Nominated by President Obama in 2009, Jose W. Fernandez ’77 serves as the Assistant Secretary of State for Economic and Business Affairs. Fernandez oversees the bureau, which handles international trade, finance, policy, development, as well as economic sanctions and support for U.S. business abroad.
“Economics is a critical part of foreign policy, just as important as politics,” Fernandez said in an interview with the Dartmouth Business Journal.
A major focus during his tenure has been “economic statecraft,” a term coined by Secretary Clinton, which involves using economic policy to strengthen diplomacy abroad and in turn, using diplomacy to strengthen the U.S. domestic economy.
A key component of “economic statecraft” has been finding ways to get U.S. companies more involved abroad, according to Fernandez. “The U.S. benefits when our companies do well, and our companies are an extension of American power,” Fernandez said.
In addition to “economic statecraft,” Fernandez’s tenure has also been focused on dealing with “swing state countries,” which are also referred to as “multipliers.” These are typically emerging countries and markets with which the United States can potentially partner to benefit our economies, like Indonesia, Turkey, and Brazil.
In the realm of “economic statecraft,” Fernandez spoke about the need for countries in North Africa and the Middle East to follow positive economic polices which create jobs and promote growth. Fernandez cites countries like Algeria, which has staggering unemployment figures, and Tunisia that had an unemployment rate of 20-30 percent, and even higher for young citizens. “If you put it in the context of many other issues, you realize it is a revolution waiting to happen,” Fernandez said.
The solution, Fernandez said, is regional integration. Middle Eastern and African countries have the lowest interregional trade in the world at around 5-6 percent, however if they engaged in trade their GDP could grow 6-8 percent.
“They need to pursue economic polices that create jobs, foster innovation, and have Arab countries trading more and opening their borders,” Fernandez said.
Fernandez also focuses on areas where economics and development converge, and U.S. companies can, for example, build roads and power plants to contribute to infrastructure. “It is a great example of doing well by doing good: companies that can profit, but can also benefit societies they operate in and by extension help American foreign policy,” Fernandez explained.
The North Africa Partnership for Economic Opportunity (NAPEO) has been a key joint project between the Aspen Institute and the U.S. Department of State. The Aspen Institute is a nonprofit international organization focused on fostering leadership and dialogue through various programs. A main objective of NAPEO has been to build networks between the public and private sectors, encourage American business in the Maghreb region, and foster entrepreneurship and a positive business climate.
Another key project has been Domestic Finance for Development that creates partnerships to help countries mobilize their resources, improve transparency, and battle corruption. “Developing countries have to ultimately own their own development by collecting their own taxes and fund themselves,” Fernandez said.
When failed states cannot support their state apparatus, expected services like police and medical help cannot exist, according to Fernandez.
Tax administration and collection is critical and in many countries people do not pay taxes because “they think it will end up in a Miami bank account,” Fernandez said. This issue ties into corruption and in order to deal with corruption people need to be shown budgets, and there needs to be transparency, according to Fernandez.
Today, the pressing issues the bureau faces include intellectual property rights, treatment of US businesses abroad, state-owned enterprises, and sanctions.
Intellectual property is an issue that goes across borders and affects U.S. companies. The bureau tries to get countries to enforce their intellectual property rights laws, Fernandez said.
The equitable treatment of US businesses in foreign countries and competing with countries with “national champions,” or state owned enterprises, have recently rose as pressing issues.
“We are making sure we are getting a fair shake when [American] investors go to India or China, that [U.S. businesses] are getting an even playing field,” Fernandez said.
Fernandez also indicates Brazil as a well-known emerging market, highlighting the nation’s discovery of “enormous petroleum deposits,” and hosting the Olympics. Within Latin America, Fernandez also calls attention to Colombia, which is “growing by leaps and bounds,” and Peru, which has cut its poverty rate.
“Peru has managed to cut their poverty rates in half, from 54 to 28 percent,” Fernandez said. “In 15 years, that is a great achievement.”
Prior to his service at the State Department, Fernandez was a partner at Latham & Watkins in New York and was the Global Chair of its Latin American practice. After earning his J.D. from Columbia University School of Law, Fernandez worked across European countries and in the EU as it was consolidating. His later concentration in Latin America veered off into Africa, involving mostly corporate work in buying and selling, financing and restructuring companies. He said his experience at his varied practice best prepared him for his work at the State Department.
Fernandez finds the “intellectual aspect” of his work at the State Department to be his favorite but most challenging part.
“The intellectual aspect is fascinating; the ability to learn new things and go from a meeting on agriculture to a meeting on telecommunications, and talk about Algeria and move on to Russia,” Fernandez said. “The intellectual diversity is what makes it interesting and challenging.”
At Dartmouth, Fernandez was a history major with a concentration in Latin history and Russian history. Prior to his appointment at the State Department, Fernandez served on the Board of Trustees of the College.
Fernandez encourages students interested in international business, economics, and development to travel and study abroad. He advises students to be “willing to immerse yourself in other countries and cultures…and being able to put yourself in their shoes.”