Illusions in International Trade

October 25, 1991

For years, proponents of Maryland's International Division have kept critics at bay with impressive numbers on new jobs, foreign investment and export sales flowing from lavish trade junkets. Six trade missions to Europe, East Asia and the Middle East cost the state $734,000, but supposedly generated 800 new jobs, $140 million in foreign investments and $100 million in export sales. As it turns out, the state's return on investment was far more modest. A recently released legislative audit reviewing a sampling of those claims discovered that 256 of 336 jobs were never created and that $13 million of $31 million in promised capital investment never materialized.

What's more, the audit found that participants spent a lot more time shopping and sightseeing than extolling Maryland's virtues to foreign business interests. Participants racked up more than $2,400 in entertainment expenses that had nothing to do with the purpose of the missions. And state travel regulations were routinely flouted: frequent-flier miles racked up on agency business were used for personal travel. Employees were reimbursed for meals above standard allowances and for more than $800 in alcoholic beverages.

This is damning news at a time when all eyes are trained on government waste, real and imagined. Worse, it damages the credibility of Maryland's push toward economic diversification via exports.

Mark L. Wasserman, secretary of the Department of Economic and Employment Development, acknowledges that the agency needs to "tighten up" its ship. One encouraging sign is the departure of former director Eric Feldmann, who left amid increasingly vocal criticism about his competence and managerial style. The challenges facing his successor will be great. Given the state's continuing financial troubles, support from the business community and political leaders is essential. Both are running low at the moment. The division needs a tighter, more coherent focus. There also may be more efficient ways to deploy the $2.1 million spent on permanent foreign outposts in Tokyo, Brussels and Hong Kong.

Mr. Wasserman hopes to have a new director in place before the end of the year. We urge him to move cautiously. International trade holds great potential for hundreds of Maryland companies as opportunities shrink in domestic markets. But turning potential into reality demands much more than flashy, lavish trade junkets to exotic places.

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