Office of the Press Secretary

For Immediate Release February 2, 1998

Hillary Rodham Clinton
at the Annual Meeting of the World Economic Forum

Davos, Switzerland
February 2, 1998
(Begin transcript)

PROFESSOR KLAUS SCHWAB: Dear Madam First Lady, dear Mrs. Hillary Clinton, it is with purpose that I address you in those two forms, because we welcome you here not only as the representative of a country which is the greatest power in the world, but we welcome you as a personality who in her own right has won high recognition for the causes you stand for as a relentless advocate for those who are disadvantaged and who need to be integrated into our efforts to improve the state of the world.

We have launched here, in Davos, a comprehensive initiative Trustees 21, to take on the challenges in the transition of human kind into the 21st Century. We are eager to hear from you. How you see the individual and collective priorities for our common future. Ladies and Gentlemen, let's welcome again Mrs. Clinton, a most remarkable, a most courageous woman of our times.

FIRST LADY HILLARY RODHAM CLINTON: Good evening, thank you very much Professor Schwab, and thank all of you for the invitation to address this forum. I appreciated greatly the opportunity to come and be part of these sessions, and to speak with you about the priorities for the 21st Century, as seen perhaps from a slightly different perspective from the one that brings many of you here to this conference.

After having looked at the program, and seen some of the sessions, I think it is probably more appropriate to refer to this gathering as the World Economic, Political and Social Forum, because certainly in the discussions that I have been privileged to hear about and to hear directly, it has struck me that there is a very strong awareness of how interdependent the economic, political and social spheres of life happen to be.

It is something that I think we need to pay even closer attention to. Certainly when one thinks about the economy, whether it is the economy of a business, of a nation state, or of our entire globe, one talks a great deal about the importance of and the significance of the free market. And I believe that as we end this century, any doubt about the effectiveness of organizing our economy along the lines of a free market, have finally been put to rest. That is one of the major accomplishments, perhaps, of this past century. That we now understand that the greatest capacity to create employment, income, wealth and investment is derived from a free market.

At the same time, I hope we have also recognized as we end this century, that we need effective, functioning, competent governments. Governments that are neither oppressive, nor too strong and authoritarian, nor on the other hand, so weak that they can neither deliver goods and services for the public good to their citizenry or play the kind of partnership role that they should in connection with a vital free market.

But if that's all we were to speak about, the economy on the one hand, and government on the other, we would be leaving out one of the most important aspects of what we should turn our attention to as we move into this new century, that is society, civil society, because between the marketplace and the government, is what exists that makes life worth living. It is the stuff of life. It is the family, it is the religious belief and spirituality that guide us. It is the voluntary association of which we are a member. It is the art and culture that makes our spirits soar.

I think as we look at the end of this century and the beginning of the next, it behooves all of us, no matter what our perspective or experience, to think hard about how we create conditions in which the economy, governments and the civil society all flourish. Think of it, if you will, as a three-legged stool. We are not stable if we are only on one leg, no matter how strong the economy might be, no matter how strong a government might be. We are also not stable if we rest merely on two legs of the stool. Rather we need to see the independence and connection among the economy, the government and the civil society. And more than that, I think we need to recognize the ways in which each of those spheres of influence are affected by the other. I know there has been a great deal of useful conversation here about what needs to be done to help manage crises such as the Asian crisis, how to better provide technical assistance for banking supervision and the regulation of markets in many countries around the world, even suggestions as to what could be done to create more of a global regulator atmosphere along the lines perhaps of a new Bretton Woods.

These are all very important conversations. And I hope that the economic and political leaders gathered here will certainly follow up on them through the various entities that exist, and perhaps some that are yet to be born, so that we can address these very important problems that are posed by the state of the economy today. We have also heard how important it is for governments to work with the economies of their countries and regions and globally, and how significant it is to find the right balance between regulation that permits real competition to flourish and that which stifles entrepreneurship. So there is much for governments also to ponder coming out of this conference. How can they do a better job to unleash the energies of their people to provide environments in which businesses can flourish? How do they become more transparent? How do they stand against corruption? How do they create the instruments that are needed for governments today to provide the kind of support for the economy at the same time that they provide the sort of capacity for their people to be able to thrive in this new economic environment? I will leave it to others, many of whom have addressed you, to speak about how we can do more to make sure that our markets do what they should do, and to make sure that our governments do likewise.

