Media Center



January 19, 1995 - Washington, DC

"The political will to push forward trade liberalization and economic integration is very strong. This goal is so widely shared, and is such a high priority for the continent, that nothing can stop it."

I am delighted to be here today with you to discuss the future of the Americas. As a former Minister of Finance, I value what you have done, and can do, for our Hemisphere. I am grateful to the Banker’s Association for Foreign Trade for this invitation.
The timing of this meeting could not be better, even though the financial world is being affected by seemingly opposing forces. On one hand, there are the events of Mexico, and, on the other, there is the unstoppable march towards the globalization of trade and finance. This has created confusion. But let me say, there are sufficient grounds for hope in the vast possibilities that an open and integrated hemispheric economic system offers.
First, allow me to review progress in the areas of trade liberalization and economic reform in the countries of Latin America. You are well aware of the success of NAFTA and what it has meant for Canada, the United States, and Mexico. But NAFTA is not the only success story in the Hemisphere.
In the Americas there are more than 23 trade liberalization agreements, including MERCOSUR, the Andean Group, and the G-3 agreement, as well as many bilateral agreements. These have knocked down barriers that isolated our countries for decades, and have opened up a "new land of opportunity" for finance, trade, and development.
Intra-regional trade has taken off. U.S. Trade Representative Mickey Kantor estimates that by the year 2010, the United States will ship more exports to Latin America than to Japan and Europe combined.
The heads of government of the democracies of the Americas, in an unprecedented move, are committed to go even further. They decided to build a hemisphere without economic borders by converging the many trade liberalization agreements into one single scheme by the year 2005. They also agreed to free up financial and capital markets. In all candor, when one reads the text of the Miami Declaration, it is like reading the charter of the Banker’s Association for Foreign Trade.
The political will to push forward trade liberalization and economic integration is very strong. This goal is so widely shared, and is such a high priority for the continent, that nothing can stop it. The only true obstacle is isolationism in the United States. Should this attitude prevail, it would deny the benefits of hemispheric prosperity to the producers and bankers of this country. If the United States decides to remain on the sidelines, others will take its place.
Fortunately, the timely response of the Clinton Administration to the events in Mexico, currently being discussed by Congress, is further evidence that this country is well aware of the need to stay engaged in promoting stability and economic reform in the Hemisphere. This is very encouraging, and should be interpreted as a positive signal to the financial and capital markets.
There is another powerful reason to keep the faith in the future for the Americas laid out at the Miami Summit. Everywhere, governments are pursuing macroeconomic prudence, sta-ility, and economic reform. Throughout Latin America, fiscal discipline, efforts against inflation, and sound management of macroeconomic variables have predominated. There is always fluctuation, but it is difficult to deny the overall trend in the region toward orthodox economic management with economies open to world markets.
I would venture to say that no other region—not even Asia—has shown a greater capacity than Latin America to accept sacrifice and periodically make the difficult decisions required for sound economic management. For example, President Zedillo of Mexico should be praised for the direct and profound way he has put forth the adjustments needed to correct the short-term problems affecting the Mexican economy without abandoning political reform.
If anyone is a reliable partner for the financial community, it is precisely the person willing to use the necessary discipline to maintain credit worthiness outside financial relationships. A few years ago, in the view of many international bankers, countries such as Peru, Bolivia, and Argentina were lost causes. Now they are stars among the developing economies. Chile and Colombia are two other very good examples of economic success.
Latin America’s inexhaustible ability to recover and move ahead is an additional reassuring guarantee for those of you who seek long-term relationships. Though there will be difficult circumstances, keeping faith in the Americas will be generously rewarded.
But it is not only the political will and action of the governments that should foster confidence in the economic future of the Americas. One of the things that most stimulates hope in Latin America is the silent revolution that is happening in the private sector.
While in other parts of the world the transition from planned authoritarian economies to free and democratic systems has been traumatic, in Latin America there has been an explosion of entrepreneurship and private initiative. The freeing up of markets, deregulation, and privatization have fostered a new kind of entrepreneur in the Americas—one with a more global vision, one hungry for joint ventures and foreign capital, one who assumes the gigantic task of replacing government intervention and bureaucracies with innovative and profitable private-sector solutions.
And this leads me to a final comment. Many in the financial community are also worried about the potential threat of political instability in the Hemisphere. The democratization of Latin America is certainly a recent phenomenon. Only a decade ago, most of the Hemisphere lived under a form of authoritarianism. But today, practically the entire Hemisphere has made a firm commitment to democracy and respect for civil liberties.
At the Summit of the Americas, the leaders reaffirmed that effective democracy is the only basis upon which to build an integrated and prosperous Hemisphere. The Miami Summit, furthermore, adopted institution-building programs, and other initiatives for social change, and even directed the OAS, the IDB, and the World Bank to finance policies for reforming and deepening democracy.
But I must also state that I, too, share the notion that much remains to be done to strengthen democracy. Crises will no doubt come, but at the same time I see a general willingness to press forward with the consolidation of democracy.
You have invited me here to speak to you about prospects for the Americas and about the role of the banking sector and financial brokers in building the future of the Hemisphere. As you will see, I am on the side of those who find sufficient political, economic, and social arguments for believing in the possibility of a prosperous and democratic tomorrow in the Americas.
That, however, can only come if people like you clearly see the vast opportunities that exist for everyone in that common future. To you I say keep the faith and, with the perspective of a long-term view that transcends any particular episode, be partners in the progress of the Americas.