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Ambassador Maisto Outlines Goals for Fourth Summit of the Americas

Official says summit offers opportunity to increase regional competitiveness

Posted: September 30, 2005

Ambassador John Maisto. (U.S. Embassy photo by Vince Alongi)
John Maisto (file photo)
The nations of Latin America and the Caribbean must increase their competitiveness to combat poverty and inequality, and the upcoming Summit of the Americas offers a "golden opportunity" to focus on the policies needed to enhance regional competitiveness, says U.S. Ambassador to the Organization of American States (OAS) John Maisto.

In September 29 remarks at the Miami Herald Competitiveness Conference in Miami, Maisto outlined the importance of increasing the competitiveness of the Americas and expressed U.S. hopes for the Declaration and Plan of Action to be issued at the November 4-5 Fourth Summit of the Americas in Mar del Plata, Argentina.

Maisto, who is also U.S. national coordinator for the Summit of the Americas, noted that most of the nations of Latin America and the Caribbean fared poorly in a recent global competitiveness survey. He said that even though nations such as El Salvador, Ecuador, Jamaica, Bolivia, Mexico and Paraguay are taking steps in the right direction, and regional economic growth and employment figures are positive, more must be done to combat poverty and fulfill popular aspirations.

"What is needed are initiatives that interweave sound macroeconomic policies with targeted, effective microeconomic programs that increase access to opportunity for all our citizens in such vital areas as credit, education, and health care," Maisto said. "The summit process can help lead the way to achieving this kind of integrated reform agenda."

The U.S. official said that free trade, investing in people and good governance have been integral elements in past summits, and he added that the United States is confident that these themes also will form the core of the upcoming summit.

Maisto said that the Fourth Summit of the Americas offers a remarkable opportunity to increase regional competitiveness, and he urged regional governments to commit themselves to removing barriers to investment, innovation and entrepreneurship; to ensuring a legal and security environment that allows people to take advantage of opportunities; and to equip people to benefit from new opportunities by investing in health and education.

As part of this effort, Maisto said, the United States will encourage fellow summit participants to highlight the importance of pro-growth policies and to foster an environment that allows the private sector to flourish. These efforts, he said, are "the only way to sustainably generate more, better-quality jobs."

As the United States continues to work with its hemispheric partners to shape the summit process, Maisto outlined U.S. expectations for the gathering of hemispheric leaders.

He said that the U.S. supports a specific initiative in the Summit Plan of Action that calls for a meeting of high-level hemispheric government officials on competitiveness. Maisto added that the United States also expects the summit declaration to express support and build momentum for the current World Trade Organization talks, as well as the proposed Free Trade Area of the Americas.

He said that the Fourth Summit would encourage governments to do more to improve and extend good governance and underscore the importance of education and training for job creation. Moreover, the summit will continue to work to expand access to emergency lifesaving drugs to fight AIDS and other diseases, according to Maisto.

"In Mar del Plata, our leaders will present an integrated reform agenda that can guide our hemisphere to a more competitive and prosperous future," he said.

Following is the text of Maisto's prepared remarks:

(begin text)

U.S. Department of State

An "Opportunity Summit" for the Hemisphere

Remarks by Ambassador John Maisto,
U.S. Permanent Representative to the OAS and
U.S. National Coordinator for the Summit of the Americas,
at the Miami Herald Competitiveness Conference

September 29, 2005

In his recent address to the U.N. General Assembly, President Bush emphasized, "Democratic nations grow in strength because they reward and respect the creative gifts of their people." I believe this notion goes to the heart of how we can boost competitiveness in Latin America and the Caribbean, and how the Summit of the Americas can contribute to this urgent task.

Today, our region risks falling further behind its global competitors. The World Economic Forum's 2005 competitiveness survey placed only five Latin American countries in the top half (out of 117 countries). Chile ranked 23rd. Uruguay was the region's next highest at 54th most competitive. Eight ranked in the bottom quarter. Here's one example of why this is the case: The World Bank's latest Doing Business report shows that it takes an average time of 63 days to start a business in Latin America and the Caribbean. This is just 3 days longer than the average for sub-Saharan Africa. By contrast, it takes only 6 days to start a business in Singapore and only two in Australia.

The challenge we face clearly is to increase competitiveness in order to fight poverty and inequality. These are major and growing issues in Latin America and the Caribbean, where almost 100 million people live in extreme poverty, according to ECLAC. Popular expectations about democracy and market reforms must be met in order to bolster stability and democracy. Demands for results are evident throughout the hemisphere. These demands are likely to be amplified over the next year during an especially busy campaign season in which a dozen countries are scheduled to face presidential elections by the end of 2006.