But what I want to address is this third leg of the stool. A leg of the stool that I think is too often given short shrift in such conversations as those that take place here, or perhaps marginalized as being something less than important to the significant business of governing and creating economic opportunity.

Our founders in the American republic at the end of the eighteenth century left us with some very good advice that they enshrined in our founding documents and which we have over our centuries of development attempted to adapt to modern conditions. They warned us about unaccountable power, they warned us about creating checks and balances, and they set up a system that they thought would create a balance of power. I think that is what we have to see in creating such a balance among our economic interests, our governmental and political activities and the civil society. One without the other will create an imbalance.

I have been privileged to travel over the past several years to many of the new democracies around the world, particularly in the former Soviet Union. I have seen what has happened to people whose spirits have been crushed, whose economies have been driven into the ground, whose governments were authoritarian, as they attempt to rebuild a sense of potential and opportunity for themselves. It is very clear if one visits these countries that economic opportunity will certainly provide jobs and income but not necessarily long-term stability or governments that understand their duties to their citizens. It is also clear that stable governments, as important as they are, may not bring about those conditions that are essential to creating long-term social stability.

So in my travels I have focused on this third leg of the stool, the civil society, and I have seen many changes within the last several years, as governments and economic interests understand that there must be created within society, the work ethic for capitalism to thrive and continue, a sense of citizenship for governments to be stable and succeed one another peacefully. And so how do we nurture this civil society? Why is it in the interest of business leaders, such as many of you, to worry about whether in the countries in which you do business there is an effort being made to create these civil society functions and institutions? Why should you care whether women are given the opportunity to go to school, or have health care, or vote? Why should you worry whether or not children are being taught basic lessons about democracy or not? Well, I would argue again that it is in your long term interests to do so: to have conditions in the countries in which you do business supportive over the medium and long term of what we mean by a free market, and to have governments that understand their appropriate roles.

So I would urge that as we look towards the end of this century, as many of you work on the important issues of helping to perfect the imperfect mechanism of a free market, worrying about the many inherent problems that have been pointed out, that lead often to instability, particularly in financial markets today. Those of you who are directly involved in helping governments in Asia and elsewhere understand why it is imperative that they reform themselves, that you also think about what we can do to strengthen civil society. How do we create conditions for families to be strong in an age where family values and where the kinds of ideas one would wish to pass on to one's children face very stiff competition from the consumer culture, from propaganda, and from a media that stresses short term gratification. How do we support religious freedom, making it clear that we will honor the spiritual beliefs and journeys of people different from ourselves? How do we work together to create conditions in which tribal and ethnic and racial and other differences among people can be controlled and kept in check. And how can we create opportunities for common enterprises that go beyond the differences that too often divide us? How do we nurture non-governmental organizations in societies have no history of voluntary or charitable activity? How do we create associations that stand between the marketplace and the government, but give people an opportunity to excersize their own skills to become good citizens?

All of these are questions that are being addressed in various ways by many organizations around the world. I have stood in barrios in Latin America and in villages in Asia and Africa where I have seen the effects of micro-enterprise on the capacity of women to make an income for themselves, and not only to make an income, but to feel empowered so that they can become citizens of their village and of their country, so that they can begin to understand not only how a market works, but how a society and a political democracy work as well. I have watched creative projects all over the world that have taken the very poorest of the poor, and empowered them to learn about what it means to live in a democracy. And I have talked with students on every continent about their hopes and aspirations that they will be able to navigate what to them seems like a very difficult journey into the next century. And they have asked for help and guidance, whether it is mentoring or internships or opportunities to work with businesses and government, so they can learn from adults about what works and what they can follow in their own lives and careers.

There are many large problems that confront us as a world. It is impossible to think of any corporation, no matter how large, or any government, no matter how powerful, addressing these alone. Whether we like it or not, we are more interdependent today than we have ever been. I believe that interdependence is a good development. And it should be respected by governments and businesses alike. Because through it we can meet mutual challenges of environmental degradation or security threats, and we can also work together to help build up strong, functioning markets, governments and civil societies.

