FINANCE-LATIN AMERICA: SELA Seeks Exit From “Bermuda Triangle”

By Humberto Márquez Reprint | | Print |

Humberto Marquez

CARACAS, Jul 5 1995 (IPS) - The Latin American Economic System (SELA), meeting in San Salvador from Jul. 10 to 13, will seek a way to escape the influence of the powerful alliance between the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO).

SELA Permanent Secretary Salvador Arriola said that these entities “form a new Bermuda triangle, a triangle so powerful that if we try to get accross it without a compass, radar and map, we will be lost.”

The three multilateral bodies “have received instructions from the Group of Seven most industrialised countries (G-7)…to cooperate with each other,” said SELA Public Relations Director Marcela Rangel.

Reeling from the Mexican crisis and the collapse of the British Barings Bank, G-7 countries supported rigorous surveillance programmes for economically unstable countries at their recent summit in Halifax. They created a new financial emergency mechanism and arrangements to organise payments to the creditors.

They also called for greater efficiency in the administration of the multilateral development banks and the economic and social bodies of the United Nations (UN). G-7 nations also want to apply pressure for opening new markets for services, investments, telecommunications and origin norms.

Rangel said that the Latin American Council “must look carefully at how it should react to the G-7 aims, to prevent the World Bank-IMF-WTO triad from becoming a triangle of perdition, maybe proposing that the UN become a fourth leg on the table so that international economic leadership be transparent and democratic.”

Arriola aded: “The paradox which needs resolving is that faced with increasing economic globalisation at the beginning of the twenty-first century, the region is lacking consultancy and cooperation mechanisms for those responsible in the economic, financial, social and technological sectors.”

While the foreign ministers have several consultancy fora and mechanisms, “other agents, like other ministers, entrepreneurs, workers and the public rarely have the opportunity to swap experiences and benefit from cooperation and consultation initiatives”, he added.

The SELA meeting will therefore also be a chance for restructuring the body. There is a proposal to split it into five regional cooperation and coordination areas. These would cover economic policies, social policies, trade, development funding and technological innovation and the productive sectors.

Each will offer a chance for debate. Regional proposals will aim to examine each issue on four levels: the international, hemispheric, regional and national.

SELA maintains that each of these levels is affected by globalisation. Changes in all sectors – technology, politics and finance – are happening ever faster and are calling for rapid reactions.

The situation is further complicated by the appearance of new agents and processes which mean that the state is not the only decision-making entity, as the multilateral finance institutions, investors, non governmental organisations and the media increase their power.

Also, government agendas have become more global with issues appearing ever more interconnected and interdisciplinary.

“We’ve only just begun to understand the link between debt and trade, biotechnology and intellectual property, environment and exports, when the agenda has already moved on to the link between access to the market, employment, migration and the sustainability of adjustment,” said a SELA document.

Rangel said “the link between employment and trade, and how the industrialised nations address the unemployment issue, marks the negotiations to put the finishing touches to the WTO and those needed to create an American Free Trade Area.”

Arriola said that the industrialised countries meet and advance their agenda of common issues despite the differences they have, saying that the Latin American and Caribbean nations must attempt a similar form of negotiation not to be “left out of the game.”

At the July meeting Arriola will be standing down, and the post of SELA permanent secretary is expected to go to Carlos Monetta, Argentine Foreign Ministry Asia and Pacific expert.