Competitiveness is a powerful tool against poverty, as well as a benefit to businesses -- no matter their size. The vast majority of people who escape from poverty do so by starting a small business or finding a stable job in an existing one. The World Bank's "Doing Business" report clearly shows that across the globe, reducing unemployment and the prominence of the informal sector depends on increasing the ease of doing business. Creating a more competitive private sector is key to producing the kind of sustained economic growth which, according to the IDB, is absolutely essential for job creation.

There are countries in Latin America and the Caribbean that are moving in the right direction on competitiveness, but we must do more. In El Salvador. business start-up now takes 75 days fewer than in 2003. Ecuador cut its time by a quarter. Jamaica introduced a new company law and streamlined social security and tax registration. Its reforms cut the time by 22 days. Bolivia cut 2 weeks off its lengthy process. Mexico and Paraguay are reforming, as well. In general, the average time to start a business in the hemisphere has been reduced from 71 days in 2004 to 63 days in 2005.

The broader economic picture for the region is encouraging. In 2004, economies grew 5.5 percent, up from 2 percent the previous year. And this growth did lead to employment. In 2004, the region's unemployment rate fell from 10.7 percent to 10 percent, a decline that favored 800,000 people. Sustained economic growth will lead to even better job creation rates.

All this -- improved economic growth, decline in unemployment, and the spread of reforms to remove obstacles to starting businesses -- is a good start. Clearly, though, there is still a long way to go in order to fulfill popular aspirations. What is needed are initiatives that interweave sound macroeconomic policies with targeted, effective microeconomic programs that increase access to opportunity for all our citizens in such vital areas as credit, education, and health care. The summit process can help lead the way to achieving this kind of integrated reform agenda.

The Summit Process

The Summit of the Americas process has helped unleash the "creative gifts" of our people and can do more to expand access to opportunity. Free trade, investing in people, and good governance have been integral to past summits. We are confident that they will also form the core of the upcoming Fourth Summit of the Americas.

The Fourth Summit of the Americas will take place in Mar del Plata, Argentina from November 4-5, 2005. Its theme, chosen by the Argentine government as host, is "Creating Jobs to Fight Poverty and Strengthen Democratic Governance." The Summit will bring together the Western Hemisphere's 34 democratically elected leaders to address common political, economic, and social challenges.

I believe it sends the right message to have Argentina as the host for this summit because of the way Argentina showed steadfast commitment to democracy during difficult economic times. Argentina's economic recovery is also inspiring, reaching 9 percent growth in 2003 and 2004 and lowering unemployment from 25 percent to 13 percent. We are looking forward to November. Mar del Plata offers a golden opportunity to increase our region's competitiveness with the right policies.

Beginning with the first Summit, held in Miami in 1994, these events have advanced a shared, multilateral agenda for improving democracy, human rights, and free markets in the region. Summits work best when they generate concrete, measurable commitments by the region's governments. For example, at the 2004 Special Summit, our leaders committed to creating the necessary conditions to halve the cost of remittances by 2008 by promoting competition, eliminating unnecessary regulatory barriers, and encouraging the adoption of new technologies. Since launching this initiative, the cost of sending remittances within the region has fallen from an average of 12 percent to approximately 8 percent.

The Inter-American Democratic Charter is also a fruit of the summit process, and one which is becoming increasingly relevant. The Declaration of Florida, passed by the OAS General Assembly in June, strengthened the ability of the OAS Secretary General to use the Charter to defend democracy in the region.

We are committed to producing a Declaration and Plan of Action for the Fourth Summit that reflects our collective best thinking, and that of development experts, on how to improve competitiveness. Three areas are central: we need to remove barriers to investment, innovation and entrepreneurship; ensure a legal and security environment that fosters and protects the ability of people to take advantage of opportunity; and equip people to benefit from new opportunities by investing in health and education. We are engaged with our fellow Summit participants to use this opportunity to highlight the importance of pro-growth policies and a proper enabling environment for the private sector to flourish. This approach is the only way to sustainably generate more, better-quality jobs.

Many governments, the U.S. included, support a specific initiative in the Fourth Summit's Plan of Action with direct bearing on today's topic: holding a Competitiveness Ministerial. This event would bring together high government officials from across the hemisphere. They would represent several ministries with competitiveness responsibilities from each country. This event would facilitate the sharing of best practices and the crafting of a focused reform agenda. Of course, much more than just one high-level meeting is needed to address the region's "competitiveness gap," but this is a necessary start.

