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.
John Maisto (file photo)
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
"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
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
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
U.S. Department of State
An "Opportunity Summit" for the
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
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
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
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.