I would just end these remarks by reminding us tonight that there isn't any perfect human institution. There is no perfect market except in the abstract theories of economists. There is no perfect government except in the dreams of political leaders. And there is no perfect society. We have to work with human beings as we find them. And we have learned a lot about what works. And the lesson of the global economy will certainly be that those who ignore the lessons that we have learned about effective functioning markets and political and governmental leadership will pay a steep price. That may be a necessary part of the learning curve. But as we go into the 21st Century, if we can keep in mind the balance of power among these three spheres that effect all of our lives, and if we can look for ways to work cooperatively together, then I think the doomsayers and the pessimists will be proven wrong. I wouldn't want to be more optimistic than conditions warrant, but I think based on the conversations that I've heard coming out of this conference, from people in a position to affect economic and governmental action, there is every reason to believe that there is a new awareness growing among the decision makers around the world about the steps that must be taken in order to ensure stability and sustained growth. I'll only ask that in that calculus, we remember the billions of men, women and children who are effectively without a voice, often without a vote, and that we understand that our long-term success, either economically or governmentally, will ultimately depend upon wether we empower them as well, to take their rightful places in forums around the world where they plan their own futures. Thank you very much.

SCHWAB: Mrs. Hillary Clinton, you have reminded us of our obligations, of our obligations toward society. As the First Lady, you have pursued an incredible active agenda to promote the social progress. Now, looking at the future, and I may ask you a very personnal question, what is your personnal priority for the remainder of the 21st Century in this respect.

CLINTON: You mean what will I do for the next three years?

SCHWAB: What will you in your own work put emphasis on?

CLINTON: I think I will continue to emphasize the issues that I have tried to speak out about, worked on, and addressed in my writing, and that is the need to invest in the future of children around the world. I don't know how many Americans in the audience heard Larry Summers say yesterday as it was reported to me that a child in Shanghai has a better chance of living to the age of five than a child born in New York City. But I hope if you did hear it, it caused some pause among you.

Of course it is not only in our own country where we have not done all we should to provide the opportunities for health and education and well-being for our children. It is certainly a problem that affects most if not all the nations of the world. And I believe it is the best investment we can make in long-term stability to provide opportunities for education, and healthcare, to work on thorny issues like family planning and environmental degredation that affect the well-being of children, and to do all we can to provide the best possible beginning for as many children as we can reach, and that is what I will continue to work on and speak out about.

SCHWAB: In this context, you have hear in front of you many of the CEOs of leading American companies, and you have been a proponent of moving toward the program of universal health coverage. The program to date has met mixed success, and generally little enthusiasm from the business community. So my question would be, why should the business community have this program as a priority? What would you tell the business leaders here in this respect?

CLINTON: Well I think your characterization of it meeting with mixed success was too kind. I still believe that economically, politically, socially, and morally, the United States would be better off if it provided universal health care coverage for all of its citizens.

I think the economic arguments will again come to the fore. There was a pullback in the cost of health insurance to the major providers of it in our country, which our employers during the last several years ... but that apparently is about to turn around, and the cost of insurance will once again begin to rise. There has been, since 1993, an increase in the number of uninsured Americans, and an increase in the number of underinsured Americans. I believe that should pose a question for all of us as to whether or not we think it is appropriate for our country, as rich and powerful as it is, to be denying access to the kind of preventive and chronic health care coverage that many people miss out on .

It is true that most people will be taken in by an emergency room, perhaps not the first one they visit, if they are not insured, but perhaps the second or third one if they are lucky enough to still be around by the time they arrive. And that if that were the only assessment we would make, we would say, well eventually everyone gets care. But we are paying a very big price for those who do not get timely or preventive care.

In addition, there is another problem, which is that there are many functions of the American medical system which have helped us to attain the high level of quality that it currently enjoys, which can never be profitable.

There is no way for most research to be profitable. There is no way for the education and training of young physicians or nurses to be profitable. And there is no way for charity care to be profitable. And those functions are primarily performed in our country by our great medical schools and medical centers. Because they cannot turn a profit on performing those functions which are performed to the benefit of our entire system, they are at great financial risk. They are being forced into mergers, and they are finding themselves in a position of having to cut back on those functions. That is like eating the seed corn of the American health care system, in my view.

