I am grateful for the opportunity you have given me by welcoming me to this prestigious Academy, for this conversation on a topic as relevant as that of charity and justice among peoples and nations. I realize that my academic and political experience is very different from that of most participants in this event, but I believe that is precisely the objective at hand. As Professor Juan Llach says in his very thorough General Introduction, the goal of the Academy in this XIII Plenary Session is “to invite many people from outside the Academy, with different roles and specialties, to actively participate in our work … in order to have a broad vision of our world.”

I will therefore try to give you a view of some issues from the point of view of Latin American reality that I’ve come to know mainly through the course of my political and academic life, and currently as Secretary General of the Organization of American States.

The situation of Latin America is naturally related to many issues of injustice, violence, and inequality that afflict the world in this era of globalization. This contradictory world, never before as full of possibilities and opportunities provided by science and technology, and at the same time politically impotent to bring such advantages the people who need them most, this also is reflected in our region. I will begin with some remarks about this global society, and later I will try to present some ideas about what international law and order can and cannot do to overcome this paradox. Finally, I will do my best to present the particular aspects of this reality in Latin America, and the great obstacles that must be overcome.

I. THE PARADOXES OF OUR ERA

The great paradoxes of the 20th Century have been identified many times: the Century that experiences an expansion in the democratic idea and in human rights is at the same time the century of the Holocaust, of genocide, and of the greatest war humanity has ever known; the century of great scientific progress is also the one with the greatest threats to the survival of the human species.

Never had humanity made so much progress so quickly in science and technology. To mankind in most parts of the world such great scientific progress has meant an increase in life expectancy, to the extent that exponential growth of the world’s population is rooted not only in a higher birthrate but above all in survival. Today the progress achieved by technology makes life easier for human beings in a way never seen before, and advancements in medicine create health conditions that can be enjoyed. Distances are shorter and communications place everyone in immediate contact no matter how far away they are from each other. The speed of change is astounding. The Internet has existed for less than fifteen years and yet we feel as though it’s been around with us always, as happened earlier with the phonograph in its various forms, electric energy, cinema or the automobile.

Important cultural progress has taken place alongside material progress: the ideas of freedom, democracy, and human rights today inspire the organization of numerous States and political action by many millions of men and women. While in previous centuries individuals recognized the guardianship of the State and its sovereignty in exchange for the security provided by it, today that social contract has been modified—not entirely, because the two are not incompatible—through a growing demand for political, civil and social citizenship, given in exchange for the recognition of legitimacy the citizens confer upon authority.

The social contract also has been modified through interdependency. The State is no longer completely sovereign, in the sense that it is no longer able on its own to provide citizens the public goods required for their survival and wellbeing. Some public goods are by nature international. All countries must necessarily participate in international life, so they may seek there a solution to issues that have otherwise no solution within the framework of their own boundaries. International cooperation on issues from trade to global warming, and from confronting crime to the need to coordinate world initiatives on matters of transportation and communications, create a new Law and new conditions for the development of individuals and States.

And nevertheless, all of the enormous progress humanity has experienced in knowledge, sciences, technology, and culture does not also hide some of its immense failures. Allow me to mention three of them that most flagrantly reflect the paradox between the great possibilities humans have created for improving their wellbeing and the inability to effectively apply them towards that end:

1.- We have not been able to eradicate, or even decrease, violence in our lives. We have known the greatest wars in universal history, we have known the Holocaust and genocide, we have been victims of hatred and fundamentalism, and crime has increased even in the most developed societies. All kinds of weapons, nuclear and conventional, long and short, legal and illegal, are stockpiled in our societies for war and crime, increasing the feeling of insecurity among the peoples of our countries.

2.- We have not been able to eliminate the extreme poverty still experienced by a large part of the world’s population. More than a third of it lives in poverty, many without receiving enough food, potable water, a sewage system, electricity, or access to health and education. The population of the poorest countries tends to increase at much higher rates than that of the developed world, without their economies growing at similar rhythms. Our growth has not reduced the gap between the rich and poor. On the contrary, it continues to grow, between individuals and countries.

3.- Finally, men have not been capable of halting the deterioration of the environment. Global warming, the pollution of air, water and land, the deterioration of infrastructure, the lack of sewage systems and potable water in cities of the developing world, frequent health epidemics, even many so-called natural catastrophes that are caused by the hand of man, are ever more quickly destroying our habitat. At the same time, and for as long as modern life requires an ever-growing consumption of fuel and other contaminant products, pollutants will accumulate without anyone assuming the costs of restoring what has been destroyed.

Never before did humanity have so much responsibility for the earth’s future and never did it have so many technological possibilities to do what must be done. The ability of knowing scientifically and being able to make predictions, however, contrasts with the inability to take action to improve reality and prevent what’s ahead.

The paradox goes even farther. Scientific knowledge allows us to imagine very clear ways of making improvements in each respect. Today we know in advance what will happen if the world continues in a certain pattern of behavior, but at the same time we seem incapable of doing through public policy or other initiatives what’s needed to avoid a catastrophic end.

A single example as illustration: the chaos and insecurity experienced today in many cities of the developing world—where the misery of some neighborhoods, the deterioration of historic centers, and the opulence of exclusive residential areas coexist in an unstable way—was predicted more than fifty years ago. Scientific institutions of the highest level, with the support of international governments and institutions of great importance, such as the World Bank and the UN, have been calling attention to the environment, and the economic and social drama of cities. But the public policies formulated in response have never been implemented. Profits and individualism have been paramount and have made cities less and less habitable, while science and technology hint at how they could improve the quality of life of their residents.

Needless to say, this situation is unjust. While there may be many millions of poor people and countries that lag far behind in the world, it isn’t because of a lack of knowledge or resources to improve their situation, but because the greatest rise in wealth is concentrated more and more in the wealthiest countries. The effects of violence, from war or crime, also disproportionately affect the poorest countries and their most vulnerable populations. Regarding the destruction of the environment, a recent United Nations report on global warming speaks for itself: while the greatest amount of resources aimed at addressing global warming is directed towards mitigating its effects in developed countries, those effects seem to disproportionately affect the developing world.

