POLITICS: U.S. Pushes ‘Entrepreneurial Spirit’ for Latin America

By Emad Mekay Reprint | | Print |

Emad Mekay

WASHINGTON, Jan 12 2004 (IPS) - The United States says it will urge leaders from 34 Americas nations meeting this week to continue to democratise their societies, open up their economies, introduce property rights, commit to free trade and assist businesses to operate in their countries.

But watchdog groups say such an agenda will have only a minor effect on the extreme poverty throughout the region.

The special two-day Summit of the Americas kicks off Monday in Monterrey, Mexico with U.S. President George W. Bush expected to be the dominant figure at the meeting.

According to U.S. officials who spoke here prior to the summit, Bush will push for democratic, "market-based" development and close cooperation among nations of the Americas on matters of terrorism and security.

The meeting is being staged mid-way between the Quebec Summit of April 2001 and a projected meeting in Argentina in 2005.

The nations agreed to an interim summit because of economic and political changes in the world, said Ambassador John Maisto, U.S. permanent representative to the Organisation of American States (OAS) and the U.S. coordinator for the special summit.

"There have been political and economic challenges in the region since the Quebec Summit, as well as a new global dynamic created by the events – the tragic events – of Sep. 11, 2001, which led to this decision," Maisto said.

At Quebec, leaders adopted a much-touted "democracy clause", the basis of the Inter-American Democratic Charter approved unanimously by the hemisphere’s foreign ministers, also on Sep. 11, 2001, which commits governments to actively defend democracy in the region.

U.S. officials say three items will dominate this year’s summit agenda: economic growth, social development or "investing in people"; and democratic governance.

But groups that monitor the summit say the much celebrated democracy clause has not translated into concrete benefits for ordinary people, and warn that U.S.-style economic reforms, similar to those on this week’s agenda, have failed to cut poverty or lessen the gap between rich and poor.

According to Joy Olson, executive director of the non-governmental Washington Office on Latin America (WOLA), the Americas leaders should ask themselves: "what benefit is democracy bringing to the region’s poor"?

"The region’s leaders must demonstrate that they understand that Latin America’s poor have not benefited economically, despite the consolidation of democracy in the region, and say what they plan to do about it," she added.

The election of democratic governments throughout the region was a major accomplishment of the 1990s, overcoming decades of authoritarian rule.

But according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), 220 million Latin Americans still live in poverty, 95 million of them in extreme poverty, despite these democratic gains.

"Leaders from the region and the United States need to wake up and smell the coffee," Olson said. "The lack of economic progress and the corruption prevalent in some Latin American countries are undermining democratic stability and reforms."

But WOLA and many other civil society groups are likely to be disappointed at the U.S. emphasis in Monterrey on issues the groups believe benefit the United States and its corporations.

According to Maisto, the summit will discuss securing property rights for all; lowering the cost of workers’ remittances and reducing regulations on businesses that operate in Latin America.

On the issue of property rights, the United States will seek policies that would recognise property as collateral, which in turn could allow individuals to obtain credit and start a business.

"The best leg up out of poverty is property," said Ambassador Roger F. Noriega, U.S. assistant secretary of state for western hemisphere affairs, in remarks to the Council of the Americas last week.

"Reforming laws and regulations so that registered property can serve as collateral is an essential and urgent task. In Monterrey, we will encourage all of our neighbours to commit to making these necessary reforms by a certain date so that our people can put their property to work for them."

Washington also says it would like to see lower costs for remittances, which would mean more of them moving across the borders. As the Inter-American Development Bank (IDB) reported recently, some 32 billion dollars a year flows into Latin America in the form of remittances from citizens who work abroad.

Washington says the system of sending that money is inefficient and uncompetitive. For example, senders pay high fees, on average 12.5 percent of the remittance.

The United States also wants to discuss free trade. Every Americas summit since the first meeting in Miami in 1994, has espoused the objective of a hemisphere-wide free trade area.

"The two big achievements of the Quebec summit that people remember, in addition to the action plan that is being worked on, are: one, the democratic charter … and two, the commitment to conclude a Free Trade Area of the Americas (FTAA) by January 2005," said Maisto.

Noriega said trade represents "the best opportunity for the countries in this hemisphere to attract the capital that they need to create jobs and sustain a level of economic growth that will support necessary public investments in education, health and infrastructure".

The U.S. administration already has a packed free trade agenda until 2005, including deals with Singapore, Chile, the Southern Africa Customs Union, Australia and Morocco, as well as renewal of the African Growth and Opportunity Act, the Enterprise for ASEAN Initiative and conclusion of the FTAA.

Washington’s existing free trade partners are Canada and Mexico (within the North America Free Trade Agreement, NAFTA); Israel and Jordan.

Washington reached a free trade agreement with four Central American countries in December.

U.S. officials routinely quote a World Bank study that says it takes longer to start a business in Latin America than in sub-Saharan Africa. In Brazil, it takes an average of three months; in the United States, about three days.

"At the Special Summit of the Americas, we hope presidents will commit to concrete measures to unleash this entrepreneurial spirit," Noriega said.