So there are a number of problems in my view, and I think that there is an ideological opposition among many in the American business community to the American government being any part of providing universal care. But of course we provide universal care to our citizens over the age of 65 through Medicare. And we provide it at the cheapest overhead and administrative cost of any insurance program in the United States. I daresay if you went back and you talked to your benefits people or your CFOs, and you asked them what percentage of the health care dollar you were spending on your employees, that went to administration and overhead and profit, compared with the two cents out of the dollar that goes to Medicare, you would have to ask yourself, is this an ideological opposition that no longer makes economic sense, or shall I hang on to it while I find my capacity to provide health insurance for my employees further diminished, thereby creating more instability in the system. So I hope that we will continue to address these issues in the future.

SCHWAB: Under your husband's leadership, the US has emerged as a world leader in technology, finance, military power. What are the domestic key factors and priorities that you believe are required to maintain this leadership in the long run.

CLINTON: Well, I think my husband very well outlined those priorirites in his State of the Union last Tuesday evening. He was able to address the remaining issues that he believes should be at the forefront of the American political debate, both domestically and internationally. And I think that if one were to look at them they would fall roughly into the categories that he has already outlined and has been speaking about for many years.

The first is to provide conditions that offer economic opportunity to as many of our people as possibly can be reached, and that has been I think very effectively accomplished during my husband's administration. We are very lucky, I believe, in having a president who understands not only politics, but economics, and has a very experienced, seasoned team, which is able to implement that policy. And the result is that we have, as you all know, reversed some rather disturbing trends that we saw in the late eighties and early nineties and emerged very strong economically.

But it is certainly clear that we have not by any means finished the job that has begun, and the President spoke about providing better educational opportunities, so that we have more of our people trained so that they can take the jobs that are available in the global economy. He has continued to press for more trade agreements and opening markets because he believes that America can compete and do very well internationally and he will continue to press that arguement in the future. He has also spoken about trying to make it possible to put a floor, a social safety net, under some of our people, who are poorly educated, who are left out of the global economy through increasing the minimum wage again, and he has also talked about providing economic support for social security, child care, which is a very big issue in our country, with so many women working, and single women who are the sole support of their families, and our two parent families.

So I think he has outlined a very clear agenda for trying to provide more opportunity. At the same time, he has asked for more responsibility. Probably the clearest example of what that responsibility means is our continuing effort to reform our welfare system, to move people from welfare to work. He has also advocated strongly that Americans must be prepared to take their responsiblity as citizens seriously and has advocated campaign finance reform so that our electoral system can have the confidence of the people, which it should.

Finally, he sees very clearly the role of the United States in building a community within our country and being part of building a community around the world. He has put on the table a race initiative to address the still unfinished business of race in the United States. It is controversial. It is challenging many people to think hard about what they believe. But it is very important if we are to try to create, among our very diverse population, a sense of common destiny and shared purpose.

He has also tried to help the American people understand why the United States must remain engaged around the world. And here I would also address the American business leaders in this audience. It is imperative that those of you who understand the global economy, who visit and do business in many countries, share your knowledge of what you see occuring around the world with members of Congress, with leaders of your community, with anyone who you can reach, because we cannot build a public consensus for American engagement if the American business community is not a strong supporter of that engagement. And I would just ask that you think hard about what you can do to try to have your voices heard. One quick example, during the last session of Congress, when the President's plan for the United States to pay its debts to the United Nations, and to replenish our commitment to the IMF, came before the House of Representatives, it was not voted on because of a debate over whether or not the United States should continue to give family planning aid around the world to any organization that had anything however remotely to do with abortion. It was voted down. There was a coalition among people who believe the United States should not be engaged in the world, as well as those who are against abortion. There was a deafening silence from the American business community. I saw no press conferences. I saw no ads in newspapers. I saw no signed joint statements saying "we know what faces the United States around the world and we understand how important it is for America to lead and be engaged and we therefore raise our voices on behalf of American support for the United Nations, IMF and other multilateral institutions."

So I think the President has outlined a very clear agenda for where we go in the future. But it is not just the President's agenda. It has to be adopted and promoted by any who believe all or part of it in order for it to come to pass.

SCHWAB: In the same context, the fast-track trade legislation is very much at the top of the priorities of your husbands administration. What can you say also to the business community here to give the active and effective support for this legislative measure?

