Remarks by the OAS Secretary General at opening of Private Sector and Youth Fora

REMARKS BY THE OAS SECRETARY GENERAL
MR. JOSE MIGUEL INSULZA, IN THE OPENING OF THE
PRIVATE SECTOR AND YOUTH FORA
---final version----
(original text in Spanish)
April 15, 2009

 

I welcome you to this inauguration of the Hemispheric Private Sector Forum and the Youth Forum of the Americas.

This is not the first time I have had the pleasure and the honor of participating in the inauguration of a Hemispheric Private Sector Forum.  I have done so at OAS General Assembly sessions and am now doing so at this Summit of the Americas.  All of the previous hemispheric private sector forums have been of great use and have helped promote private activity and cooperation in our Region.

However, this meeting is more important than ever before, and cooperation, its central theme, is a matter of urgency.  We all know why: this meeting is being held when the world economic crisis has ceased to be a threat and has become a pressing reality for all countries of our Region, barring none.

We can no longer continue to say that our economies are better prepared to face the crisis now than on other occasions.  Undoubtedly they are because most of them have exercised sound fiscal management and diversified their foreign trade in recent years.  However, we must be aware that, despite this, the crisis will eventually affect all of them.  The global slowdown has led to a decline in the volume and price of exports, which over time will affect even those economies with more diversified foreign trade.  Likewise, although in varying degrees, all of our economies will feel the adverse consequences of drops in remittances, in direct foreign investment, in credit, and in the demand for services like tourism.

Of even greater concern is the fact that, according to ECLAC and IDB data, Latin America and the Caribbean may well reverse the progress they have made in the fight against poverty.  In the past six years, economic growth combined with improvements in the labor market lifted almost 40 million people out of poverty.  In addition, increases in the wages of urban workers and in social spending helped drive down inequality.  But the present crisis, along will higher food prices and an expected further increase in energy costs, endangers these achievements, and more than 12 million people in Latin America and the Caribbean run the risk of falling below the poverty line in the next two years.

The worsening labor market indicators and the decline in remittances will have a negative distributive effect, and therefore, under current circumstances, public policy is facing the challenge not only of stabilizing economic growth through anti-cyclical measures but also of designing instruments for protecting the most vulnerable population from the effects of the crisis.

Some of our governments have already taken measures to address the impact of the crisis. However, most of the Region’s countries do not have the resources to do so.  Consequently, we cannot but applaud the decision of the G-20 to increase by $100 billion the funds provided to the multilateral development banks to enable them, in turn, to respond to the demand of struggling states for public investment resources.  Equally important is the decision to provide $250 billion to support trade financing.  Naturally, we will continue insisting that our Inter-American Development Bank should benefit from these capitalization decisions, as we are convinced that, at this critical juncture, the IDB is in the best position to understand and support the economic policy measures needed to move forward.

It is essential to promote special programs for public investment in infrastructure, to expand unemployment insurance, and to strengthen financing, coverage and institutional systems for social programs in education and health.  The stimulus packages developed must promote more rapid recovery to protect the most vulnerable sectors in our nations.

In addition to government stimulus measures, there is a need for transparent and committed management by all sectors and for clear and stable rules and regulations that promote a favorable climate for both local and foreign business and investment.

In the midst of this sensitive global economic situation, we must not be tempted to succumb to protectionism.  Our own experience demonstrates that protectionism hinders growth and economic development.  Thus we also applaud the G-20 commitment to conclusion of the Doha Round.  If this does occur, the global economy could be buoyed by increased trade of at least $150 billion per year.  This situation would doubtless benefit the countries of our Region.

The increased interdependence of our economies has pointed to the need for further cooperation among nations globally and regionally.  Thus, just as the G-20 meeting emphasized the importance of dialogue and concerted action among the world’s most important economies, this Summit of the Americas, which is called upon to promote major goals in the areas of human prosperity, energy security and environmental sustainability in the Americas, affords us an opportunity to reinforce hemispheric cooperation so as to tackle the crisis and ensure that it does not impede the progress made in the fight against poverty.

In this context and although the Summit’s main players are the states, the private sector clearly has an essential role to play in achievement of the Summit goals.  In fact, if the crisis is to be overcome, private enterprise must continue to be the engine of job creation and growth.  That spirit underlies the Declaration of Commitment of Port of Spain, and the agenda of this business forum that has brought you together today, is precisely intended to enable the Region to move in that direction.

This cooperation and this commitment are especially important in three areas of interest to this Summit: infrastructure development, energy, and information and communication technologies.

The countries of Latin America and the Caribbean must still recover after decades of a shortage of investment in infrastructure.  According to IDB studies, Latin America and the Caribbean need to invest at least twice the amount they are now investing in infrastructure.  Present investment is about two percent of their annual GDP, in sharp contrast, for example, to the nine percent invested by China.

During the next two decades, Latin America and the Caribbean will need to invest between four and seven percent of GDP each year in order to have high-quality infrastructure, which can become the backbone of their development.