II. THE INTERNATIONAL SYSTEM AND ITS LIMITATIONS

The three failures of our era share a fundamental sign of injustice, but also a sign of impunity: none of them is effectively regulated by international law and in many cases there are no national laws that States have been able to regulate them through. The three therefore are evidence of a growing inability among those in politics, political systems, and the international system in particular.

Meanwhile, this situation of impunity is itself part of a new paradox: the absence of laws and norms for regulating the most pressing issues of our era exists in a context in which international laws and regulations proliferate as never before in the history of humanity.

In fact, contrary to what many think, International Law has enormously expanded with the process of globalization. There couldn’t be globalization without International Law. Land and maritime transport, the circulation of airplanes in other countries’ airspace—even countries sometimes considered adversaries --the norms that regulate the use of oceans and those that regulate telecommunications, are just some of the dozens of possible examples of international relations ruled through international agreements or treaties that are respected without exception.

It’s true also that this process is based on a situation of mutual convenience: all governments know that respecting agreements in this and other matters is for their own benefit. But it’s also true that there is a regular practice of international cooperation that generates the stability necessary to strengthen relations and make the situation more stable.

In sum, if these relations are characterized by universal respect, it is because they are built around common interests that are fully compatible. Something different occurs in the field of economic and power interests generated through selfishness, or when fundamentalisms deny the possibility for human understanding. These different forms of selfishness give rise to confrontations, and to the destruction or marginalization of some people by others, within States or between them.

Furthermore, the transnationalization of the economy and of information, as well as the cultural uniformity created by them, impose new tensions on the law that are not always adequately resolved. I’m talking about new situations that national laws are not able to address, due to the nature itself of the fact being addressed. Because international law does not advance at the same rate as that at which national laws become obsolete, what is left is a vacuum of uncertainty, conflict, and impunity. A clear and dramatic example of this phenomenon is the activity of organized crime, whether in relation to drug trafficking, money laundering, intellectual piracy, or human trafficking. All these crimes are of a transnational character and of a growing scale. All of them also are evidence that the movement of criminals is much greater than that of States, the sovereignty of which represents a liability that makes it harder to act with the necessary agility or readiness to build and ratify effective treaties for prosecuting crime transnationally.

Hence, despite all international laws that exist today, it is still necessary to make progress in crucial areas. To avoid having to choose between subordination and destruction, we need a world ruled by international law.

It is true there have been important advancements in the right direction, and they have been produced either through internationalization and the consistent expansion of national laws, as in the case of human rights, or through the direct creation of a new International Law in response to new phenomena such as global communications, the Internet, and others. But to be able to address all of the problems of contemporary civilization, and to end all injustices, it is necessary to have more and better laws. The issue on this point is not the ability to understand problems but the political decision to make progress on the norms and agreements that regulate and apply them. In sum, the issue is the missing notion that overcoming the injustices that still lacerate the body of humanity is not only a moral imperative but the only way for humanity to avoid being overcome by violence, misery, and the destruction of the environment.

Excuses for moving towards a civilization capable of regulating the elements that could cause its own destruction are great in number and almost all come from the dominant countries. In its most recent version, this petty tendency has sought refuge in the principle of freedom of choice and has expressed itself in the practice of unilateralism. In the developing world we know well that those concepts tend to be linked to arbitrariness and interventionism.

Globalization requires norms, and it is important to recognize the significant progress achieved in this field. For example, it is acknowledged today that human rights have are universal and must preside above the sovereignty of nations. But it is also important to recognize that in the developing world there is significant reluctance to accept supranational legislation out of fear it will be applied unilaterally. Never have unilateral violations of human rights by a great power been condemned, for example, at the United Nations Commission on Human Rights, while those committed by small nations have been condemned. What is true is they must be condemned everywhere, but it is also important that the system’s central nations, those for which the system was built in the first place, lead by example. For lack of trust will persist for as long as powerful nations continue to exclude themselves from multilateral action for the sake of protecting their own individual interests or continue to intervene in others’ affairs in defense of their own values.

Allow me to recall here an old story:

In Book V of the Peloponnesian War, Thucydides relates the negotiations that took place between the representatives of Athens, the great power, and of Milos, the small island it wished to subjugate.

The Athenians began by demanding Milos’s full surrender and submission, with all the consequences involved in being subjugated in those times. The representatives of Milos immediately replied that they did not consider themselves belligerent against Athens, and that therefore they could guarantee be permanently neutral towards the great power. In short, Athens should never see in Milos an enemy.

The Athenians answered that neutrality was not enough, that to accept it would mean, in the eyes of its enemies, a sign of weakness. Milos, as a consequence, did not have any other alternative but to surrender or die.

The historian relates that, at that moment, the ambassadors of Milos could not but worriedly exclaim: “But this is unfair.” At which point the Greeks replied with a statement that unfortunately continues to be true to this day about relations between the powerful and the weak: “Justice is reserved only for equals.”

When speaking about a global government or even global governance it is essential to break with this precept. Let’s fight for justice for all. We wish to be considered as equals. The road to achieve this, the only one, is that of international law. But that of a law that offers guarantees for everyone equally and that is respected by everyone in the same way. A regime in which not all are ruled by the same norms or in which the dominant powers act at the margin of the system they themselves created, is a system condemned to disorder and chaos.

This perspective is still very far away, and as conditions change it is possible to make progress in a realistic way, expanding international cooperation instead of seeking the road of imposition or unilateralism. Maybe this idea will appear too limited, but we must consider that, in the current environment of distrust, it is the only possibility to make inroads towards greater understanding.

There are many areas in which it is possible to make progress in the right direction. Let me name just a few:

1.- We must universalize accession to the Kyoto Protocol, as well as review and develop its contents to adapt it to the need to react in the face of disasters and the emergence of new threats that increase this risk.

2.- Assistance to the poorest countries must be substantially increased and without further delay, to avoid a human tragedy we will never stop regretting. In the same way, we must establish effective measures to facilitate developing countries’ economic growth and their integration to global trade.

