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GOVERNANCE PROBLEMS STYMIE ECONOMIC GROWTH IN LATIN AMERICA AND CARIBBEAN—OAS SECRETARY GENERAL

More than just the management of the economy, growth in the Americas is also a function of political and social stability in the countries, Organization of American States (OAS) Secretary General José Miguel Insulza said today. These factors together create an environment conducive to investment, according to the Secretary General, who underscored the need for public-private sector consensus beyond simply seeking majority—a broad-based understanding that creates social, political and economic stability in the region’s countries.

Insulza made the remarks in Buenos Aires, Argentina, during a “Responsible Americas Meeting,” organized by the Empresa Forum that brings together the region’s largest businesses. In his keynote address, Insulza shared his views on the current realities in the Americas, stressing the need to respond to three major issues related to the prospects for economic growth in Latin America and the Caribbean: how long this cycle will last; how to ensure that the dividends of growth benefit all segments of society; and what will become of the integration process.

Against this background, said Insulza, these questions highlight the challenges of security, governance and surmounting poverty. "In terms of governance, states and societies must develop capability in vital areas such as majority and minority groups recognizing the need for consensus. We must recognize this as an area of weakness for our governments, given the tendency to ignore opposition and minority voices and their needs,” he said.

Expressing a measure of optimism, Secretary General Insulza said overall development in Latin America "is positive.” He added that despite overall poverty rates, our hemisphere “is far from being the poorest in the world,” as per capita income is an average $7,964 according to the United Nations Development Programme (UNDP)—doing better than developing countries in other regions.

The OAS Secretary General, however, cited one area in which our region lags behind: comparing Latin American economic growth with China’s. He pointed to assurances of good governance in the Asian country, which project a future that many of our countries cannot. He asserted that “the basic difference between most of our countries and China and India revolves around our region’s governance deficit. We may be similar to China in terms of our strengths and threats we face in the social and economic arenas, but by virtue of its very political system and cultural tradition, China is in a better position to provide a stable future: ensuring that the society and economy will make the necessary changes to remain a relevant player on the international economic stage; ensuring that besides being clearly understood, the rules of the game will be respected. As long as our governance situation remains weak, we will not be able to offer such assurances,” Insulza explained.

The quest for political stability, he went on to note, is a matter for the state to address “although it is not a job that falls exclusively to the state: it involves the commitment of an entire society.” Urging more private sector leadership and innovation, Insulza said “the business sector can provide independent solutions to complement efforts being undertaken by the state and by organizations.”

According to Insulza, the lack of consensus and basic public-private collaboration affects how society performs. The role of both sectors, he explained, is “to solve—not create—problems that affect people.”

Reference: E-175/07