Tomorrow, we will receive information on two of the largest infrastructure projects in the Hemisphere: the expansion of the Panama Canal and the Argentina-Chile Bioceanic Corridor.  Investments of this type not only help create jobs, modernize our countries and increase the competitiveness of our exports, but also are an example of the important role of public-private management and of confidence in the business sector to promote prosperity in the Americas.

The present energy crisis has also been exacerbated by the numerous energy challenges faced by the Americas.  For producers and investors, the capital markets have an adverse impact on their investment capacity, which means that they are less able to respond to the energy demands of the poorest sectors.

Consumers have seen a decline in their capacity to pay for energy because of increased unemployment and reduced household incomes.  It is a matter of concern that despite the great abundance of energy resources in the Americas, some 50 million people, most of them poor people in rural areas, do not have access to reliable and affordable electricity. 

The consequences for families struggling to survive with dignity are intolerable and are reflected in the health of children, who breathe air contaminated by smoke from wood-burning stoves.  What is therefore needed more than ever before is energy cooperation and integration, as well as a commitment by governments and the private sector to continue consolidating regional energy integration.

Further, we cannot allow that progress made in recent years in information and communication technologies (ICTs) to come to a stop.  On the contrary, we have to promote ICTs as a catalyst for growth during the global crisis.  The development of better quality, less expensive, and more rapid ICTs increases productivity and economic growth and contributes to the competitiveness of small and medium-sized business, a driving force behind job creation. 

Governments and the private sector will have to work together to foster an ICT infrastructure development that facilitates universal Internet access, allows the use of digital tools in education, and maintains the considerable progress made in the Region in Internet penetration and personal computers.

If all these objectives are to be achieved, a climate of confidence must exist among governments, entrepreneurs and workers who, with the support and participation of organized civil society, will contribute to the establishment of priorities, standardization and the achievement of consensus on what must be done.

Active participation by the private sector, through public-private partnerships and dialogues like the one to be held on Friday with the Hemisphere’s governments, will be essential to moving forward with the development agenda, strengthening democratic governance in our Region and confronting the crisis.

I appreciate the leadership and commitment of the organization “Private Sector of the Americas”, its president, Ernesto Gutiérrez, and the business leaders who work with them, in reinforcing public-private dialogues in the search for solutions to the problems of our peoples. And I thank all the participants in this event for being here to exchange views on the essential role of the private sector and public-private partnerships in addressing the major challenges of the nations of the Americas.

On this occasion, we are also inaugurating the activities of the Youth Forum of the Americas.  This Forum is the result of a joint effort by the Young Americas Business Trust, the National Secretariat of the Fifth Summit and the OAS General Secretariat.  Its theme is “Building Partnerships for the 21st Century".

The Forum affords an opportunity for young people to discuss how to implement the topics of the Fifth Summit and to submit their recommendations to the Heads of State and Government of the Americas.  These recommendations are the result of an important youth participation process carried out over the last nine months, which involved four subregional dialogues, an online consultation and a virtual platform.  The youths had the opportunity to present their preliminary conclusions to the OAS Permanent Council and the Summit Implementation Review Group.

As a result of these efforts, we are awaiting a “Declaration of Port of Spain of the Youths of the Americas”, together with its “Plan of Action”, both of which will set forth their recommendations.

The working groups, roundtables and plenary sessions to be held in the coming days will make it possible for ideas to be exchanged and fine-tuned in preparation for that Declaration.  During those meetings, the experience of the young participants will be complemented by contributions from high-level public figures and lecturers who have been invited to participate in the dialogue.  Thus, we trust that those attending will return to their countries with a broader outlook of the current situation and with more in-depth theoretical, technical, and practical knowledge.

The OAS is convinced that youth plays a very important role in reinforcing democracy in the countries of the inter-American system; hence, our commitment to fostering a democratic culture among new generations.  To this end and in keeping with the guidelines of the Inter-American Democratic Charter and the Declaration adopted by the Organization of American States at its thirty-eighth regular session, held in Medellín last year, we have established a Focal Point for Youth in the OAS General Secretariat to support dialogue, technical assistance and strategic partnerships with youth.

It is in that context that this Forum is taking place – a forum whose importance is obvious.  Participation by each of you affords an opportunity to confront the challenges of the Hemisphere, through the establishment of goals to shore up good governance, prosperity and sustainable democracy for our peoples.

It is not a coincidence that we are inaugurating this Forum at the same time as the Hemispheric Private Sector Forum and that the activities of both forums will be held in parallel, since this is a means of furthering cooperative ties between different sectors of society.  I have no doubt that a cooperative relationship between young people and the private sector will become a decisive partnership for the future of our Region and for implementation of the agreements of this Summit. 

I would like to draw attention to and express appreciation for the important work done by the YABT in encouraging youth participation in the Summit of the Americas and to thank all the organizations that supported this effort.

I extend a most cordial welcome to all participants in this Youth Forum of the Americas and hope that your work in the next two days will yield positive results, enabling us to strengthen our joint capacity to promote democracy, justice, peace and prosperity in the Americas.

Thank you very much.