DEVELOPMENT PRIORIITES FOR THE AMERICAS IN TRANSITION

Let me begin by welcoming all of you here to the 8th annual meeting of CIDI. We meet this year in trying times. Many clouds loom on the horizon and great uncertainty in the international arena obscures the economic future of the American nations. Our challenge today comes after several years of economic difficulties for our member countries that began with the Asian financial crisis of 1998. After a decade of widespread economic reforms with major inroads made in addressing social issues in the early 1990s, we are losing momentum. It is abundantly clear that the results of the reform measures in terms of economic growth, job creation and advances in the battle to reduce poverty have been meager. In the aftermath of the 9/11 terrorist attacks on the United States, the economic downturn and the diversion of resources to address terrorist threat have magnified and increased economic problems in the Americas.


Today the American nations face a complex problem. The downturn in the global economy in the midst of intensifying global economic competition makes a difficult environment to achieve economic growth. And we are not succeeding. The World Bank reports that GDP contracted 1.1% in the Americas in 2002, a full 1.5% down from what the Bank originally projected. While the picture is different in each country, the pressure this has put on all national budgets has forced widespread cuts in social and anti-poverty programs. The Annual Report of ECLAC indicates that the total number of poor in the Americas now stands at 43.8%, higher than in 1980, with the percentage of indigent (those earning less than $1 per day) standing at 18.5%. The data show absolutely no progress since 1980. These figures, however, mask a far more disturbing figure -- the extreme poverty in our rural areas. When you segregate the rural area, the numbers are an alarming: 63% poor and 38% indigent. In total numbers, the panorama gives a more vivid picture of the challenge that faces us. In absolute numbers the poor have grown from 136 million in 1980 to 211 million in 1999 and the number of indigent from 62 million to 89 million.


Thus, the task ahead of us is daunting. The financial stress that all of our governments are experiencing is hobbling our efforts to address the problem. As usual, the poor suffer “firstest and mostest” in times of economic stress. In spite of this, however, there are bright spots. We have achieved much in the 1990s. We have a stronger base to build on than ever before. Democracy is well established, both civil society and the private sector are playing increasing important and constructive roles, and perceptible progress is being made toward accountable governance. Central governments in many countries are well on the way to modernization with increasing decentralization. And open economies are fostering competition and the creative forces of our people.


The Agenda ahead is therefore a prodigious one. The imperative of the moment is to face up to the reality of endemic poverty. In repeated summits, the Presidents of the American nations have called for accelerating the pace of development in the Americas. In Monterrey, Mexico, in April 2001, heads of state met to initiate a new approach to increase the flow of resources for development goals. The OAS and the CIDI have a special responsibility and opportunity in this regard to reformulate the hemispheric consensus and to institute new and more dynamic means to accelerate social development. Our responsibilities for various ministerial meetings that serve the social sectors give us a unique role in this regard among the international institutions that serve the countries. Let me take the opportunity to point to seven challenges that I believe that we in CIDI can and must address. Many of these relate to our core mandates and our unique assets: our relationship to the policy-making organs of the Americas and our ability to manage regional programs



1. The first is education. The goal of improving education has been a priority goal of the Summits of the Americas since the first one took place in 1994. The OAS has a special role in this regard since the Inter-American System, unlike the U.N., has no special agency to focus on the Education Agenda. In this sense, the OAS Specialized Organizations are an anomaly left over from the early days of the last century that really have to be address far more seriously. We have six specialized organizations, in health, agriculture, women’s issues, children’s issues, indigenous issues, and geography. We have nothing in Education. The resources that are devoted to develop and promote regional programs in education are dependent on the meager resources of the foreign ministries. The application of our best brains in the subject are unfocused and dispersed. This is an issue that must be addressed by our nations. There is no escape from poverty without quality education, there is no good governance without quality education. Attracting investment and job creation depend on it. The vitality of democracy itself, and the respect for the rule of law depend on it. We cannot continue to allow this vital area to be neglected in this laissez faire manner.



2. Second is the revolution in information, communications and transportation technology. We have in our hands an unprecedented opportunity to our governments. The IT revolution can now bring education to all and it can help us to leapfrog an historic obstacle to enable representative democracies that truly bring services to the people, especially in rural areas and drastically reduce costs. There is no better investment we can make than to train our young people in the skills of computers and the Internet, and to build the IT capacity in government and in the workplace. For the Caribbean nations in particular, in meeting after meeting, the prime ministers have states that building IT capacity is the wave of the future for its highly literate population. It is the challenge and opportunity of the century and we must not miss it. We can easily mobilize the resources to make this happen.



3. Third, is effective, accountable transparent government with respect for the rule of law. The capability to make a giant step in this direction and to overcome the hurdle of bureaucratic resistance is now in our grasp. Computerized information technology, especially in procurement systems alone, has been proven to save from 10-20% in procurement costs. In governments such as Peru, where government procurement reaches $3 billion annually, the minimal savings of 10% would be greater than the country receives in loans from the IDB. And the collateral effects of assuring transparency in government procurement will generate immeasurable confidence in democratic government and respect for the rule of law.



4. Fourth is regional integration and collaboration. The smaller, more vulnerable economies lack the staffing to implement many programs that are becoming available with the technological revolution. Once they are implemented, they will be able to maintain them – and be more competitive and viable. But the road to get there needs a lot of nurturing. We must foster regional cooperation to help our smaller countries benefit from the opportunities that are before them. Here is where the regional grant funds such as our FEMCIDI can make a major contribution. The OAS and IACD are unique in our capacity to foster regional and multi-national collaboration. We have to take better advantage of it.