3.- An efficient way to reach this last goal, as well as to promote world integration in general on the most just foundations, is the conclusion of the Doha Round in its original sense of Development Round.

4.- In this same field, the deterioration of international financial governance, which tends to produce recurrent crises, the more disastrous effects of which are almost always experienced by the weakest countries, demands a very deep reform of international financial institutions. These institutions have repeatedly failed during the last few years, showing above all a regrettable lack of objectivity and sensitivity towards the needs of the least developed countries, resulting in a loss of credibility that makes their adaptation to current realities even more important.

5.- With respect to the non-proliferation atomic weapons regime, it is important to extend regional treaties and strengthen the Non-Proliferation Treaty. There is only way to do this, and it requires the political will of the main actors involved: that the nuclear powers begin the gradual process of disarmament they committed to in the Treaty. An attitude of this sort would morally disarm those—States or movements—that seek to further the risk of nuclear weapons proliferation, and it would create the necessary moral reserve to make it impossible.

6.- A similar effort must be made with respect to conventional weapons. There has been important progress regarding the deactivation of antipersonnel mines and controlling the illegal traffic of conventional weapons. But we must push for greater disarmament and implement the rules that punish those who deal with States acting at the margin of international law.

It must be clear I am not advocating for a global government. I know well it’s not possible to go in a matter of years from a regime of unilateralism and the defense of individual interests to a sort of global republic ruled democratically. In fact, given today’s conditions a global government as seen from the perspective of the weakest would not be anything other than hegemonic domination.

Which is why I believe that though globalization may have created strong limitations for the political state system through which a great part of humanity is organized, it is not possible to replace the system with an entelechy that, lacking clear norms and agreements, could only result in the dominance of the strong against the weak.

What I advocate in effect is a regime of international justice that is capable of realistically addressing the most pressing needs of our present reality and that avoids the Athenian temptation, allowing, on the contrary, that all be equal before the Law. The origin of this regime, in my opinion, can only be found in international cooperation, that is, in the ability of nations to resolve their problems jointly within the geographic or political scope they themselves choose. This cooperation between States, in the world of globalization, can reach practically all spheres, including those that bear relation to the problems that, until now, represent the failures of our civilization: violence, poverty, and the destruction of the environment.

III. THE GREATEST PROBLEMS OF LATIN AMERICA

I have tried to offer you a vision, from the developing world, of the principal failures and challenges of our civilization in the present moment. Allow me now to show how that global reality affects Latin America and what we do in our region to face our problems.

The region of Latin America and the Caribbean belongs to the developing world, though it has a fairly better economic and social level than that of Africa or a great part of Asia, and its per capita income is near the world average. However, the failures of our civilization are also part of its reality, and this creates a feeling of injustice that is more apparent today at a time when the region is growing and its democracies advance, yet its failures continue to affect many millions of people.

1.- Poverty and inequality

More than a decade ago, then President of Brazil Fernando Henrique Cardoso remarked about his country: “Brazil is not a poor country, but an unfair country.” The phrase has been repeated many times, because not only does it synthetically reflect the Brazilian reality but also that of our entire region, making the examination of that reality interesting when we speak about charity and justice between peoples and nations.

Latin America is not, in any way, the poorest continent in the world. In truth, its average income is similar to the average income at the global level and it has natural and human resources to give all its children a better life. Nevertheless, around 100 million Latin Americans slept last night without having had enough to eat during the day. It is true that if we look at world statistics, Latin America and the Caribbean do not occupy the last places on the poverty list; that there are countries inside our continent that have better indices of human development than many African countries; that our childhood mortality is not as infamous, and our malnutrition is not as disgraceful. Nevertheless, that probably is true only because our countries are naturally much richer. And therefore, with poverty as dire as it is in our continent, there is not a single reason that justifies the presence of one hundred million indigent people and two hundred million of the poor living in a naturally rich continent.

ECLAC reports that approximately 40 percent of the population of Latin America—more than 200 million people—is poor, most of them belonging to single-family households headed by women. Among them, almost half are extremely poor or indigent, that is, they do not have enough to satisfy their basic needs with the income they are able to obtain, less than a dollar a day. In Haiti, the poorest country in our region, 55 percent of the population survives on less than a dollar a day.

That is a lot of poverty and unacceptable in a region that is rich in resources. ECLAC itself has estimated that to reach the Millennium Goals in 2015 in matters of poverty, the region should increase its per capita production, on average, to a rate of 2.9 percent annually. That means the great majority of our countries will meet this goal. Nevertheless, this estimated average hides important differences. ECLAC also estimated, in 2004, that countries with the greatest current levels of extreme poverty, above 30 percent--Haiti, Bolivia, Nicaragua, Honduras, Guatemala, Guyana—should increase their per capita production to an average annual rate of 4.4 percent during the next 11 years to reach this goal. That is, the poverty gap between our countries is expanding, leaving behind a group of countries that will not reach the required levels of poverty reduction.

Inequality between countries is accompanied by inequality between people. The poorest 20 percent of the continent takes home between 2.2 percent of national income in Bolivia and 8.8 percent in Uruguay, under circumstances in which the richest 20 percent has percentages that go from 42.8 percent in Uruguay to 64 percent in Brazil.

The Latinobarómetro 2006 survey reveals that 61 percent of people in the region have only basic education or less, have parents with the same level of education, and that only 9 of people whose parents had that level of education had access to higher education. One who is born in a poor household or from parents with little education tends to remain in similar conditions.

In our region, on the other hand, poverty and inequality are related to discrimination. A great majority of indigenous peoples are poor, as are an important number of African Americans. A disproportionate number of poor homes in the region, on the other hand, are headed by women. Poverty has color and gender in Latin America and the Caribbean. That makes the problem even more harmful and negative and the need for a solution that much greater.

