Media Center



November 15, 2010 - Atlanta, Georgia

Perhaps the best contribution we can make to the valuable efforts of José María Figueres and Arturo López-Claros, is to comment on how we see the characteristics they have mentioned reflected in our region, Latin America and the Caribbean, because I believe we all agree that competitiveness is not merely an economic factor. At the start of the discussion, the moderator said that, during the 1980s and 1990s, this was possibly the problem; people considered that it was a purely economic issue and competitiveness was sought by lowering and transferring costs. But competitiveness is much more than that, as shown by most successful countries which have excellent social security and pension systems and pay good salaries. I refer, for example, to the Nordic countries which are extremely competitive.

Consequently, I am aware of all the dimensions of competitiveness that you explain so well in this document; however, I would like to refer to what, in my opinion, are the main issues. Since Pamela Cox and Enrique García will be speaking later, and I have no doubt that they will refer above all to the economic aspects of competitiveness, I will merely mention them. Evidently, the issue of infrastructure is important, and also that of the free market but, in addition, I would like to stress: it is a political issue also.

I believe that the momentum in favor of free trade is losing ground in the Americas, and for a very practical reason that I will explain immediately: this is the country of free trade; it is the United States that has been the motor behind the major efforts and the most important actions as regards free trade in recent decades. If the United States is hesitant about free trade, and there are some free trade agreements such as the one with Colombia and the one with Panama that are still pending, everyone begins to waver; also because free trade does not come from Europe and it does not come to us from within. Free trade has always been successful when there has been a strong United States initiative and we do not see that at this moment. That is one concern that I wanted to mention in the political-economic area even though I think we have progressed over the years in this area.

As I have just said: infrastructure, market access, these are issues that will certainly be dealt with by other participants. It is important to recognize the progress we have made in these areas. It has been said here that Latin America is no longer the indebted continent; in fact, Latin America is in positive numbers in terms of debt: it is owed more money that it owes. Conversely, Latin America – and this is also a good sign – is in negative numbers as regards capital; in other words, it is exporting less capital that it imports, and that is also very satisfactory. We have advanced considerably, but I believe that, in some aspects, especially the political aspects, we need to make much more progress.

When we speak of competitiveness and investment, people associate this above all with stability and I am not yet referring to democracy, because in Latin America, stability means democracy, but in other parts of the world this is not so. When making investments, some Asian countries do not go looking for democratic countries specifically, but rather stable countries, in the sense that the rules of the game are not changing, and in which although change occurs – in the Government’s focus, or in the incorporation of more people into the domestic market, or in many other aspects – policies will not change. China is probably the best example of this; I don’t think anyone believes that Chinese policies will return to the times of Mao Tse-tung; everyone considers that Chinese policies will be stable over the coming years and this is fundamental. India has also taken measures from which we can learn.

In Latin America there are often fears about stability. I remember a President who said that he had made every effort to attract private investment to his country, but had not obtained the desired results. I told him: Mr. President, you obtained 52 or 53 percent of votes compared to your opponent who obtained 47 percent, and who said exactly the contrary to what you said. If I was going to invest in your country, I would probably ask myself about the risk of the 47 percent becoming the majority. And that is a problem we have in Latin America. In Latin America, there is still a relatively timid attitude as regards effective incorporation into the global economy, from the perspective of both trade and investment.

When people ask me – the moderator asked me and I am therefore going to answer him – about Chile over the last 20 years and in the future, I say that the miracle is not that we are better or that we have built up considerable infrastructure to manage the economy, but rather the miracle resides in the political pacts. How can we not be satisfied when the Congress of one’s country approves unanimously the MERCOSUR treaty in the Chamber of Deputies and in the Senate, with only two votes against by two parliamentarians of different parties and agricultural regions? How can we not acknowledge a country that approves the Uruguay Round agreements unanimously in its two Chambers and where everyone in some way supports the same economic principles, with nuances evidently? Some want social spending to be made in one way and others in another; some want to increase taxes to “X” and others to “Y.” But, at the end of the day, a significant consensus exists and I believe that, in Latin America, political consensuses are required that guarantee the stability.

Of course, what is also needed is the aspect that anyone who is going to invest examines closely: the rule of law, the certainty that laws and regulations will not change and will not be amended. This problem exists in our region and we much obviously seek ways to guarantee stability in this area also.

There are problems as regards corruption, but I believe that, in Latin American, the basic issue remains what I have just indicated as regards stable policies, in the sense of a continuing policy that makes it attractive to associate with our region. We have made much progress in recent years, I say this sincerely; not everyone has, but I believe that progress has occurred in many countries of Central America, the Caribbean and South America, and I am sure that, in the short term, this will produce results.

Nevertheless, we have three major problems in Latin America – I regret mentioning them here, because it is often said that this is not the purpose of these meetings – but I am among those who think that Latin American progresses with enthusiasm and strength towards democracy with three fundamental problems: one that I have already mentioned, which is the lack of internal consensus as regards the direction a country’s economy should take; the lack, at times, of civility in political confrontations, the impression that if one or the other wins there will be a great deal of difference. But, also, there are two other equally urgent problems: one of these continues to be inequality. It is difficult to think about stability if substantive progress is not made on the issues of poverty and inequality. The decade that is ending has been good as far as poverty reduction is concerned; poverty has been reduced, it has declined from 42 percent in 2002 to 35 percent in 2010. This is progress and evidently we can make further progress. Nevertheless, inequality has declined by fewer percentage points; in other words, it continues to be a problem in the region, particularly because it is not a diffuse inequality, but is concentrated in specific groups of society. Most of the indigenous peoples are poorer than the average; most Afro-Americans are poorer than the average; most single-parent homes headed by a woman are much poorer than the average. Consequently, this is an inequality with gender and with color, and this is an issue that should be of concern to us. Hence, attention to the successful efforts that some Governments are making in areas such as conditioned transfers and micro-credits is essential for this major struggle.

The third problem, the most distressing to mentioned, is public insecurity. This varies greatly from one country to another. Referring to the region in general is too simplistic and the reality is very different in the different areas of Latin America and the Caribbean. But there is no doubt that, everywhere, people are alarmed about the issue of public insecurity and, therefore, it continues to be an obstacle to our competitiveness. I believe that this occurs not only for the direct reason that increasing amounts have to be spent on public security and that people spend more on protecting themselves and less on other things, but also because it does not make our region attractive for investment and for doing business with it, owing to the fear of crime, especially organized crime. We in the OAS are trying to understand this issue of transnational organized crime, because of the risk that it infiltrate our policies and causes a serious setback as regards corruption and the affairs of State. I believe that we must hold more discussions on this problem.

Until recently, discussions on poverty were left to those who dealt with social issues and those on public security to the police authorities. I believe that, today, both are political issues for Latin America and the Caribbean. Together, we must seek ways to increase our competitiveness, making our societies more amenable and more peaceful and, consequently, more stable places to live. Because, at the end of the day, the main element sought for doing business in a country or a region is stability.

Thank you very much.