CLINTON: Well, I would probably just echo what I already said, at the risk of being repetitive. There was a very effective business effort in the United States on behalf of NAFTA. There was a very limited and ineffective effort on behalf of fast track. I don't know all the reasons for that. Some of them suggested, but I have no basis for any first-hand knowledge or any analysis that I find convincing. The bottom line is, however, that no one in Congress felt any particular pressure, or demand, by any business interest about giving the President the authority that other presidents have had to negotiate trade agreements.

Now again, I have to conclude that either American business doesn't care about opening markets around the world -- but I find that very hard to believe -- or they feel that their involvement in politics is something that they wish to minimize or steer clear of and don't want to become participants in any effort to pass such legislation, or some other reason that I have yet to understand. But the effect was the same. For whatever reason, the fact that the American business community made a very limited effort on behalf of the fast track, left the field completely clear to the rather unusual alliance between the right of the Republican party which is isolationist, anti-American engagement, quite critical and not supportive of the United Nations, IMF or any multilateral group, and the left of the Democratic party that believes that trade authority, and trade agreements are not in the interests of American workers. So that alliance carried the day. Now when the President comes back to the Congress with a request for fast track authority I hope that American business voices will be heard.

Having said that, I would add that there does need to be sensitivity to worker and environmental concerns in trade agreements going forward in the future. Certainly if they are going to be agreements that are negotiated with the United States government and require the consent of the United States Congress. So I think that there may be some good reason for business to engage early with labor and with political leadership in Congress and the Administration to try to hammer out a consensus about the kind of fast track authority and the sort of agreements that we want our President to be negotiating. But certainly that will not happen in the absence of some very stated and obvious business concern.

SCHWAB: I have here a question from the floor. What do you think about the impact of American culture on the civil societies of the rest of the world, especially with regard to language, publicity, media, and the right of difference for all cultures of the world?

CLINTON: Well, I think that is a very important question. If I may, let me just start by talking about something which I think I know a little bit more about which I think is the impact of American culture on America, and then expanding that beyond our borders.

American culture is America's biggest export. We export our fashions, our music, our movies. We export our technology, which comes, as you know, with a bias towards English. That is our biggest export, if one were try to add up all of our GDP that could be attributed directly or indirectly to culture. And on the whole I think it has been a positive development for my own country, that we have the kind of culture and cultural institutions and the messages that are conveyed from them.

I remember so well during the tumult of the years of the Velvet Revolution in the Czech Republic or the fall of the Berlin Wall, hearing story after story about how influential and important American culture was behind the Iron Curtain in giving people a sense of freedom and human potential and the idea that there was a bigger World out there. So I think on balance, American culture and its effects have been positive both in my country and elsewhere.

Having said that, I have long worried and continue to worry and am becoming more worried, not only about the messages of American culture, but the medium in which they are delivered. Let me explain. There is no doubt that we are creating a consumer-driven culture that promotes values and ethics that undermine both capitalism and democracy. In fact, I think you could argue that the kind of work ethic, postponement of gratification, and other attributes that are historically associated with capitalism, are being undermined by consumer capitalism. And I think you could also argue that the same relentless pressure for instant, simultaneous judgment and for people judging themselves based on their consumer materialistic attributes, is also turning people away from being citizens into being consumers. I think these are two very troubling trends.

In my own country, because we have a very broad understanding of our first ammendment, because we are dominated by commercial television, we have a relentless, unstopping, message of consumer, materialistic pleasure, combined with instant gratification that surely affects our children if not our adults. We combine that with the kind of programming that is popular on American television and we are beginning now to have research which demonstrates that the level of violence that our children see desensitizes them, affects how they view the world, decreases their empathy, makes them more apathetic, less likely to assess their lives in terms other than the purely materialistic. Exporting that cannot be good for any culture. And I hope that there will be ways for individual societies to cherry pick, perhaps, and try to take what is best about American culture, but mitigate against the effects of the undermining, damaging aspects of it as well. That too, is part of the role of the civil society. To mitigate against the excesses of both the market and the government. And it will be critically important for schools, for families, for religious organizations, for associations like scouting, for example, to try to help balance the messages of the materialistic culture. And I think it is one of the biggest challenges we will face in the next century, because certainly there is no stopping the information explosion. There is no turning back the clock on what will be delivered through televisions and computers into the homes of people throughout our world, but we are going to have to think very hard about our responsiblity as business leaders, political leaders, parents and others in our socities, about how to mitigate against the excesses of that culture.

