Department of State, Under Secretary for Economic, Energy, and Agricultural Affairs

Department/Agency: Department of State

Position:

Under Secretary for Economic, Energy, and Agricultural Affairs

Executive Schedule: Executive Level IV - Presidential Appointment with Senate Confirmation

Major Responsibilities:

• Lead State Department work in trade, agriculture and aviation 
• Coordinate international energy affairs

Key Competencies and Preferred Qualifications:

• International economic policy experience 
• Diplomatic experience 
• Investment banking

Insight:

The Under Secretary for Economic, Energy and Agricultural Affairs oversees the State Department’s economic policy bureau. According to its Web site, “The Bureau’s work lies at the critical nexus of economic prosperity and national security.”

The under secretary monitors financial markets with an eye to their impact on foreign policy. In May 2008, under secretary Reuben Jeffrey III addressed the worsening U.S. credit crunch at the British-American Business Council in London. “We meet at a difficult time for major financial centers and the global economy,” Jeffrey said. “In recent years, global economic conditions have been quite favorable, with world GDP growth averaging nearly 5 percent per year. This year, however, is proving to be more difficult, with headwinds coming from adjustments in the U.S. economy; financial market stresses; and higher food, energy and commodity prices. The U.S. economy, following an eight-year period of exceptional home price appreciation, is undergoing a significant housing correction. The weak housing market, high prices for energy and food, and stress in financial markets are slowing U.S. economic growth.”

Jeffrey highlighted the Bush administration’s hesitation to regulate the market. “U.S. policymakers and regulators are sensitive to the danger of contributing to market uncertainty through excessive government involvement, which would threaten the capital market innovation that is vital to U.S. and global growth,” he said.

Energy is an important part of the overall economic picture. Jeffrey, speaking at the Baker Institute Energy Forum, underscored the increasing challenges of securing reliable supplies of traditional fuels and investing in new alternatives. “Not since the first oil embargo in 1973 has the global energy security situation been as complex and dynamic as it is today,” he said. “Economic, political, security and environmental considerations are at play, sometimes in complementary ways; sometimes in competition with one another.”

The under secretary also deals with the strategic allocation of humanitarian aid. Jeffrey coordinated with USAID administrator Henrietta Fore on a $1 billion assistance package for Georgia following its conflict with Russia. The State Department’s chief economist reminded reporters that “the country was invaded and that’s a significant shock to the economy. Fortunately, the fundamentals of the economy going into this event were quite strong.”

Effective under secretaries develop good working relationships with their assistant secretaries, a  former assistant secretary for economic and business affairs told the Prune Book in 1988. He described the partnership he enjoyed with his direct superior: “We were alternates and tended to divide up issues — for example, he handled financial matters and I did trade, energy and resources. We didn’t duplicate each other, and tried not to attend the same meetings. It’s not meant to be a competitive relationship and it’s important that it not be.”

The next under secretary must build a team of colleagues in the Bureau of Economic, Energy and Business Affairs that can help him or her tackle the current crisis in the global financial markets, address growing energy concerns and strategically distribute economic assistance around the world.

Key Relationships – Within the Department or Agency:

Secretary of State
Assistant Secretary for Economic, Energy and Business Affairs
Deputy Director of Foreign Assistance
Regional assistant secretaries
Administrator, USAID
Under Secretary for Political Affairs

Key Relationships – Within the Government:

Under Secretary for International Trade, Department of Commerce
Under Secretary of Agriculture for Farm and Foreign Agricultural Services
Counterparts at Energy, Labor and Treasury departments
U.S. Trade Representative
National Security Council staff

Key Relationships – Outside the Government:

International businesses and industries
Trade associations
Financial institutions
Economists for foreign governments

Nomination Referred to:

Senate Committee on Foreign Relations

Current Position Profile:

1. Robert D. Hormats (Confirmed: Sept 22, 2009). Former Goldman Sachs, vice chairman. State Department, assistant secretary of state for economic and business affairs. U.S. Trade Representative, ambassador and deputy trade representative. White House National Security Council, senior staff member for international economic affairs. 

Recent Position Profiles:

2. Reuben Jeffrey, III, J.D. and M.B.A. (2007-    ). Former chairman of the Commodity Futures Trading Commission and special assistant to the president and senior director for international economic affairs at the National Security Council. Served as representative and executive director of the Coalition Provisional Authority at the Pentagon. Former special adviser to the president for Lower Manhattan development, coordinating federal efforts to help New York recover from the 9/11 attacks. Former managing partner of Goldman Sachs. Former lawyer with Davis Polk and Wardwell.

3. Josette Sheeran (2005-2006). Former deputy U.S. trade representative. Former managing director of Starpoint Solutions, a technology company, and president of Empower America, a free-market think tank. Former managing editor of The Washington Times. Now director of the United Nations World Food Programme.