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OAS Secretary General Analyzes Economic Outlook for the Region at International Economic Forum of the Americas

The Secretary General of the Organization of American States (OAS), José Miguel Insulza, today analyzed the economic outlook for the countries of the region in the coming years, in his comments to the International Economic Forum of the Americas in Toronto, focused on the theme “Rethinking Growth.”

In his address to the opening plenary session of the Forum, dedicated to the issue “New Energy Landscape: Fueling Market Access,” Secretary General Insulza highlighted that the central challenge with which the governments of the Americas will have to contend in coming years is whether “the institutions and practices developed in the years of bonanza will be able to withstand the increasing, and contradicting, pressures of economic growth and competitiveness and demands for an improvement in income distribution, public services and accountability that come from their constituents.”

The OAS leader recalled that the period from 2002 to 2012 was a boom time for most of the region, which “allowed us to grow more in one decade than in the previous two decades put together,” and during which nearly 70 million people were lifted from poverty. This growth, added the Secretary General, was largely due to external factors, among them relatively high commodity prices and exports to a growing Chinese market.

“However, this situation has changed,” he said, “and Latin America is again faced with poor figures of growth, for the second year in a row.” “If there is some truth that we have learned about Latin America it is that our political and economic development has never followed a straight line, but has been full of surprises, successes and setbacks and carries several historical burdens which are never easy to shed permanently,” he added.

In addressing the challenges faced by the economies of the Americas in a time of slower growth, Insulza said countries would have to develop their potential by building economies “that allow the region to maintain high growth rates on its own without relying on erratic commodity prices in global markets or the abundance of foreign investment.” One major obstacle in addressing this challenge, noted the OAS leader, is that “while many good things can be said about the economic progresses of Latin America, domestic savings and investment continue to be our Achilles heel.”

Among the areas needing improvement for long term growth, said the Secretary General, are export diversification, improvements in the quality of education, public investment in much needed infrastructure, improving productive sector competitiveness and debt sustainability, development of the many energy resources needed for sustainable development, and addressing inequality, “recently defined by the International Monetary Fund not only as a consequence, but also as cause of low growth.”

In his conclusion, Secretary General Insulza noted that, in facing the pressures of addressing the challenges of growth and social inclusion, governments today are better prepared than previously: “The countries of Latin America have shown to be much more prepared to manage their economies, most of them have strong and healthy banking systems, have developed fairly open economies, run good fiscal balances and have manageable debts.”

The International Economic Forum of the Americas organizes annual summits bringing together heads of states, central bank governors, ministers and global economic decision makers. The event concludes on Tuesday, October 28. The Toronto Global Forum presents significant opportunities for synergies between stakeholders, speakers, business delegations and attendees onsite. Over the years, the event increasingly developed into a strategic platform for business development.

For more information, please visit the OAS Website at www.oas.org.

Reference: E-469/14