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OAS Secretary General Calls for Fighting Inequality in Conference Organized by the IMF and the Ministry of Finance of Chile

The Secretary General of the Organization of American States (OAS), José Miguel Insulza, identified inequality as one of the most important social and economic challenges in Latin America, during a high-level conference organized by the International Monetary Fund (IMF) and the Ministry of Finance of Chile, in Santiago, under the title “Challenges for Securing Growth and Shared Prosperity in Latin America.”

Following the opening address of the conference, which was delivered by the President of Chile, Michelle Bachelet, Secretary General Insulza took part in a discussion panel that included the Managing Director of the IMF, Christine Lagarde; the Minister of Finance of Chile, Alberto Arenas; and the President of the Inter-American Development Bank (IDB), Luis Alberto Moreno. In his address, the Secretary General said that for the economies of the region, “our priority is returning to growth,” but in order to do so, important obstacles must be addressed, beginning with inequality, he added.

Secretary General Insulza highlighted the importance of the fact that, during the spring meetings of the IMF participants recognized “that inequality is a factor that limits growth, not just a consequence.” To address it, said the OAS leader, we must recognize that “we are not just talking about income inequality. When we speak of the poor in Latin America, we are speaking of indigenous people, Afro-Americans, female heads of single parent households, disabled people, and if we add all these people together, this is a lot of the inhabitants of this region that are poor,” said Secretary General Insulza.

The OAS leader warned that in the search for political reforms, “there must be a balance in the creation of certainty on one hand and the improvement of social conditions on the other,” given that “countries grow more when there is no uncertainty.” That is why, said the Secretary General, “consensus between all the political actors is so important, as it allows on one hand the application of the necessary reforms, but on the other it takes care not to damage the growth of the economy.”

The Managing Director of the IMF, Christine Lagarde, began by highlighting some positive elements in the economic panorama of the region, among them stronger growth in the United States, the lower price of oil – which will increase growth in importing countries – and the fact that the large countries of the region are focused on important reforms. On the negative side, Lagarde identified what she called “the end of the commodity supercycle” referring to the important role played by the export of commodities in the recent economic success of the region -, a slower growth rate in the global economy, and more expensive access to international credit.

The President of the Inter-American Development Bank (IDB), Luis Alberto Moreno, pointed to the increased participation of women in the economies of the region as a fundamental factor in the emergence of the middle class. In terms of the challenges of the future, Moreno emphasized the importance of creating social protection policies, and properly managing public goods to promote future prosperity. In addition, he pointed to the achievement of political consensus as one of the most important factors in addressing these challenges.

For his part, the Finance Minister of Chile, Alberto Arenas, focused on what he called the great comparative advantage of Latin America: its human capital. With lower expectations for economic growth, said Arenas, “the region has a great opportunity to invest in its human capital and in greater labor participation.” In doing so, said the Chilean Minister of Finance, the state is also addressing the challenge of inequality, which helps to manage the expectations of the population.

The conference in Santiago, which concludes tomorrow, Saturday, December 6, is focused on the importance of macroeconomic stability and the design of the frameworks of economic policy, to create an environment to reduce inequality, in a global context of volatility and uncertainty. The event is also an opportunity to prepare for the joint Annual Meetings of 2015 of the IMF and the World Bank, which will take place in Lima, Peru, and which will be the first to take place in Latin America since the meetings of 1967 in Rio de Janeiro, Brazil.

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

Reference: E-532/14