SCHWAB: Mrs. Clinton, I have three questions which seem to be very appropriate to conclude our sesssion.

The first question is the following. If you had three concrete wishes to be shared here with the business community, actually which you want to be seen executed by the business community, what would be those wishes. In really concrete form, what would you wish the audience to do over the next year or going away from Davos.

CLINTON: That is an impossible question, and I will do my best to answer it. I think that I would hope that going away from Davos, the leaders who have gathered here, both from business and government, will take seriously the challenges that many have issued from this and other stages to look for ways to try to make sure that our markets function effectively and we do what we can through individual businesses, nation states and globally, to ensure that that comes to pass, whether it is being part of providing technical assistance to governments and businesses that need to learn how to be transparent, how to be able to operate in a regulated environment to their benefit, and there is much work that can be and I hope is done and I hope business leaders will urge government leaders through entities like the G-8 and the IMF and others, to try to move towards some kind of consensus about how we need to address these issues that the market has presented us with.

Similarly I hope that governments will be encouraged to be as transparent, as reform-minded as possible, wherever necessary, and that business leaders will support government reform in doing so, and that we will have the kind of functioning partnership that is so necessary for the next century, between business and government throughout the world, and that we will do away with the false debate and the false choice that too often dominates our debate in America, where there is an unnecessary and I believe false antagonism created between business and government. They need each other, they need to support each other for the kind of long-term stability that both require to function well.

And finally I hope that business and government leaders will do more to support the civil society. In your own countries, and throughout the world, wherever it is possible. There are many good ideas and programs that are working. I wish everyone of you could have been with me at a village in Bangladesh, or at a women's bank in India, or at a lending project in Africa, or in a very poor neighborhood in South America, to hear what a difference a little bit of credit makes in the lives of the poor. We now have a proven track record from institutions such as the Grameen Bank in Bangladesh, that the poor, if given credit to buy another milk cow or a goat, or hire a rickshaw to go into business, are the best credit risks in the world. Most commercial banks particularly in today's environment, would die for a repayment rate of 96 to 98 percent, and that is what the poorest of the poor in these countries and in these programs have proven themselves capable of doing, at market interest rates.

Secondly, invest in opportunities for women around the world. If you look at any developing society that is making progress, there is a correlation between those societies that invest in women and those that are demonstration economic and political development and stability. In many instances women are still left out or shut out. We cannot go into this new century with half the world's population not empowered to act in their own best interests and in the best interests of their families. And that is what you will get when you invest in women. The investment will be very well taken care of, based on all we know, because it will in turn be invested in the community and in the family, and particularly in the children.

Thirdly, do not think of education, health care, and other issues as tangential or marginal. In many respects they will determine the long-term stability of the countries in which you do business, in the quality of the workforce that you employ, in the capacity of the consumers to whom you wish to sell your goods. It is in all of our interests to be more effective in investing in education and health care throughout the world, and wherever there is a particular pocket of poverty in an advanced economy, to take what we have learned about welfare reform and other strategies, and attack them through empowerment zones or tax credits or breaks for investment that can begin to provide opportunity in even the most destitute of communities.

And finally, I guess I would ask that we all be more thoughtful in looking at the world in which we live. That we work very hard to rid ourselves of preconceptions and assumptions and stereotypes. That we shelve our ideologies, whether it is of a conservative or a liberal bent. That we realize that conditions have changed, and with it must change also how we see the world, and how we interact politically, economically and socially. So not to rest on old conventions, but instead to be questioning them as well.

We have a great opportunity, as all of you know or you would not be here, to be, as Professor Schwab has titled it, trustees for the 21st Century. But we can only fulfill that responsibility if we understand that we are doing it not for ourselves but for generations to come. And so those, in a very general way, would be my three wishes.

SCHWAB: That was the best answer and the best end of such a highlight of our annual meeting. Nevertheless, nevertheless, I would take on one other question which came from the audience, and it says, don't you think it is time at the beginning of the next century for the U.S. to elect and support a strong, brilliant, woman for the job of the President?

CLINTON: Yes, and I look forward to voting for her!

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