Ms. Ruth Espey Romero, President of the Board of Directors of the Pan American Development Foundation

Members of the PADF Board of Trustees and Advisory Committee

Mr. John Sanbrailo, Executive Director of the Pan American Development Foundation

Ambassadors and distinguished guests

Ladies and gentlemen



I thank you for this invitation and the opportunity to say a few words about social and economic development in Latin America and the perspectives for the region. I also welcome the opportunity of serving as Chairman of the Pan American Development Foundation, the first non-governmental organization created by a multilateral agency. We have here tonight many great friends of Latin American and the Caribbean and the OAS who represent the very best private sector leadership in our hemisphere. We look forward to working with you to further expand your corporate social responsibility projects through PADF.

For over forty years, the Foundation has been a leader in creating economic opportunities for the least fortunate, promoting social progress, strengthening communities and civil society, and responding to natural disasters and humanitarian crises. At the present moment, PADF provides unique capabilities to the OAS and the Inter-American system and we should further enhance and expand them in supporting OAS priorities.

A number of challenges lie ahead for the hemisphere’s integration and overall future, and progress is needed on a variety of fronts. We must consolidate our democracies and strengthen our democratic governance; protect human rights; acknowledge that integral development is more than just economic growth and come up with a policy of multidimensional security that effectively addresses the main security problems affecting the people of the region.
Restoring democracy is a process that has required huge sacrifices and today we are proud to display the results of these achievements.
Democracy and the observance of human rights are the linchpins of a hemispheric coexistence, which must also be based on multidimensional security and equitable distribution of opportunities for growth and social progress.
Democracy requires free and fair elections and an unwavering devotion to promoting absolute citizenship in which the people enjoy the fullest civil, social, and cultural rights.
Democracy poses a major ethical and political challenge, which the Heads of State and Government took on in 2000, when they signed the Millennium Declaration. And this year, in November, our Heads of State and Government will meet in Mar del Plata, Argentina, to examine some of the most pressing problems in our hemisphere, particularly employment and poverty-related issues. In Latin America, there are 224 million poor and 96 million people living in extreme poverty. This is unacceptable, particularly since this is not in fact the poorest region in the world. It is the region with the most inequality, but not the poorest. One quarter of the people still live below US$2 a day, roughly the same as in the late 1980s. Poverty rates are unchanged from 1990, and are especially high among youth (41%).
It is difficult to talk about full democracy in a region with high rates of poverty and inequality. The OAS must strengthen its social agenda and spearhead a serious effort to promote the cooperation needed to conclude these pending tasks in a framework of strategies designed both globally and in each member country to achieve the Millennium Development Goals. We must become a more active partner in the global effort to achieve these eight goals. Meeting these aspirations is a way of consolidating the linkage between social development and human dignity. Addressing it requires a short-, medium-, and long-term strategy, focusing especially on the countries with the least developed and smallest economies and ensuring environmental sustainability.
While it is true that our region boasts educational institutions, health services, and housing on a par with those in the most developed countries in the world, it is also true that great numbers of our citizens still struggle in poverty, illiteracy, unemployment, malnutrition, and poor sanitary conditions.
Despite the ongoing recovery and improved prospects in recent years, per capita incomes remain below those in 1997 and the absolute number of poor people has increased since then. The region has lagged behind industrialized countries and the Asia region in productivity and GDP growth. Volatility and vulnerability to shocks are declining, but remain high. Latin America is on track to meet most Millennium Development Goals (MDGs), but if current trends continue, it will likely miss the extreme poverty MDG. Forecasts situate regional GDP growth between 4.1% and 4.3% in 2005 and between 3.7% and 4% in 2006.
Experience in numerous countries has shown that the goal of overcoming extreme poverty and hunger–the first Millennium Development Goal–could be achieved more quickly if growth went hand in hand with better distribution.
According to a study of the World Bank, economic growth has benefited the rich more than the poor. Indeed, the poor have seen only small absolute income gains since the late 1990s, with few exceptions: the poor in Argentina, Ecuador, the Dominican Republic, Paraguay, Uruguay and Venezuela have seen income losses in recent years; in Bolivia, Brazil, Mexico, Panama, and Peru they have seen little change; and in Chile, Costa Rica, El Salvador, Honduras, and Nicaragua, they experienced gains.
