Woodrow Wilson News & Publications
WW NEWSLETTER EXTRA: Spring 2012
"On a Scale the World Has Never Seen"
David Mulford WF '61 Witnesses the Rise of the Global Economy
Katharine Andriotis Photography, LLC
As a new global economy has emerged over the past half-century, Ambassador David C. Mulford WF '61 has had a front-row seat—indeed, a significant supporting role. "My entire career," he says, "has been devoted to the globalization of the world economy and capital markets, either in the private sector or in government."
Currently Vice Chairman International at Credit Suisse, Ambassador Mulford has been in the global arena since graduate school. At the beginning of the 1960s, he studied emerging democracies in Africa at Oxford. In the 1970s, he helped Saudi Arabia create its first-ever sovereign wealth fund. In the mid-1980s, President George W. Bush appointed him Assistant Secretary, then Under Secretary for International Affairs at the United States Treasury, where for eight years he was the U.S. deputy to the G5 and later to the G7. And, from 2004 to 2009, he served as U.S. Ambassador to India, as that nation rose rapidly to a new level of global influence.
"With the financial crisis of 2008, we arrived at the end of a long cycle of global markets evolution which my career just happened to have matched," he says. "It began following the Second World War. If you had asked the leading statesmen of that time—founders and leaders of the United Nations, the World Bank, the IMF, other institutions formed after the war— 'What are your key objectives?' you would have heard one constant: That we must seek to spread freedom and prosperity more widely in the world. And if you look at the period from, say, 1960 to 2008, that is exactly what happened. We have gradually worked towards global markets. Freer movement of capital, of goods and services, of people, of technology—all of this has created a global economy, which has in fact spread prosperity and growth more widely and on a scale the world has never seen before."
After his undergraduate work in economics at Lawrence University, Mr. Mulford studied Africa's independence movements as a Woodrow Wilson Fellow at Boston University, and then arranged with the Foundation to finish his doctorate at Oxford. In 1965, he was in the first class of White House Fellows, assigned to the U.S. Treasury. He recalls, "I could see that if things were going to be organized and accomplished, it would be closely tied up with money and finance. So I thought, why don't I try to understand how the U.S. economy works? I opted for that assignment, and that changed my life."
With his newfound interest in international finance, Dr. Mulford joined Wall Street's White, Weld & Co., and was soon working in London in the new Eurobond and Eurocurrency markets. Then, in the mid-1970s, White, Weld seconded him to lead an advisory team in Saudi Arabia, which was experiencing massive inflows of cash—up to $100 million each day – following the 1973 oil price increases. "King Faisal felt they were being overwhelmed with this money and were too dependent on commercial banks, while the commercial banks themselves were being filled with Saudi deposits so quickly that they were nervous about having too much Saudi exposure," Dr. Mulford explains. When the King sought counsel from White, Weld, Dr. Mulford became the senior investment advisor to the Saudi Arabian Monetary Agency (SAMA). He would stay in Saudi Arabia for nine years.
"SAMA was a central bank—a government agency, not constrained by taxation and other cross-border regulatory rules. It enjoyed government-to-government financial relationships that permitted access for SAMA to all the main national markets, which in those days were not fully open to cross border flows. So I witnessed the growth of a global market under the surface of a more regulated and fragmented world, in a way, before the global market took shape. And then, as other countries began to deregulate and relax their barriers, in the 1980s we had a real global market emerge," Dr. Mulford observes.
This perspective and his previous Washington experience helped prepare Dr. Mulford for his next post. Donald Regan, then-CEO of Merrill Lynch, received in-person reports from Dr. Mulford on the Saudi project after Merrill Lynch bought out White, Weld. When President Ronald Reagan appointed Mr. Regan Secretary of the Treasury, he called on Dr. Mulford: "You know more about global capital movements than anybody else; why don't you come to Treasury?"
At the U.S. Treasury from 1984 to 1992, Dr. Mulford served first as Assistant Secretary, then Under Secretary for International Affairs. As the United States' finance deputy to the G5 and later the G7, he prepared economic summits for Presidents Reagan and George H.W. Bush. Those same years saw the fallout of the Latin American debt crisis, German reunification, the collapse of the Soviet Union, and the first steps toward creation of the euro—" all events of the 1980s and early 1990s based on globalization," he points out. (During his tenure as Under Secretary, Dr. Mulford also oversaw the work of Special Assistant Timothy Geithner, now Secretary of the Treasury.)
A decade later, now Chairman International of Credit Suisse, Dr. Mulford received another call from Washington—this time from Secretary of State Colin Powell, conveying President George W. Bush's request that he serve as U.S. Ambassador to India. He recalls saying, "I never thought about being an ambassador. But if ever I was I would only be interested first in India or second in China." The Secretary's reply: "Luckily for you, David it is India where the President thinks weneed somebody who's a practical, financial, business person, and also has worked in government. They are really on the move."
Ambassador Mulford was posted in India from 2004 to 2009, a period in which that nation rose rapidly as a global economic power. He explains, "India's average economic growth rate for its first 45 years after independence was 3 to 4 percent, which meant that, given their population growth, India generated a massive growth in poverty. By the end of the 1990s, India had lifted its growth rate to about 5 percent, and in the years following it grew at 6, 7, 8, 9 percent and even broke through 10 percent."
During his tenure as Ambassador, he notes, India "established itself as one of the two key emerging market countries in the world, with a hugely important future in world affairs." He also participated in delicate and controversial negotiations that led to India's access to the world of civil nuclear commerce, after 35 years of isolation and despite its being a nuclear weapons state. "That important strategic initiative will permit India to develop a significant civil nuclear industry and prevent it, in the long term, from becoming the world's largest polluter," he observes.
Ambassador Mulford ultimately became the longest concurrently serving U.S. Ambassador to India (one other Ambassador served there twice), and the United States mission there became the largest and most diverse in the U.S. Foreign Service, with 2,300 employees and four consulates in Indian cities. "The U.S. interface with India has this enormous diversity, hugely motivated people and led by the private sector and civil society, as well as by government," he observes. "It's a very vibrant interface"—appropriate, he adds, for relations between the world's oldest democracy and its largest and most diverse democracy.
Today, having returned to Credit Suisse as Vice Chairman International, Ambassador Mulford reflects on his extraordinary career. A Rockford, Illinois native, he says young people always ask him how someone from a small town and a small college in the Midwest became such a global figure. His response: liberal arts education. "The most important thing about education is not information; it's confidence," he says, "and confidence is built by understanding more about the world and the study of human history. You come to realize that most everything that's going on has already happened in some form in human history.
"If you have a sufficient base in a wide variety of subjects, you feel confident that you can cope with new opportunities in the kind of world we live in today. So it's turned out that I'm a great advocate of liberal arts education."