5. Fifth is to accelerate the replication of our successful experience. The enormous investment made by the IDB and World Bank, more than $120 billion in new external resources over the last decade, have created many pockets of successful programs. We must find better ways to share our successful experience and to accelerate the replication of successful programs. The Agency has begun some initiatives in this direction, but the resources are far too meager for this important task. To do it well, we must do it with the highest-level professional staff. Therefore, it is incumbent on our governments – and not just our foreign ministries – to focus on whether we want this to happen and how to make it happen.



6. Making our efforts self-sustainable. There is no way that regional international programs can be financed by taxpayer money alone. We must courageously face the fact that the programs must be sustainable – and must merit sustainability. This means adopting policies that merit benefiting governments to reimburse the cost of the services they receive. Grants are important in many areas of international collaboration – especially to spark new initiatives to address poverty. But in the long run the test as to whether our programs are sufficiently useful must be met by determining whether the governments and sectors that benefit from them are willing to include them in their own budgets and reimburse the costs to maintain them. This is especially important for more costly initiatives such as the Educational Portal and some of the Best Practice efforts that the Agency is initiating



7. For our Inter-American Council of Integral Development (CIDI) itself. Our business is development. To perform this task effectively, we must become the hemispheric forum for the National Development Agencies and their equivalents in each country. No less an observer than former Secretary of State Henry Kissinger noted in his recent book that while development policy is an integral part of foreign policy, it requires a different type of experience and thinking. Development policy is concerned with long-term goals, and sustained effort, while foreign policy is often engrossed in short term issues. If we look at the sectoral coverage of our Council, there is no single ministry that can address our issues. Only professionals that are concerned with the broad spectrum of development issues for each country, setting priorities and coordinating international cooperation for national programs can effectively develop relevant hemispheric policy in this area. The OAS and IACD must engage these development agencies and develop a strong inter-active partnership with them. I urge our Executive Committee to consider ways to achieve this as part of its agenda for next year.



Taking advantage of these opportunities are well within our grasp. In our speeches and meetings we keep hearing talk about “doing something” -- about “”new ideas” Well, these are our suggestions as to what we must “do” address if we are going to deal with poverty and the social agenda. We must recognize, first, that the total commitment of all components of society to the process of social development is essential to success. This includes a major role for government, the private sector and civil society together. Traditional means of fighting poverty by governmental interventions alone have proven to be inadequate. There are several reasons for this: financial (severely limited by budgetary constraints), bureaucracy (traditional efforts processed through slow, wasteful bureaucratic procedures which resist innovation), uneven application of the law for poor people (lack of respect for the rule of law and corruption) and inadequate training and capacity building.



But at the same time we cannot bow to theorists who belittle the role of government. This defies the lessons of history. In most countries that have made deep inroads into poverty the government has had a vigorous role in fostering respect for the rule of law, in building human capacity and in addressing the problems of the inevitable skewed distribution of income that comes from merited rewards to creativity.



In reflecting on the most effective role for your IACD, we must face realistically our limited resources. But there is much we can do. The IACD has two very strong assets: We are directly related to the ministerial meetings that address the social issues, and we have the unique capacity to sponsor projects that foster cross border and regional collaboration. Thus, one of the key answers that the IACD has offered to these questions is the need to identify the successful experiences of some of our countries that have made progress in addressing the problems. We have to find better ways to make that experience available to other countries that seek to address analogous problems. For the smaller and more vulnerable countries, that have limited staff resources and small government budgets, this can most effectively be achieved through regional projects.



As we move forward, it profits us little to bemoan the difficulties of the present situation. Instead, we need to marshal our resolve to press forward with positive action programs, applying intelligently successful experience that has demonstrated that it can be effective in turning our vision into reality. Each of our countries needs to reflect on these issues as they relate to what needs to be done to advance social capital and develop a national consensus on the social agenda. What actions need to be taken to help overcome social divisiveness and poverty? What needs to be done to accelerate the replication and adaptation of successful experiences in this effort?



Our aim must be to bring together representatives of all sectors of society to provide their perceptions of the issues, to involve their energies, and to accelerate the achievement of a more aggressive social action agenda.

In doing this, we must address two fundamental questions: What are the most critical things we as international organization need to do to help the countries engage a national consensus in the battle to increase social action, and what must be our priorities to get there?



We have a positive suggestion on this score for the governments to examine. We believe strongly that there is an opportunity to foster the national consensus through national institutions that bring together public and private sector and civil society to address the social issues. Many nations have instituted such efforts to build a national consensus. We know that donors welcome such institutions and will be attracted to mechanisms that will involve them in decision making regarding social action programs. Social action endowments that are professionally managed, with transparency and accountability to sponsor quality programs to address social issues, are much needed. They will give teeth to building a national consensus and to accelerate the replication of successful experience. We have made such a suggestion in the idea of National Endowments for Social Action. Whatever name they go by, the goal is to build on existing institutions that foster social collaboration. We are confident such programs will attract donors grants and could be important vehicles for debt alleviation should the social pressures and financial stress of the coming years deteriorate, especially when interest rates begin to rise again.


In conclusion, I want to stress that our long-range policy solutions must reflect a vision of strong democratic institutions fostering and meriting the respect for the rule of law, vigorous programs to redress the social imbalances in our societies, and an enabling environment that fosters a creative and socially responsible private sector. Believe that the OAS, CIDI and our Agency have an important role to help the countries achieve that goal. I assure you that we will do everything we can to help in that task.