Some countries in Latin America and the Caribbean enjoy relatively higher income and stable growth (Chile, Mexico, Costa Rica). Most others are still highly vulnerable to adverse external shocks, ranging from Argentina and Uruguay with higher incomes to Brazil, Colombia, the Dominican Republic, El Salvador, Peru, and Venezuela with medium-range incomes, and Ecuador, Guatemala, Honduras, Jamaica, Nicaragua with lower incomes. Bolivia and Haiti are both very poor and fragile, moving in and out of crises. The region includes both large economies like Brazil and Mexico and many small states in the Caribbean, which are especially vulnerable to natural disasters and international price variations.
But integral development is more than just economic growth and must also take into account the principles of inclusion and equity as the true basis of prosperity; and carving out a policy of multidimensional security that effectively addresses the main security problems affecting the people of the Hemisphere. The ongoing challenge of strengthening governance requires collective action that goes beyond the work of governments alone. We must be capable of opening our institutions to the mobilization of society’s concerns, to the issues that matter to people, by generating sound and transparent mechanisms for participation, as the basis for forging the collective will of the people.
Studies on the region as a whole show a remarkable unanimity when it comes to finding out what people want. The average citizen wants a good job and income, a safe and secure environment for his/her family, access to education and public services, a voice on his/her future and good government. The peoples’ development priorities are consistent: economic growth, poverty reduction, improved education, reduced corruption and improved governance, infrastructure development.
The OAS has already made important contributions toward recognizing and implementing the values people share in the region. But shared values, by themselves are not enough. This is a policy-making organization. Policy is not only a matter of values. Positive results also count, achieved through public policies that put the principles of our hemispheric community into action. In order to enhance governance in our democracies, we must establish priorities in our programs so we can boost the development of sound institutions that serve to make citizens more secure, foster an appropriate climate for the economy and growth, provide justice for all citizens, defend human rights, and guarantee transparency in everything the government does.
More than half the budget of the Organization of American States is spent on social development-related projects. This is because some member states of the OAS are small countries that need those funds and make excellent use of them. A project that we might consider small for our own country may enhance the development of a small Caribbean Republic, which, in many cases, may not be particularly poor but which suffers from the social problems of small economies caught up in a globalized world.
The OAS must be prepared to promote partnership for integral development, combat poverty in the Hemisphere, and help design and implement national development strategies. In this endeavor, we must tighten coordination with the specialized regional and global agencies, the private sector, and the international community, thereby making for more rational and effective use of resources. Cooperation strategies must pay particular attention to the smaller and relatively less developed economies and be tailored to their specific needs.
The negotiation of a Social Charter of the Americas offers us the opportunity to move beyond our
differences and to agree upon institutional proposals that tackle these problems effectively. We
must set ourselves to the task of drafting the Social Charter without delay. But declarations alone
are not enough. Adequate mechanisms will have to be established, as well as a concrete Plan of Action to ensure that we remain firmly fixed on the objectives of the Social Charter. But our concerns must go even farther and be focused on providing our societies with enhanced conditions for good governance so as to ensure quality democracy, embodied in an institutional framework that is essential to finding a solution to the problems of citizens and foster their participation in public interest affairs. For that purpose, the OAS must promote programs to ensure that institutions function smoothly and are efficient and transparent. That is how active adherence to the democratic system will be encouraged, generating conditions of trust and security that make it possible to achieve growth and
equity, the two complementary pillars of development.
The Organization is facing a wide-ranging challenge in the promotion of sustainable development, based on a democracy that is moving forward but will be fully consolidated only when benefits to citizens in the political sphere are extended to them in the social and cultural spheres. Also, efforts are being made towards expanding trade and increasing competitiveness. In this context, trade liberalization has been a cornerstone of the development strategy of Andean countries and there is evidence that they have benefited greatly from export expansion and foreign investment in physical infrastructure. Countries must however recognize that trade liberalization is no panacea and that a complementary competitiveness reform agenda is essential to reap the benefits of increased market opening. Economic reform and prosperity is not a merely technical exercise, it is a political one. It involves the unpredictability and idiosyncrasies as it requires determination, creativity and goodwill of leaders and citizens alike. And there is no doubt in my mind that we have all of the above.
Thank you very much.