And this is a situation that is not only unjust but also progressively unsustainable. The frustration caused by the contrast between poverty, inequality and exclusion, on the one hand, and truly experienced economic growth, as well as that caused by the unfulfilled promise that democratic elections would bring about improvements in the quality of life—these set the stage for a future situation of conflict and turbulence in the region. Democracy must be capable of giving much more to the people, not only because current poverty in our region is morally inadmissible, but because if it persists it will become a serious threat to our possibilities for future development, due to deficits in education, savings, and entrepreneurship it brings along with other liabilities.

Reducing inequality should also lead to substantial improvements in this matter. ECLAC itself has been emphatic in pointing out that a better distribution of income would maximize the effects of economic expansion on the reduction of poverty, estimating that a decrease of only 5 percent in the value of the Gini coefficient would create a reduction in annual growth from 2.9 percent estimated in 2004 to 2.1 percent to reach the United Nations Millennium Goals on poverty elimination.

To successfully face the challenge of poverty in Latin America, it is necessary to keep in mind that this is determined by multiple factors—such as inequality and discrimination—many of them structurally economic, social or cultural. It is no longer possible to believe, as happened decades ago in some of our countries, that poverty was a problem that was going to be solved in a natural way and as our economies grew. It is true that the solution to poverty is linked to economic growth (last year Latin America grew strongly and poverty was decreased by twelve million people), but it is equally true that the structural factors that generate poverty will have to be understood first and foremost in order to create a stable solution.

Finally, it is important to remember that poverty is linked to other processes that have repercussions on the social fabric of Latin America and the Caribbean. The excessive growth of migration from countries with greater problems of poverty and employment towards other countries in the region, towards the United States and Europe, has generated changes in the economy and society of the countries of origin and destination. The principal flows are produced towards the United States, a country that today receives more than 20 percent of total migration in the world.

Migration to the United States caused by poverty originates mainly in Mexico and Central America (the principal countries of origin for legal and illegal immigrants), as indicated in the World Bank’s reports on remittances. Many of the poorest people in countries like Peru, Paraguay, Ecuador or Bolivia go to other countries of South America or Europe. In Argentina there are more than one million Paraguayans and nearly one million Bolivians. In Spain, Ecuadorians are the second largest immigrant group, after Moroccans. Migration from other countries to the United States and Europe also involves a strong component of brain drain. More than half of Caribbean graduates with a university degree lives abroad, and in the case of some countries, as Haiti and Grenada, that number reaches more than 80 percent.

Remittances are the principal source of foreign currency in the economies of all Central American countries and in almost all of the Caribbean ones, and in the case of Mexico they compete with oil and tourism, while lowering unemployment. But migration creates social problems of a great magnitude, such as the separation of families, while migrants are victims of discrimination in many countries.

Nothing seems to indicate that the main accusations hurled at migrants have any truth in them. The rates of unemployment in the United States and Spain, for example, do not appear to significantly vary because of the presence of immigrants. On the contrary, the state that has experienced the greatest percentage increase in the number of immigrants in the United States (North Carolina) is also one of the states with the lowest unemployment rate; and statistics on crime show that immigrants do not commit more crimes than the country’s national population, in proportion to the number of residents. But the cultural and racial differences of immigrants create social problems and tensions that are sharpened by racism and the selfishness of many.

2.- Violence

Latin America has not suffered great military conflicts during the 20th Century, at least not of the magnitude of those that have taken place in other continents. A few months ago we celebrated the 40th Anniversary of our Treaty for the Prohibition of Nuclear Weapons (Treaty of Tlatelolco), which all of our countries have observed. With the end of internal confrontations provoked or inspired by the Cold War, it is possible to say that in general, with the sole regrettable exception of Colombia (where violence nevertheless has seen a reduction in the last two years), Latin America is today a continent of peace.

But our rates of criminality are among the highest in the world. Ours is a continent that faces serious problems of crime, organized and non-organized, with which it is not possible to continue to live. It is true that political violence, not long ago a scourge, has decreased; that we have much less political violence than other regions of the world, within States and between States. But it is also true that such violence has been substituted by crime: by gangs, drug trafficking, the growth of urban crime, money laundering, and the many other forms it adopts today. Various countries of Latin America and the Caribbean are on the list of those that have the highest averages of homicides in the world, with rates that can reach up to 30 homicides for every one hundred thousand residents. With some 8 percent of the world’s population, the region accounts for 75 percent of kidnappings that take place globally. In some cities of Central America and South America groups of criminals already control not only crime but every aspect of life in some neighborhoods.

The largest aspect of crime and violence in our region is linked to drug trafficking and organized crime, the growth of which has been driven by a combination of high density in urban areas, persistent poverty and income inequality. The explosion of violence that occurred in Sao Paulo in May 2006 was the first massive expression of the adverse effects of a combination of poverty, drugs and violence. In that city, one of the largest gangs in the world organized an attack on urban infrastructure that lasted five days, with 272 people killed, 91 of them police officers. In some countries of Central America, organized gangs of young people are more numerous than police, and in this region as in the Caribbean they have become ground traffic for drugs and provide refuge to criminal organizations.

We’re talking about a social scourge that not only degrades and physically and morally harms people, but brings with it a high economic cost. The Inter-American Development Bank estimates that the cost of delinquency, including the value of stolen property, rises approximately to 16.8 billion dollars, equivalent to 15 percent of the GDP of Latin America. This estimate includes the impact of crime not only on the safety of people and property but also on productivity, investment, employment and consumption.

One of the most serious crimes, one that has been less recognized until now, is human trafficking. The number of children, women and slaves that are trafficked in our region, within countries or across borders, is shamefully high, infamously high. It is so high because an equally large percentage of the population—between fifteen and twenty percent—lacks identity. They are not registered, nor do they have any documents to identify them. To them there is no piece of paper bearing their name or recording their existence and they are, because of it, easy prey and the permanent object of all kinds of crimes perpetrated by organized criminal organizations.

3.- Environmental degradation

Latin America and the Caribbean face very high rates of environmental degradation, in quick ascent. A key element of this degradation is the growth of the population, alongside some of the highest rates of inequality. Evidence shows that the poor face the greatest burden of environmental degradation.

