I have been in El Salvador ten weeks, and it has been an exciting time. One can feel the vitality and ambition of the Salvadorans. I also sense people have memories of the conflict they went through during the ‘80’s and a desire to keep moving forward and hoping for a good future. El Salvador’s commitment to opening new markets reflects this ambition. The completion of the CAFTA negotiations is a bold move for El Salvador and its neighbors in Central America. The movement is definitely forward; and now is the time for El Salvador and its neighbors to be bold.

I am impressed by the preparations El Salvador has been making for this future; its improved road system, efforts to maintain safety and security standards in airports, improved customs services and tax collections and promotion of exports, to name a few.

This is why I believe El Salvador is on the verge of a new period of economic opportunity and growth. The moving parts are falling into place; what’s left is to get the economy into high gear.

The United States and El Salvador have a longstanding, close partnership. We work together to combat terrorism, drug trafficking and international crime. Our trade relationship is growing and will grow further with the implementation of CAFTA. 2 million or more Salvadorans live in the U.S. and send home $2 billion annually; almost 19,500 American Citizens live in here. We help El Salvador work on poverty issues and the creation of economic opportunities for the poor. Each of these facts represents a platform for strong cooperation.

For these and other reasons, El Salvador is important to the President I serve. President Bush has asked me to focus on ways the U.S. can work with local and international players to get economic growth really moving. Hardworking Salvadorans deserve to see improvements in their quality of life as a result of their work.

This also helps the United States, given our strong trade ties. But we also know that a growing economy will strengthen democracy and regional stability. The leaders of the Americas committed in Monterrey to push for free trade and good governance, to growth with poverty reduction, to investing in people and to fighting corruption. Corruption saps the strength of democracy, impedes equitable growth and undermines the cohesion of society. Together, we can pursue measures to neutralize it.

I would like to share my view of what it might take to help El Salvador’s economy grow. Economic development has been a major interest of mine for many years. I have not yet mastered the ins and outs of the economy here. I do know, that the basis of development is jobs. Good development helps create jobs; and when they are the right jobs - it raises output, and this leads to new opportunities and more income for all.

We must better understand how many jobs El Salvador needs to create in order to grow the gross domestic product by one percent. Once we know the number then we have to identify the sectors that will provide new income opportunities for the future. I think you would agree that textiles, value added agriculture, tourism, new services like call centers, ports and light industry come to mind for El Salvador. How do we get investment and innovation into those sectors? What are the niche markets? What measures are needed to get us to the job objective? If we want to see job and income growth, we must work as partners—the US and other friendly countries, the Government of El Salvador, and the private sector.

I have had some experience in economic development at the local, regional, State and international level. I spent much of my career in New York State, which has a gross product of about $850 billion. When I was in the state Senate, we faced the issue of low-income housing and employment in New York City.

The city and many parts of the state lacked the ability to develop land once it had been cleared by the Federal Urban Renewal Program and make it productive again. I chaired the New York State Joint Legislative Committee on Housing and Urban Development. We passed and had signed into law the Urban Development Corporation which permitted municipalities to combine light industry with housing to create new neighborhoods in blighted areas. The problem that the city and state encountered was that obsessive regulations – irrational zoning and codes which once served a purpose but – were too burdensome; so that nothing could be built. The Urban Development Corporation resolved their issues and thousands of jobs and houses were created and several new cities were built including Roosevelt Island. UDC survives today as the Empire Development Corporation, New York State’s Economic Development Arm.

I raise this as an example of how development comes down to practical, concrete measures. I don’t suggest that these same measures can easily or should be adapted in El Salvador. But while we all agree that our economies need to grow if we are to provide continued improvements in the quality of life for our citizens, it is easy to overlook the need to come to agreement on concrete measures.

I know that a great deal of work has been done to identify the key to unleashing the economy. The Ministry of Economy has established a network of programs to help small businesses work past obstacles to increased domestic and export sales, a concrete program. There is also broader thinking. I am working my way through the FUSADES study that identified obstacles to and opportunities for promoting economic growth. It clearly focuses on the need to innovate, find new products and niches, and to strengthen the institutions needed to support increased trade and investment. I think it is a great report.

The recent World Bank conference was a useful first step toward defining what Central America can do in the context of CAFTA to establish the institutional basis for sustained economic growth. I understand that there was an interesting discussion in the session on creating the infrastructure for growth that dealt with the same issues I referred to earlier in New York. El Salvador has more work to do in strengthening institutions, such as the judiciary and regulatory bodies.

El Salvador needs concrete ideas and financial resources. While I would like to provoke more of a discussion of the different avenues to growth, these are not the Embassy’s decisions to make. Ultimately, the generation of ideas and the commitment of resources must come from El Salvador. These ideas should be supported by leaders in society and the business community, and those leaders include you.

The American Chamber of Commerce has been a positive influence. I know you are working hard to support CAFTA’s ratification. You also have a lot of practical experience and knowledge and I want to talk to you about your ideas.

I am committed to work with the private and public sectors to help El Salvador’s economy grow and create the jobs needed to address poverty in this beautiful country. This is only the first of what I hope to be many opportunities for us to meet and coordinate efforts that will result in more prosperity here. I wish you continued success.