budgets for overseas development assistance, do we need to be more careful in choosing where we spend our money? I think there's a body of evidence. Steve Radelet, friend of this institution and known by many of you, has suggested in the Africa context that really there are maybe 17 countries that really meet a certain minimum criteria that we can spend our money wisely. And that would include, I think, private sector money. So there may be great opportunities in countries that maybe fall short a certain criteria. But the idea here is should we concentrate on those sort of winning countries or should we be more broadly focused? Okay. So what I would suggest is I'm going to ask Mr. Iraqi, then Denise, then Abigail, then Gary. And I'd like to... The last two questions I think we should take first, which is this issue of the role of the private sector and then this issue of deserving countries or maybe... Or how about countries that are better performers? I think that paper was really an excellent paper. It's called Emerging Africa that Steve Radelet offered with Ellen Johnson Sirleaf. And so I thought... And I certainly think that was sort of the philosophy behind the Millennium Challenge Corporation that said what are going through... Looking at countries and running them through screens and saying there's a universe of 120 countries of which so many are good performers and therefore we're going to reward good performance. And I think it did change the conversation. So I take your point, Tony. So Mr. Iraqi, we're going to start with you and then we'll go Denise, Abigail, then Gary. Thank you. Let me explain about Japan's view on the partnership between private sector and public sector. We... As I explained in my remarks that we need more private sector involvement in the assistance to the developing countries. But if the market economy is working efficiently, we don't need to... The public sector doesn't have to assist the private sector. But in fact, in the developing countries, there are a lot of obstacles to overcome for the private sector to invest more money. For example, there's a lack of infrastructure, loads and bridges or a port or those are infrastructure or regulations or the lack of the qualified workers. That's why the Japanese government is helping developing countries to build infrastructure to create the industries for the economic growth and for the legislation. There's not enough legislation, civil legislation or civil code or international property, for example. So some Japanese companies or other American companies or European countries don't invest much because they cannot protect their products. So we help assist those countries to create a better legislation system to attract more foreign direct investment. Another human resources development issues. Some Japanese companies are thinking about investing in Africa to build a factory or to start a business. But unfortunately, they cannot attract enough qualified workers to start their businesses. That's why Japan has launched ABEI initiative, African Business Education Initiative to train young people in Africa. We invite young people from Africa and study in Japan and sometimes through internship in the private companies. We hope they will come back Africa and work, if possible, in Japanese companies or other domestic companies or maybe American companies to contribute to the development of the domestic industry. There are a lot of things the Japanese government and the US government can do to encourage foreign companies to invest more in developing countries. But we should not forget about the very fragile countries where there's no natural resources, where it's quite difficult at this stage to attract foreign direct investment. So we also put much emphasis on the human security issues. We have to, you know, eradicate extreme poverty first to create the industry. So we are doing a lot of things in Japan to attract more private sector to invest in developing countries. Thank you. Denise. Thank you very much. You know, USAID, it's been more than 15 years now that USAID has recognized that the landscape, the development landscape was shifting. We know, we've seen the numbers in terms of how much development assistance has declined over the decades and how much private sector resources have increased. And so, you know, close to 15 years ago we began a new initiative called the Global Development Alliance, and that was our initial efforts at that time to really look at how we could partner with the private sector. We recognize that that's where the resources are, and then you also have, you know, the charitable organizations that began to increase as well. So that was kind of the beginning of this shifting of the development landscape. And then over the last four or five years or so, we've even taken this on much more robustly. Some of you may know that we call it USAID forward, but it really is an effort to partner with private sector, not only in the United States, but in developing countries. And so we have a very robust program in most of the countries we're working in. I mean, if you take, let's take Burma for example. Our administrator is going to Burma in two weeks and to launch kind of a new food security program. And we're expecting, you know, Procter and Gamble and Dole and Microsoft and others who are involved in this landscape to be present because they're all interested in investments in Burma and we want them to invest in Burma. So we're playing a convening role in many cases. Sometimes we're able to put resources to the table, but we bring this kind of cadre of individuals and companies together to help concentrate and focus on what the development challenges are in that particular country. And I think Gary kept mentioning that how difficult it is. It's difficult to do this kind of work otherwise we would have done this and we would have packed up years ago. But it's very challenging to work with the private sector, with other donors, but we're doing that. We have a mandate that comes from our administrator, Dr. Shaw, that this is how we should be doing business. So we have other instruments in addition to the GDAs. We also have grand challenges. Those have been announced over the last couple of years, where we're seeding development issues and encouraging the private sector to come in and work with us in very innovative ways. You know, an example of that is in India. I mean, over the last couple of years, we've changed our development program in India so that it's not donor recipient, but it's peer to peer. It's partners. India has much more money to put on development than we will ever have. Our resources are minimal. They're minuscule compared to what they have. But we can find creative and innovative ways to help unleash their own creativity so that they can tackle development challenges in India as well as in Africa, which is also where they're interested. So I think, you know, and then we have the Development Credit Authority, where we can actually put money on the table and create financial incentives for local organizations, financial institutions in a country to, you know, support small and medium business to support farmers, organizations, or whatever we find is the most creative infrastructure development. So, you know, I think that USAID has really taken this very seriously, the shift in the development landscape to really look at how we can be more innovative and how we can leverage the resources of the private sector. And then, just to say a bit about, you know, where should we be implementing our programs? So, you know, we have a wide range of interest all over the world. And, you know, there are countries that are doing very well. If you look at Africa, you know, Ghana is doing particularly well. But then there are others like DRC and what that aren't doing. So do we pick up and