The problems of the urban environment, especially air and water pollution as well as inadequate sewerage systems, continue to have strong impacts on millions of people who live in our cities. A recent report by the World Health Organization confirms that environmental degradation is a growing cause of illness. About a fourth of illnesses at the global level is caused by exposure to a contaminated environment, while the number rises by a third for children under five years of age.

The region has been blessed with one of the richest endowments of natural resources and biological diversity on the planet, and it has become a model in the support of protected natural areas. Nevertheless, despite political commitment for protected areas, the loss of native forests—home to the highest concentration of biodiversity—continues to gain speed. According to a recent report by FAO, in 2005 almost 40 million acres were cleared in Latin America, which represents the highest rate of forest loss anywhere on the planet.

There are other forms of degradation of natural resources, such as for example 30 percent of coral reefs—which harbor the greatest concentration of marine biodiversity—that are severely damaged and at risk of collapsing. The growing frequency and intensity of natural disasters, and the recognition of the link that exists between these extreme climactic events, pose enormous risks to the region, especially the countries of the Caribbean and Central America.

This uncontrolled environmental degradation can end up affecting the strength of democratic institutions. It is difficult to sustain a democracy when 140 million people lack adequate access to health services, when 75 million people lack clean potable water or when 80 million people breathe more pollutants than is considered acceptable by the World Health Organization.

The great majority of those affected by unclean air and water are also the poorest communities in the region, harmed by decades of injustice and exclusion. They are also the most exposed to violence and crime. This entire sector of society forms an explosive mix of misery, inequity, and despair that explains many past and recent political phenomena in Latin America. These forms of injustice and the incapacity to solve them are at the origin of a lack of faith in democracy and the rise of “caudillismos” as magical formulas for solving injustices that cannot wait any longer.

IV. GROWTH AND CHALLENGES

Despite it all, the current situation in Latin America and the Caribbean presents a group of favorable elements that allow us to think that, if continued and developed, it will be possible to reverse the negative aspects and give the region new impetus towards greater justice and development. These favorable tendencies still depend on external factors, such as the current situation of the global economy. But they also require an internal effort that is mainly political, and involves the expansion of democracy and human rights as well as the development of external governance.

According to estimates by the Economic Commission for Latin America and the Caribbean of the United Nations (ECLAC) , the regional Gross Domestic Product grew some 5.3 percent during 2006, which represents a rise of 3.8 percent per resident. That is the fourth consecutive annual rise and the third above 4 percent, which at the same time contrasts very favorably with the average annual growth of 2.2 percent experienced between 1980 and 2002. A slight deceleration is expected for 2007 that would take the regional GDP to a growth of around 4.7 percent, but even under this circumstance the 2003-2007 period will have ended with an accumulated increase close to 15 percent.

According again to ECLAC, the region further experienced a rise of 8.4 percent in the volume of its exports during the last year, in addition to an improvement in the prices of the principal products of exportation that was translated into a rise of more than 7 percent in the terms of exchange with respect to the previous year. In the same way the majority of countries registered a decrease in inflation, which decreased some 6.1 percent (weighted average) in 2005 to some 4.8 percent in 2006.

This positive economic performance has partially made its effects felt in other areas and particularly in one of great regional sensibility: poverty. In effect, according to ECLAC figures, based on direct surveys of households in 18 countries of Latin America plus Haiti, during the last year the number of poor people decreased from 209 million to 205, which would represent a decline from 39.8 of the population in 2005 to 38.5 in 2006. The number of indigent people decreased by two million (from 81 to 79), which represents a variation from 15.4 to 14.7 percent. The importance of progress in this field becomes even more relevant if the 2006 figures are compared to those from 2002, a year in which poor people numbered 221 million and indigents 97, which means that in that period the number of poor people was reduced by 16 million and that of indigent people by 18 million. The last four years, as a consequence, also have been those with the best regional social performance of the last twenty-five years.

An improvement in the economic situation has been accompanied by greater political stability and a strengthening of the democratic system. In recent times there have not been situations of crisis and, on the contrary, most countries in the region have renewed their governments through legitimate elections, with good participation and results accepted by all.

Just in the period between December 2005 and December 2006 thirteen presidential elections were conducted, making it the year in which more presidential elections have been held in all the history of Latin America and the Caribbean. If furthermore you take into account that in the region only twenty-one countries have a presidential regime, this means that the majority had elections in a single year; and all of them—even those with results so close they created certain tensions or difficulties when they were announced—were marked by democratic normalcy. During that year, also, twelve legislative elections were conducted, as well as two referendums and one Constituent Assembly election.

To perceive the true significance of this democratic situation, it is necessary to compare it with what was happening in the region a few decades back, when among those twenty-one countries there were not thirteen that had a democracy, and elections were less clean and competitive than now, when the opposition can win and the government is willing to pass on leadership to its adversaries.

Meanwhile, the recovery of the principles and practice of democracy has had effects on the perception of Latin Americans towards it. Thus, the annual regional survey known as the Latinobarómetro report shows, in its 2006 version published last December 9, that the percentage of the population of Latin America that believes that “democracy can have problems, but it is the best system of government,” rose to 74 percent on average in 2006, which contrasts with what was happening five years before, in 2002, when only 68 percent of the population thought in those terms. And it contrasts much more vigorously still with the answer given to another survey conducted by Latinobarómetro, this time in 2004, that showed that that year, on average, Latin Americans believed in some 55 percent of cases that they would not mind putting up with a non-democratic government if it would solve the economic problems of their country.

All of this calls for optimism, more so if you consider that during the previous fifteen years there were sixteen governments that did not finish their terms. But this optimism must be accompanied by extreme caution, because it is important to recognize that there are still a series of important uncertainties in the region. I have grouped them around four big themes.

1.- The challenge of growth

Growth is at the root of all other possibilities for improvement. Something important to keep in mind in our region, which has grown at a slower pace than any other region in the world in the last twenty-five years. The emerging economies of Asia, the Middle East, Central and Eastern Europe, as well as the “recently industrialized countries” of Asia, continue to outdo us in this field and also the developed world. By contrast to growth in other regions, there are countries in Latin America that have not grown at all and still others, such as Haiti, that have even steadily reduced their per capita income in the last twenty or thirty years.

