DEVELOPMENT-LATAM: Educate and Export to Grow, Advises IDB

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Dec 3 1999 (IPS) - Latin America should put top priority on education and exports, to ensure economic growth and combat inequity, stressed a seminar held in Brazil to mark the 40th anniversary of the Inter-American Development Bank (IDB).

Reforms promoted in the region since the 1980s have led to “conquests and positive attitudes,” such as stability, fiscal discipline, the opening of markets, the downsizing of the State and a rise in productivity in certain areas, IDB President Enrique Iglesias said at the seminar in Rio de Janeiro.

But there are still problems pending, such as “mediocre and volatile growth,” and external and social vulnerability, he pointed out.

Low levels of internal savings and exports must be overcome, and the State must be made more efficient, especially in education and training, he advised.

Poverty and inequalities constitute another big challenge in the region, he added, one which requires economic growth of at least six percent, double the current level.

Only a constant 10 percent rise in exports would allow the Latin American regional economy to grow by five or six percent a year, said Albert Fishlow, a US economist invited to the seminar.

A strong commitment to education by governments in the region and redistribution of income are also necessary to sustain development, he added.

Education is indispensable to the incorporation of technological advances, especially today in the “Internet age”, said Fishlow, who warned however that results would only be seen after 15 or 20 years of efforts, thus making a long-term commitment necessary.

Iglesias attributed Latin America’s economic problems, like those which led to the so-called “lost decade” of the 1980s, to “excessive tolerance” of instability, inefficiency and inequity.

Fiscal deficits and social spending directed toward the middle and upper socioeconomic levels rather than the poor characterised the region for several decades, whether under civilian or military governments, he added.

The dreams of the 1960s did not materialise, and in 30 years, Latin America’s competitiveness has waned, especially with respect to southeast Asia, which also outstripped this region in education, Fishlow pointed out.

Both both Iglesias and Fishlow underlined the region’s capacity to respond to international financial turmoil.

The drop in Brazil’s Gross Domestic Product (GDP) will not be as serious this year as was first projected when the local currency, the real, crashed in January, and Mexico has gotten back on its feet after its late 1994-95 crisis, said Iglesias.

Latin America experienced a period of “exceptional” difficulties in the past five years, since Mexico’s meltdown, which was followed by the Asian and Russian crises, and lastly by the devaluation in Brazil, Fishlow stressed.

José Antonio Ocampo, executive secretary of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), also emphasised the need to improve education and adopt policies aimed at generating employment, in order to bolster development in the region.

The allotment of more resources to university than to primary education has contributed to the social inequities, as well as social policies which generally have been “selective,” rather than universal and based on solidarity, said Ocampo.

We must build “institutions and social fabrics for a more integrated society,” recommended the ECLAC official, after pointing out that “weariness” and loss of hope in improvements in the long-term could jeopardise governability in the region.