leave those countries because of the development challenges there? Or do we recommit and double our efforts in an effort to try to get them to resolve conflicts and really focus on the development challenges in their countries? We have been going through a process, though we call it selectivity and focus. In the Asia region, for example, we've decided that, you know, Mongolia is a country that we probably may not need to continue to be involved in that country. So we're looking at how can we have some kind of legacy program that will allow us to exit. You know, there are challenges in Sri Lanka as well. So we're looking at that program. But then we decided in the Kyrgyz Republic, for example, which is part of the Asia region, that we want it to actually, because it's the only democracy in Central Asia, that we want it to double our efforts. So we establish a USAID mission there, which we had not had before, and actually have increased the resources. So we are looking at where we are, the resource levels we have. And of course, this is always a conversation between it's not just USAID, but the whole interagency as well as Congress. And so, yeah. Exactly. I think Denise prompts me to do a moment of self-promotion. We did a report on strategic foreign assistance transitions. How do you, what do you do when a country becomes a middle-income country? How do you reframe the relationship to a cooperation and trade relationship? And I think Denise is talking about that. I think it reflects, I think part of, partially reflects where Tony was getting at in terms of some are, some that are more complicated than some that are doing well. And I think it's fantastic that you say it is doubling down in a place like Kyrgyzstan. And so we should, where there are opportunities, be, be opportunistic. And I know that's a, that's a dynamic conversation for AID. And so if you're interested at all in this issue of strategic foreign assistance transitions, Google strategic foreign assistance transitions and CSIS, and you'll, you'll see the report and how we thought about that, that issue we spent a year looking at it. Okay, Abigail, there was a series of other questions. You can either speak to the questions three or four or the first two or anything else you want to cover. Sure. Let me, let me take the first question from our World Affairs Council friend. I want to tackle that question. It's a great question. I want to tackle it from two different angles. One is the issue of priorities, because there is a risk as governments seek to, government funding is going down, seek to work with the private sector. There's a risk of shifting the priorities to where the private sector feels that it can contribute best. And in some ways that may be excellent. There may be situations where the private sector capacity is exactly aligned with what either Japan or the U.S. or another donor country's priority is, but off times that may not be the case. And so we need to be careful about veering off in a different direction. But more importantly, I'd like to bring people back to the recipient country priorities, because I think that's the way out of this dilemma. If we, if we make the priority, maximizing leveraging government funds by working with the private sector, if that becomes the priority, that has to match what the recipient country's needs and priorities are. So that's, that's one thing. The other issue of crowding out the various players, I don't see that really as an either or issue. I'm sure you don't either, you know, that would be too simple, that different players have different roles to play where the private sector may be able to bring resources. The international NGOs often can bring capacity. A good example of this would be in strengthening the capacity of women led SMEs in Asia, you know, that the private sector has a huge role to play and really wants to encourage it and may well be greatly willing to contribute assets to it. But my bet is that they don't have the individual expertise on the ground to both work with different women led SMEs, women's business associations and connect them with other countries because that's really, you know, when we're talking business in Asia, which is where the Asia Foundation works, it's not just building a business and capacity in one country, it's really building that connectivity across the region. Okay, thank you very much. I'm going to give Gary the last word before I just remind folks there's lunch back there and then Mr. Tanaka is going to give a keynote address at 12.30, so no such thing as a free lunch, so please come back and and join us for Mr. Tanaka's keynote address. So Gary, you get the last word. One word, one word, bon appetit. Two quick thoughts. One is we've been saying this is hard work. Why is it hard work? It's really about aligning interests. I used to do corporate workouts and and when you had a big corporate workout, you had all sorts of stakeholders. You had the equity holders, the preferred, the senior lenders, the subordinated lenders. You had management, each with a different point of view and bringing them together hard work. Same here, getting the private sector's interest to align with governments, to align with the NGOs, to align with the host country's interests, that's tough. So that's why this is hard work, but it has enormous returns and I think what we're all doing is recognizing that that's there. The final thing I would say, and maybe Denise can't say that because of where she sits, is let's face it, USAID has at least two hands tied behind its back. A, it doesn't have the tools that it needs, at least the full panoply of tools and I think CSIS and others have done some good work sort of surveying the world's development agencies and seeing what tools other agencies have that we don't and vice versa. And we need more tools in order to effectively make things work. And in the other hand that it has tied behind its back, which goes to the selectivity question, is roughly, and I forget what the statistic is, but at least when I was in office, it was over 90% of the money that went through USAID was earmarked. Was earmarked for a particular country, project, et cetera, et cetera. What is that an artifact of? It's an artifact of a decades old foreign assistance act that hasn't been modernized. MCC, yeah, was an end around and run around that effectively to introduce an element of selectivity, a big element into what we were doing. Yes, they're countries where we get bigger bang for our development buck than others, but we didn't have the latitude to do that or maximum latitude to do that by putting, funneling all the money through USAID. So millennium challenge came into being. But in truth, if you really wanted to address this problem, we'd modernize the Foreign Assistance Act, but there are bigger issues on the legislative agenda, so we're going to have to find workarounds for that. Just do you want to talk about the faith-based? Oh, the issue on the faith-based is, you know, when President Bush, for example, announced the Millennium Challenge Corporation, he did it at the Inter-American Development Bank, which is all about private sector engagement through the IIC, through the MIF, et cetera, at the Inter-American Development Bank, who was standing on the podium behind him, Bono and Cardinal McCarrick. By the way, Bono then went to the National Prayer Breakfast, and the next thing you knew, Jesse Helms was supporting action on AIDS. I mean, that's what I call creating a big tent and creating the room for people to collaborate. And ultimately, you had people like Sam Brownback and Nita Lowy, can't find two people as different as night and day, co-authoring legislation on Coltan, you know, and conflict minerals. That's what bringing the left and right, in fact, who in faith-based together did. Please join me in thanking the panel.