Why this weakness? In my opinion there are at least seven reasons that explain the fragility of our growth. In the first place the persistence of weak financial sectors that prevent our countries from benefitting from more lucrative investment opportunities. In second place the absence of a well defined regional energy system that eliminates insecurities on the supply of energy in the majority of our countries. Third, a very insufficient level of intra-regional trade, recently aggravated by tendencies to elevate protectionism. Fourth, the low levels of savings and investment characteristic of the overwhelming majority of our countries. Fifth, the absence of efficient tax systems that allow countries of Latin America and the Caribbean to raise their actual relatively low levels of collection. Sixth, the low quality of public spending in our countries. Seventh, the still lower regional competitiveness, evidenced in the Global Competitiveness Report of 2006, in which the only countries of the region situated among the first fifty (out of 117) are Chile (27) and Barbados (31).

Overcoming some of these inadequacies at least to some extent will be a determining factor for knowing if it is possible to maintain such growth for a prolonged period, or if such growth is due only to external circumstances and, as a consequence, will vanish as soon as the international economic cycle changes.

We are aware, on the other hand, that overcoming these inadequacies will allow us to grow at a faster pace. It will not guarantee that further growth will benefit the most needy among our region’s residents and that, on the contrary, it will simply contribute to raise already existing inequalities. It is important to remember in this regard that it is not the first time that democracy and growth coincide in our continent; that at the start of the nineties we had a similar situation—with a democracy that was then being reborn among us—and that at that time the hopes of millions of Latin Americans and Caribbean people were frustrated.

And the current tendency in this regard cannot be otherwise but disturbing. For example, studies by ECLAC on the fulfillment of the Millennium Goals show us that the poorest countries in our hemisphere are those that lag behind in the fulfillment of these goals, and that therefore it is highly probable that in the future the gap between them and the richest countries will become greater. It is possible to note, on the other hand, that even in those countries with greater growth there has not been substantial improvement in the distribution of income or a significant reduction in poverty, not precluding that poverty effectively has dropped in the last year in a noticeable way throughout the region.

I am also aware that what doesn’t help in pursuing the goal of growth is the climate of uncertainty that, regarding economic and public policies, is created many times in our countries. Contrary to what many believe, capital—that is, the investment resources necessary for growth—is not attracted exclusively by the prospective of profits, which certainly has to exist, but also by political stability, security and the confidence in the rules of the game. If those who can invest in our region through long-term ventures feel that their investment can be threatened by changes in the rules of the game or by corruption or crime, certainly they will not invest, which means that we will fail to take advantage of those resources. On the contrary, the only resources we can aspire to receive under those conditions will be those that are short-term or speculative, and most of the time they do not leave any benefits for our countries.

Many of the countries mentioned in recent studies as protagonists of the society of the future currently enjoy less democracy and show worse rates that ours in areas as important as poverty and literacy. A good part of the countries that are seen as the basis of the industry of the future today have hundreds of millions of poor people, and in countries that currently are holders of the global software industry, half of their population is illiterate. A country considered one of the great economic “miracles” of our times today has levels of malnutrition equivalent to those of Sub-Saharan Africa. Nevertheless, they are stable systems that exercise clear rules of the game and that are willing to play by the rules of globalization. Those are the characteristics that guarantee their roles as protagonists of the future.

In our case, unfortunately, that is not the image we offer. We experience the reality of stable economies, but along with the perception that in many cases because of a lack of consensus regarding its instruments such stability is not generalized. That is why it is noteworthy that upon analyzing the forecasts previous to the last presidential elections held in the region a common denominator is the affirmation that whatever their outcome the economic policy of the country would not have been modified. And we’re talking about elections in countries as important to the regional economy as Brazil and Mexico. That is the security that our countries must offer if they wish to capture the resources they need to develop their infrastructure or energy; if they seek to attract long-term investments they need to ensure stable growth. The security that our economies are stable because our basic policies also are.

2.- The limits of integration

The process of regional and sub-regional integration presents a very diverse panorama in different parts of the hemisphere. CARICOM, for example, today faces a discussion about transitioning from a single market to a common economy, and in Central America each day there is further progress on matters of integration in a broad sense that includes, besides economic issues, migration and other issues. NAFTA, for its part, is today a reality that nobody can deny, and in the recent elections in Canada and Mexico there was not a single voice that clamored for taking steps back on this field; rather, what could be heard were proposals to perfect the system.

Thus, the problem and the challenge, in this case, are especially South America’s, where it is possible to identify a negative tendency in recent years, a certain decay of the real policies of integration.

What is true is that Latin America has varied cyclically between a pessimistic comparison with Europe to euphoric declarations relative to the imminence of an integration “here and now,” without visualizing an effective willingness to take the lessons that derive from the European experience or really make progress on an integration process. All of this is even more regrettable if you consider that this hemisphere, and especially the South of the hemisphere, began to talk of integration long before Europe, to later end up tremendously behind this one. A phenomenon the sole explanation of which seems to be that, unlike Europe, South America has always opted to stop the process before any stumbling block—big or small—found along the road, and these stops in not few opportunities have caused dramatic regressions.

By contrast, if we observe the European Union we may notice that it involves a process of integration that has never been stopped. It has been criticized, and harshly, in many countries of the Union; it has had highs and lows; it has gone through enormous problems, but it has always moved forward. Our history, on the contrary, as I have pointed out, is a history of progress and setbacks the sole reasonable explanation of which is that unlike Europe we have tended to avoid the true problems that an integration process brings with itself.

The first problem and perhaps the principal one is, whether we like it or not, that of reticence to “supranationhood,” or in other words resistance to yield sovereignty to achieve integration. And if all successful experiences in this field reveal something it is that there cannot be real integration without an equally real transfer of sovereignty.

All issues related to trade are the legal authority of the European Union and not of its member states. Do we have something similar in Latin America? Of course we don’t, and we don’t even dream about having it. In a region in which we don’t even have mechanisms for solving controversies, there is a much lesser disposition—especially in the South—of submitting to some supranational entity any powers in matters economic or trade.

