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Strong Leadership Credited for Improved Economies in Latin America

U.S. Treasury Department's official predicts continued economic expansion in region

Posted: April 11, 2005 Related item: Latin American, Caribbean growth in 2004 strongest in 24 years    

Washington -- Improved policies and strong leadership in Latin America explain why the region's economies have improved in recent years, says John Taylor, the U.S. Treasury Department's under secretary for international affairs.

Taylor spoke April 10 in his role as the U.S. temporary alternate governor at a meeting of the Inter-American Development Bank (IDB) in Okinawa, Japan. He said economic reforms in the region have built financial stability and confidence, "leading to increasing capital flows, higher levels of investment, and rapid export growth."

Continued economic expansion in Latin America is expected, Taylor said. Private forecasters foresee growth of 4 percent in 2005, following growth of almost 6 percent in 2004, the region's fastest growth in 25 years, added Taylor, who delivered his remarks at the April 10-12 IDB Board of Governors' annual meeting in Okinawa.

Taylor said Latin America's improved economy is "good news, but we all know the region can and should do better." He indicated that decades of sustained high growth are needed to bring down high poverty rates in Latin America.

The region faces two major challenges for sustained growth, Taylor said. The first challenge, he argued, is to "lock in" recent improvements in macroeconomic policy by putting in place "fiscal-responsibility regimes that discipline budget planning and execution" and by supporting what have proven to be "successful low-inflation monetary policies."

The second challenge, Taylor said, is to concentrate on "microeconomic reform, including trade liberalization and the reduction of burdensome regulation, in order to unleash job creation by entrepreneurs both small and large."

Taylor -- who has announced he will be leaving his position at the Treasury Department on April 22 -- said the United States intends to work hard to help ensure that the November 2005 Summit of the Americas in Argentina improves the lives of people in Latin America and the Caribbean.

The United States, he said, is working to ensure progress on such goals as expanding small-business lending, reducing the time to start a business, promoting "high-return infrastructure growth," and reducing the costs of sending remittances (money transfers) by migrants working in the United States to their families back home in Latin America and the Caribbean.

Meanwhile, the IDB said in an April 8 statement that millions of people in Latin America and the Caribbean could escape poverty if the region met goals set by the United Nations on reducing global poverty by 2015.

The IDB said more than 170 million people in the region could be removed from the ranks of the poor; another 120 million more people would have access to safe drinking water; nine million more children would go to school; and two million people would survive rather than die before the age of five if United Nations Millennium Development Goals were met.

During a U.N. special session in 2000, 189 countries set targets to cut poverty by 50 percent by 2015, and to improve health care, sanitation, environmental protection, nutrition, and gender equality, among other goals.

The IDB offered its predictions during an April 7-9 seminar in Okinawa entitled "Meeting the Millennium Development Goals: Sharing Best Practices between Asia and Latin America and the Caribbean." The seminar was one of a series of events held in conjunction with the IDB's annual meeting in Okinawa.

Carlos Jarque, manager of the IDB's Sustainable Development Department, said the U.N. goals should be the "driving force for cooperation and development" in the Americas.

Jarque said that while economic growth is critical for development, it is not enough. "Purposeful and targeted action is essential now to lift large numbers of people out of poverty and hunger," he said.

The statistics presented at the Okinawa seminar are "not only numbers, but the lives and the hopes of the poor and of societies at large," he added.

The IDB is holding its annual meeting for the second time in Asia. The Japanese government chose Okinawa as the venue, in large part because hundreds of thousands of its residents migrated to the Western Hemisphere in the late 19th and early 20th centuries. The world's largest Japanese diaspora (dispersion of people) is now in South America.

Eric Green
Washington File Staff Writer
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

 

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