U.S. Ambassador to Zambia Michael C. Gonzales recently addressed the Least Developed Countries (LDCs) Future Forum, highlighting the importance of fostering a competitive business environment to promote investment-led growth in LDCs. He emphasized that despite many countries achieving independence over the past six decades, numerous nations still remain underdeveloped. "Perhaps the cruelest irony is that so many of them remain among the 'Least Developed Countries,'" Gonzales noted.
Gonzales stressed the critical role private sector investment plays in driving economic growth. "Responsive governments can provide the conducive environment, and donors can provide much needed support. But, ultimately, it is private sector investment that drives growth," he stated. He underscored the failure of the assistance-led development model to facilitate sustained reforms needed for real growth.
The ambassador explained that government orientation significantly affects a country's ability to attract investment. Highlighting successful examples like Ethiopian coffee and Chilean mining, he remarked that countries creating favorable environments for business tend to realize their economic potential. Conversely, those controlled by "opaque, complex, and redundant licenses" struggle to secure investments.
Gonzales noted, "In this competitive global economy, capital is like water, it follows the path of least resistance." He warned that investors seek transparent and predictable policies, and the presence of corruption or complex processes could deter them from investing. Therefore, facilitating ease of business for existing companies is crucial.
Emphasizing collaboration, Gonzales stated, "Western embassies and governments often share your objective of increasing mutually beneficial commercial ties." He advised that governments partner with embassies to understand private sector insights, which could inform potential reforms leading to increased investment, job creation, and tax revenue.
He encouraged LDCs to utilize support from countries and organizations like the World Bank in pursuing business process reforms. "A true partner is not one that insists on non-disclosure agreements or wants special benefits for themselves," Gonzales concluded, urging LDCs to ensure transparent processes that boost investor confidence.