The second great problem is that it is apparently believed that, because economic integration is a situation in which everyone is to gain, nobody will have to pay for it. This is without a doubt an error, since there wouldn’t have been European integration without some countries providing the money needed to finance it. What’s more: there wouldn’t have been European integration if since the fifties and until today some countries had not been willing to pay enormous sums of money to finance the costs that integration had for the agriculture of other countries. And just as they financed that effort in agriculture, the same countries financed a broad group of other European common budget matters, always taking into consideration that this current expense was going to yield enormous future benefits.

Despite the distances involved, there isn’t much of a difference between this situation and that of South America today. Also among us there are small and large countries, and countries that have more resources than others. And if there isn’t any willingness to replicate in some form those “Differentiated Agreements” in which not everyone contributes or benefits in the same proportion, we are not going to get very far in matters of effective integration.

The third problem bears a relationship to a sort of maximizing obsession regarding integration. The obstinacy with which the proposal is made, from the beginning, that this must go “from Rio Grande to Tierra del Fuego.” The truth is that, in Europe, an agreement that would have gone from the Baltics to the Greek Islands would never have prospered: European immigration is what it is because it has developed gradually. And it is precisely because of this that, among us and despite its difficulties, sub-regional agreements are so promissory: MERCOSUR or the Andean Community are more real and generate more hope than the illusion of unifying, once and for all, the whole of the continent. Waiting for the conditions to reach that integration “once and for all,” one can only end up like a fleet that advances at the speed of the slowest boat; a situation that only serves to make the whole continent lag behind. On the contrary, it is my firm conviction that those countries willing to make faster progress must become integrated among them as quickly as possible. And one must remain aware that to advance quickly, we’ll have to inevitably face even more complex issues, such as that of integration of economic policies, because certainly it is very difficult, if not impossible, to achieve integration between countries that do not have similar policies. In sum, in order to achieve integration countries must have something or a lot in common; it’s a factor also evident in European integration: that integration takes place between countries that are in tune with each other before becoming integrated.

3.- The challenge of democracy

None of the situations that could be described as effectively critical in Latin America in recent years was caused by revolutions or military coups or were rooted in ideology, but they were originated at times of popular discontent that ended up expressing itself in a collective way. Such discontent is pretty extended among common people who observe with growing impatience the inefficiency and sometimes also the corruption of their governments, despite their having been elected democratically and governing with strict observance of the Constitution and the laws.

Politics is not just a matter of ideas or values but also, and this is much more important, of results that are beneficial to the people. And it is in this that some of our governments and some of our political elites have failed, because to have good government it is enough to feel and behave as a democrat: the true challenge is to maintain democratic stability while at the same time providing citizens with all those benefits and solutions to their problems that democracy itself promises them. That is what I understand by governance: an issue that concerns efficacy and the efficiency of governments and that, as I have just said, in my judgment it provides the necessary conditions so that later all remaining challenges may be overcome.

The first is to be aware that the broadening of democracy and its institutions is precisely the first obligation of a democratic government. Participation and consensus are an indispensable requirement for them. On the contrary, exclusion and sometimes repression of one’s adversaries are a sure way towards the weakening of the democratic institutions. This obligation is not always taken into account by our rulers who, with some frequency and without regard for their previous democratic record, as soon as they have the support of the majority fall into the temptation of seeking ways of expanding their powers or prolonging their terms beyond their original limits. In acting this way, these governments, though they have been elected democratically, do not govern in a democratic way since they do not meet with the first duty of a democratically elected government: to exercise power in the same democratic way, expanding freedom through inclusion, transparency and participation.

I must note that this is a phenomenon that affects only our region since, as Fareed Zakaria has pointed out, there are many cases throughout history of governments that have been elected by a clear majority and later, almost always with the complacent support of the same majority, have suppressed freedom of expression, limited freedom of the press and in general of dissent, have promoted or tolerated discrimination and have violated human rights. These are governments that have been democratically elected but that have not governed in a democratic way. The issue, by the way, has opened a theoretical discussion—in which Zakaria himself has participated—among those who hold that it is enough for a government to be constituted democratically for its legitimacy to be guaranteed, and those who assert that in order to become democratically legitimate governments must also democratically apply the power that has been invested in them.

The Organization of American States has a position that has been solidly consolidated on this point, expressed in its Fundamental Charter and reaffirmed in the Inter-American Democratic Charter approved by the foreign ministers of the Americas in September 2001. In this last document it is said: “Essential elements of representative democracy include, inter alia, respect for human rights and fundamental freedoms, access to and the exercise of power in accordance with the rule of law, the holding of periodic, free, and fair elections based on secret balloting and universal suffrage as an expression of the sovereignty of the people, the pluralistic system of political parties and organizations, and the separation of powers and independence of the branches of government.” And it adds: “Transparency in government activities, probity, responsible public administration on the part of governments, respect for social rights, and freedom of expression and of the press are essential components of the exercise of democracy.”

The full implementation of this Democratic charter is essential for the creation of an environment of stable democracy in the region. It is a way of guaranteeing everyone, citizens first and foremost and the international community second, that these countries not only hold democratic elections but that they also are capable of maintaining stable institutions, in which policies, laws and forms of government do not change.

Within these institutions, the clear separation of public powers and especially the independence of the Judicial Power and the organizations of public control are indispensable. Lack of access to justice is one of the principal frustrations of the citizens of Latin America. Also of concern is the tendency to use the judiciary for political ends, whether by the governments to strengthen their own power or by its adversaries to make undue attacks.

On the other hand the systems through which the authorities are elected tend not to take into account the need for stable majorities and, on the contrary, create unstable conditions that are maintained only while governments are successful. The weakness of parties and other intermediate organizations tend to accentuate the problem. Since parties are not representative and in general do not have great internal discipline, the majorities change frequently and it isn’t possible to form stable political coalitions. The weakness of the system turns the fight for power into the sole constant element, leaving little space for compromise and for long-term decision making.

