REMARKS BY L. RONALD SCHEMAN
EXECUTIVE SECRETARY FOR INTEGRAL
DEVELOPMENT OF THE OAS. AND

DIRECTOR GENERAL OF THE
INTER-AMERICAN AGENCY FOR COOPERATION AND DEVELOPMENT
REGARDING NEW SECURITY ISSUES AND THE IMPACT ON DEVELOPMENT IN LATIN AMERICA AND THE CARIBBEAN

Meeting of the OAS Permanent Council 
Washington, D.C. – October 31, 2001

Mr. Chairman, Mr. Secretary General:

          I am pleased to be invited to this meeting to address this important topic of the impact of the security issues on the development agenda of the Americas.  There is a certain irony that the same day the member states of the OAS signed the milestone Democratic Charter in Lima was the day that democracy in the world came under its fiercest attack.  On September 11^th, the nations of the Americas closed ranks to reach an historic commitment to democracy at the same time that one of the most savage challenges to democracy was launched.  The Democratic Charter that we signed on September 11^th set forth a commitment to attack poverty and redress social imbalances.  As a result of the events of September 11^th, in New York and Washington, D.C., however, the most vulnerable of our people face the gravest danger in decades. 

The economic outlook for the coming months is grim indeed. The events of September 11^th will have profound impacts on the global economy in all the nations of the Americas.  The economic impact of the events of September 11^th will undoubtedly prolong the economic downturn in the developed economies.  The reduction in consumer spending is adversely affecting three areas that are crucial to the economics of the Americas:  tourism, trade and remittances.  All are down significantly.  At the same time the cost of dealing with security will rise.  As a result of the budgetary squeeze, unemployment will rise and social programs affecting education, labor and poverty programs will suffer.  In this context, the agenda for social development becomes more important than ever. 

         The adverse economic climate is compounded by a series of other pressures that are affecting the nations of the Americas in recent months. The Caribbean has been suffering the loss of revenues from the problem of bananas and financial services.   In Central America a prolonged drought and depression in coffee prices has deeply affected their economies. 

         Several months ago, President George W. Bush addressed the World Bank and issued a call for the developed nations to alleviate the debt burden of the poorest of the poor nations.  More recently, President Fox of Mexico addressed the OAS and reminded is that real security will come only from addressing the underlying causes of conflict and violence, which have deep roots in our social and economic inequities.  These insights were profound and important.  It is vital that we do not set them aside in our grief and eagerness to deal with the immediate issues of security. 

         At this time, I want to report to you that the new Inter-American Agency for Cooperation and Development, and the Inter-American Council for Integral Development (CIDI), are prepared to take up the challenge.  CIDI, on a policy level, has an essential role for continuing the inter-action among the activities of the regional and sub-regional development institutions.  All the financial institutions look to the political entities for policy guidelines.  The potential role of CIDI in fostering a continuing dialogue among the governments and sub-regional institutions will be the major topic at the upcoming CIDI meeting on December 12^th.

         We have three immediate actions in front of us.  First, we have scheduled a full-day working session jointly with the Inter-American Development Bank on the day prior to the CIDI meeting, December 11^th, to examine the new security issues and their impact on the social development agenda.  This working session will bring together representatives of the leading institutions dealing with these issues with our National Development Agencies.   

Second, the strategic plan of CIDI is being revised to take into account the urgency of the new security issues.  This plan is currently being examined by the Council’s Executive Committee and will be ready before the December 12^th session.   

         Third, I am pleased to report that the financial measures we have been working on over the past year are ready.  Our new mechanisms will facilitate countries helping each other as well as providing new sources of income to those countries that have developed an expertise that they can export. This will be a year in which finance will be difficult for Latin America and the financing mechanisms which the Agency established with the private sector will allow co-financing with the international financial institutions, thereby stretching everyone’s money.  We have already had meetings and reached preliminary agreements with President Enrique Garcia of the Andean Development Corporation and President Pablo Schneider of the Central American Bank for Economic Integration.   

         The following specific actions are now ready to move to the implementation stage.  In trade and tourism, a best practices technical assistance project to help strengthen airport management and security is being discussed with the airport authorities of Colombia and Canada.  We know that several other countries are preparing efforts in this regard and we hope to be ready to collaborate with them.  

         In housing, those of you who have read today’s Washington Post may have noticed the article signaling the importance of expanding housing projects as a means to generate employment while satisfying basic human needs.  I am pleased to report that we have made considerable progress in identifying the Eastern Caribbean Home Mortgage Bank as a leading best practitioner in the area of housing and have advanced discussions to increase financing for the bank.  Similar discussions are underway with the Central Bank and housing authorities of El Salvador for low income housing with specific safeguards to protect against natural disaster. 

         Another major area in which we will concentrate is improving government procurement systems.  More effective and transparent procurement will help governments address the budgetary shortfalls and the economic pressures that governments will soon be confronting.  I am pleased to announce that the Agency’s first partnership for a development financial package is planned to be signed in Peru within two weeks. Under this agreement, Mexico will be providing technical cooperation to Peru to implement and adapt Mexico’s Internet e-procurement system. 

         Lastly, the Educational Portal of the Americas has now been launched at the meeting of the Ministers of Education in Uruguay in September.  In slightly less that one month, it has achieved over one million hits.  The staff has been overwhelmed by the initial success of the new initiative.  As it is relevant to the issues we are discussing, we are looking to develop special short courses in the area of security training for police and military forces throughout Latin American and the Caribbean.  We have discussed the possibility of implementing such programs with the Inter-American Defense Board and the University of Peace in Costa Rica as well as the Inter-American Commission on Human Rights.