Video Transcript

Alan P. Larson—Example of Excellence:

Highlight

For me the period that was a highlight – there was no individual moment that stands out – but the period after 9/11/2001, where I needed to apply everything I had learned over my Foreign Service career to a new set of challenges, was I think the highlight.  I found myself visiting Afghanistan, working on our foreign assistance program, visiting Pakistan, discussing with President Musharraf and his Finance Minister, Shaukat Aziz, how we were going to use debt relief, trade benefits and economic assistance to really bolster them in the war in terror. 

One of the last things that I worked on that I found really interesting, because it brought together so many aspects of what I learned, was the work that we did in arranging for the cancellation of 80 billion dollars of debt that the Iraqi government owed to government creditors around the world.  First off, it was important, it was an important way to make sure that the new government that took office after the tenure of the Coalition Provisional Authority would not be burdened by debts that they could not afford.  And frankly debts that had incurred cynically by Saddam Hussein over the many years that he ran Iraq.  In some cases they were cynically negotiated with foreign government creditors, who understood that these debts couldn’t be paid.  And so it was important in our judgment as a matter of justice and fairness to the Iraqi people that they be largely cancelled.  But there are very, very well established procedures for dealing with debts owed to governments.  I had been a representative to the Paris Club, the informal group situated in Paris that typically handles these things, so I had a lot of practical experience in how these negotiations work.  There was a tremendous amount of diplomacy involved, because we had to get agreement from countries that did not agree with our stance on Iraq.  France, Germany were pivotal, Russia was indispensable, and we also had countries like Japan, that while they were with us in the major issues in respect to Iraq, they had a very strong national policy about not forgiving or canceling debt.  So this took a tremendous amount of coordination with the White House and the U.S. Treasury – tremendous amount of interaction with major governments around the world, including the new Iraqi government.  And the result, which took place in 2004, near the end of my career, was the largest debt cancellation in history. 

Low point

The good and the bad are always mixed together, more or less at the same time.  Early in my career I was concerned about whether moving and living abroad was going to be consistent with a good family life.  That turned out to be a concern I didn’t need to have, even though we lived in some difficult places, like Freetown, Sierra Leone, Kinshasa, Zaire.  The family side of things worked out very well.  We raised three kids through the Foreign Service period of our lives.  And I turned out not to have needed to worry about that as much.  During the period that I mentioned as my highlight, that is the period after 9/11 of 2001, there were some very serious disappointments and low lights mixed in with that.  We were all very, very concerned when having encouraged the United Nations to get involved with Iraq, there was a bombing of the U.N. headquarters in Iraq that took the lives of many, many people and injured many others.  I think there was a lot of disappointment about the fact that the post-war planning was not done as effectively as it should have been.  And I think those are very serious disappointments.  But on the whole, both professionally and personally, my experience over 32 years in the Foreign Service has been something I wouldn’t trade for anything.

Vignette

One of the things that is most interesting to me about doing economic work in the field is the opportunity that you have sometimes to deal with very, very senior business executives, very, very senior Administration policy makers, or very senior Members of Congress.  One example I can think of right now is – I was assigned to Jamaica in the 1980s when there was consideration being given to a proposal by President Reagan that we create a Caribbean Basin Initiative that would provide trade benefits for Caribbean countries.  And we had a very senior delegation from the House Ways and Means Committee that was coming down to investigate this idea.  There was opposition to the proposal from labor interests in the United States, who feared that this idea would hurt American workers.  And I found it very interesting to have the opportunity to be just hanging out at the hotel with the Chairman of the House Ways and Means Committee and a number of the senior Members of Congress.  In the United States and Washington you often had the impression that you wouldn’t be allowed to get near these individuals.  Their schedules would be busy and even if theirs weren’t, the Congressional relations part of the State Department would do their best to make sure that only the most senior people had access to these Members of Congress.  But in fact, we were just sitting around hotel rooms.  We were able to talk about how the economy of Jamaica and other Caribbean countries operated.  And the next day we were able to visit some plants, where one of the Members of Congress was able to investigate, and he noticed that this plant was actually going to make textiles and some of those textiles might be sold in the United States.  But, on the other hand, the plant was using dyes made in the Carolinas, fabric that was made in North or South Carolina.  They were using Singer sewing machines and they were using light bulbs manufactured in New York State.  In short, he had a list that he compiled just from walking through this little factory that illustrated how much the United States were going to gain by being able to sell more of our products, if we gave this country and other Caribbean countries more opportunities to sell their products in the United States.  As I later heard from other Members of Congress, he told that same story over and over and over again throughout the consideration of this piece of legislation until it finally was enacted.

Reflection

I am an economist by training and received a PhD in economics, and so my training included a knowledge of economic history.  And knowledge of some of the past episodes the United States had gone through in the international economy had been very taxing for us.  One of those episodes was the run up to the Great Depression.  There have been a few times in my career where people have asked themselves, “Are we headed towards another depression?”  One of those times was in 1987 where we had the collapse of the stock market, which lost five percent or more of its value in a single day.  And there was lots of speculation: “Is this 1929 all over again?  Are there circumstances in place that would have a stock market collapse lead to a banking collapse, lead to a bout of protectionism, and lead to a Great Depression?”  And we had some high level discussions within the government, and I remember sitting in the large principals’ conference room in the State Department talking to all the leaders of the Department about why I thought the situation that we faced in 1987 was dramatically different from the situation that was faced in 1929-1930, and why, if we played our cards right, we shouldn’t have to worry about sliding into that type of economic morass again.  I’m not claiming that my remarks that day represent something you’d see published in the American Economic Review or in somebody’s PhD dissertation, but they were an example of an instance where having a knowledge of economic history and some of the experiences that the United States had lived through in the 20th century was helpful in making sure that people didn’t overreact to some bad economic developments in 1987.