That is why a condition of governance in our region is the generation of political systems that allow for broad participation and facilitate the formation of solid coalitions and majority-ruled governments. This in itself demands greater popular representation from political parties and the capacity to participate in the formation of these majorities.

4.- The challenge of governance

Latin America and the Caribbean today have democratic elections through a secret and universal ballot process open to all citizens. Now, much more progress must be made towards the creation of institutionally stable democracies, endowed with an effective balance of power, internal control and the full exercise of political, civil and social citizenship.

Governments must govern democratically, but also must be capable of really governing. In other words, to be effective in their duties, a democratically elected government must have the power and the conditions to rule in an effective way. This bears a relationship to the rule of law and also to the strengthening of political institutions and systems of representation and, particularly, to the existence of permanent public institutions that are truly respected. Growth, job creation, guarantees for capital investment, integration, the problems of poverty, discrimination and crime, all are questions that can be solved through democracy and the application of effective and efficient public policies, taking into account the opinion, participation, and rights of all. To live up to that enterprise, nevertheless, the governments of Latin America must still satisfy some requirements and develop some capabilities that are necessary for governance.

This is a tough problem to overcome in Latin America and the Caribbean, since many countries of the region are not in a position to apply basic laws or institutions formally capable of implementing public policies. Many times these institutions are inefficient, too “politicized,” or simply are not respected. An independent judicial power, a Comptroller General with sufficient powers, a fair and transparent tax system, and an efficient and non-corrupt police force are some of the institutions that, in our democracies, tend to exist on paper but not in reality.

A second requirement of governance is today, more than ever, transparency and probity in the exercise of public office. Only a few countries in our region are free from a history of poor government and taking advantage of public office for personal benefit. I must declare that I believe that on this matter there has been much progress in recent years and that has not been foreign to the implementation of the Inter-American Convention against Corruption, the follow-up to which corresponds to the OAS. But it is also a fact that there remain grave pockets of corruption that, unless corrected in a timely manner, run the risk of extending to entire institutions in various countries.

The problem of corruption is also one of image; once the population has gained the conviction that its authorities are corrupt, it takes much time to convince it that those practices have been overcome. Public opinion tends to see more corruption than there is, and the reason for it many times is lack of transparency and accountability in government activity. That is why we talk simultaneously of probity and transparency. Authorities must always be submitted to public scrutiny and be capable of giving public account of all their activities through serious, technically efficient mechanisms that are free from the daily political fight.

A third requirement of governance is that, to be successful in their aims, governments must be equipped with the necessary instruments. Something that also doesn’t occur satisfactorily in a good part of the governments of the region, which saw significant decreases in the institutional or material means with which they had been able to face many of the problems that needed to be solved as part of their essential mandates. The phenomenon is explained by the reduction, in many cases exaggerated, of the size of the State.

One of the effects of the reforms carried out in the nineties in many countries of the developing world was the disappearance of the enormous state apparatus, which constituted a positive change whenever those state structures were in charge of costly productive activities that were inefficient or could be better managed by the private sector. Nevertheless, under the imported motto that the State was part of the problem and not the solution, a new notion, that of “small government,” substituted the notion of the small State and ended up becoming a question of principle. On this basis, public services were taken down and impoverished, thus contributing to raise the number of the poor and indigent and reducing the quality of services the State owes its citizens, and that they hope and demand.

The disappearance of these government activities, without being substituted by anything that would cover the needs they addressed, have generated a feeling of great insecurity in people, to the extent that for a decade now many surveys have shown that a very significant part of the population lives with high levels of uncertainty. According to the Latinobarómetro survey I have cited previously, more than two thirds of Latin Americans are worried about the possibility of losing their jobs in the next twelve months. The same uncertainty is experienced in relation to the possibility of having access to health care and, what is worse, many have the feeling that while their children may some day be able to have access to such benefits, they never will.

Today it is clear that the State is part of the solution and that many of the challenges we face, especially reducing inequality, providing better services in education, healthcare, potable water and employment opportunities, depend on the formulation of public policies that are destined to expand and strengthen social cohesion. They also depend on the presence, in the State apparatus, of public officials endowed with professional competence to fulfill their tasks. Besides the political representation carried out by popularly elected leaders, there must be a civil service by the State capable of maintaining continuity and efficiency in public duties. To turn the public administration into a simple prize for the winners of the elections is a vice that also is practiced in the developed world, but that must be eradicated to reach the levels of efficiency that our governance requires.

One of the myths linked to “small government” is that it reduces the possibilities for corruption; and I say myth because that has not been the experience of many countries of the hemisphere during recent years. On the one hand because neither the States nor the governments—large or small—are the only source or space for corruption: the private sector also is a source, space and victim of corruption, as has been shown by many corporative scandals in recent years in our continent and abroad. On the other hand it must be said that while the State may have reduced its importance as direct producer of goods and services, it has increased its capacity to make concessions and assign resources to the private sector, activities in which undue associations can be established between money and politics.

What is true is that, in matters of corruption, the size of the States and governments is not relevant. What is relevant, on the other hand, is the existence of laws and norms that provide an adequate answer to the need to separate money from politics; that regulate lobbying; that limit and make transparent the financing of political campaigns; that make it obligatory to declare income, property and interests by public officials, and that also create transparency in the systems of acquisition of goods and services by governments. Without elements of this type, operating in a permanent way and accompanied by an efficient system of comptrollership of public activities, there will always be the possibility for government officials—large or small—to be the object of pressures and influence by money.

I want to conclude this very long presentation with a note of optimism regarding the future of Latin America and the Caribbean, the situation of which I have sometimes presented in harsh lights. Only a few decades ago we left situations of extreme repression and conflict. Today we face the tremendous challenges of strengthening our democracy, ensuring growth, reducing poverty and inequality, protecting our environment, and improving our security. They are pending challenges, in greater or lesser measure, in the entire world. I sincerely believe that our region has the means to overcome them before others, as long as its leaders are capable of creating the necessary consensus for it, and as long as the international community imposes on itself an effective logic of international cooperation.

Thank you very much