Trade provides one vital area for the removal of barriers and growth of opportunities. This is why President Bush pledged at the U.N. General Assembly, "We must work together in the Doha negotiations to eliminate agricultural subsidies that distort trade and stunt development, and to eliminate tariffs and other barriers to open markets for farmers around the world." And the president continued: "The United States is ready to eliminate all tariffs, subsidies and other barriers to the free flow of goods and services as other nations do the same." We expect the Fourth Summit of the Americas to express support and build momentum for the Doha Round on Tariff reduction and for the Free Trade Area of the Americas. Expanding trade is good for economic growth and also encourages policy reforms and good government to meet international competition.

Good democratic governance creates conditions in which creative gifts can flourish. Fighting corruption and removing obstacles to business are key domestic responsibilities. This is why President Bush stressed the importance of the 2002 Monterrey Consensus in his U.N. address. In this consensus, developing countries agreed to take responsibility for their own economic progress through good governance, sound policies, and the rule of law. In return, developed countries agreed to support these efforts in various ways including by increasing aid to nations that undertake these necessary reforms. The United States has enthusiastically backed this partnership approach by establishing the Millennium Challenge Account. This program provides grant development assistance to countries in the region that have chosen this road to reform. The Millennium Challenge Corporation recently signed a $215 million Compact with Honduras and a $175 million Compact with Nicaragua. The Fourth Summit will encourage governments to do more to improve and extend good governance.

Security is important too in its multiple dimensions, ranging from street crime to international threats like terrorism. The rule of law is vital for competitiveness. The Summit process facilitates sharing of best law enforcement practices and supports international agreements and conventions that combat illegal arms trafficking, money laundering, and other threats.

Investment in people is another area where governments, although not governments alone, must play a constructive role. An educated work force is critical to competitiveness. Latin America and the Caribbean do have a good level of access to primary education -- 93 percent according to ECLAC. Unfortunately, school completion rates and educational quality are not all they should be, yielding low performance on international tests. The Fourth Summit will underscore the importance of education and training for job creation. We also expect it to promote school accountability, teacher training, and science education. The latter (science education) is particularly encouraging because its inclusion has been inspired in part by civil society groups which recognize the region's critical need to perform better in this area. Many governments have been receptive to their message, and there is clearly potential for expanded public-private partnerships regarding Science and Technology education and infrastructure.

Public-private partnerships are vital in a wide range of areas. Creating and extending access to opportunity typically requires a wide range of actors including local officials, civil society groups, entrepreneurs, parents, and citizens in general. For example, Brazil's innovative poverty-fighting program "Bolsa Familia" requires federal agencies, municipalities, NGO's and beneficiaries to all take responsibility for making its Conditional Cash Transfer (CCT) system work. CCT's help poor families in the present while seeking to avert future poverty by providing cash in return for beneficiaries keeping their children in school, getting them vaccinated, and having their health monitored.

Health is a key aspect of investment in people. AIDS and other diseases represent both human tragedies and pose significant obstacles to development. The summit process has worked and will continue to work to expand access to emergency lifesaving drugs to fight these epidemics. International cooperation regarding emergent diseases is another summit focus that can help make sure our people's creative potential is not cut tragically short.

I have referred throughout this speech to the Summit process, because it is not just a singular event. The Fourth Summit in Mar del Plata builds on the achievements of the previous summits; all of these events together also form part of a larger dialogue that includes input from a wide range of civil society groups, academics, journalists, and entrepreneurs. All have vital roles to play in identifying challenges, suggesting solutions, and holding governments accountable. The summit process provides a great opportunity to demonstrate our shared values and vision, and commitment to move ahead to achieve measurable goals. In Mar del Plata, our leaders will present an integrated reform agenda that can guide our hemisphere to a more competitive and prosperous future.

Conclusion

We must break down barriers to opportunity to unleash the tremendous entrepreneurial spirit present throughout the Americas. When Secretary Rice presided over the OAS General Assembly in Fort Lauderdale last June, she noted that the 2 million Cubans in the United States earned a combined income of $14 billion dollars as of 1999. She contrasted that with Castro's Cuba where 11 million people produced a GDP of only $1 billion. As you know, in South Florida, when people have the freedom to prosper, the results are impressive. As President Bush said at the U.N. General Assembly, "We must defend and extend a vision of human dignity, opportunity, and prosperity." That is the key to how the United States is approaching the Fourth Summit of the Americas.

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