U.S. State Department Geographic Bureaus: Latin America Bureau


Keynote Remarks
Ambassador Richard C. Brown
Senior Coordinator, Summit of the Americas

George Washington University
School of International Business
April 6, 1995

Last year, on December 11, in one of the most historic events of this Hemisphere, the 34 democratically-elected leaders of the Western Hemisphere met in Miami and signed a Declaration of Principles and a Plan of Action. They committed themselves and their countries unequivocally to democracy, to respect for human rights, to open markets, to free trade, to preservation of the environment, and to the equitable sharing of the benefits of growth among all segments of the population.

In a time when divisions and dissensions challenge international order in many parts of the world, and when the pressure to retreat behind protectionist barriers seems to be gaining strength, the reaffirmation by President Clinton and his Western Hemisphere counterparts of fundamental values at the Miami Summit is an expression of hope and confidence in the promise of our future.

The view of Latin America and the Caribbean as the home of autocratic generals, communist revolutionaries or greedy bureaucrats with palms out÷so widely believed even now among many Americans÷is fortunately out of date÷although maybe not very far out of date.

A Decade ago, most Latin Americans lived under authoritarian governments. Today, every country in the Western Hemisphere except Cuba is a democracy.

A Decade ago, civil war raged in Central America. Today, that region is at peace and leads the hemisphere in the quest for sustainable development.

A little over a Decade ago, the U.S. had to intervene in Grenada to protect American lives and restore constitutional rule threatened by a brutal Marxist regime. Today, the Eastern Caribbean is leading the hemisphere in the development of microenterprises and small businesses.

A Decade ago, a military regime in Argentina had just emerged from a war with the United Kingdom over the Malvinas/Falkland Islands and had carried out a "dirty war" against its own people. Today, Argentina's civilian leadership is South America's leading defender of democracy.

A Decade ago, Chile and Argentina faced each other over a hostile border. Today, that same border is the second longest peaceful boundary in the hemisphere, second only to the U.S./Canadian border.

A new generation of leaders is taking charge in Latin America, young, well-educated, and committed to democracy, free markets, and modern government. Their "quiet revolution" may lack the drama of the fall of the Soviet Empire in Eastern Europe, but its results are far more significant for us.

You probably know that Canada and Mexico are, respectively, our largest and third largest trading partners. What you may not know is that, if current trends continue, by the year 2000 U.S. exports to Latin America and the Caribbean could exceed those to all of the European Union. And by the year 2010, they could exceed those to Europe and Japan combined.

I think it is not well understood how important even the relatively small countries of the Americas are to U.S. trade. For example, we sell more to the 14 million people of Chile than to India's 920 million people. We sell about as much to Costa Rica's 3 million people as to all the former Soviet satellites of Eastern Europe combined, which contain 100 million people.

In Latin America and the Caribbean, most governments are well along with reform programs to establish monetary and fiscal discipline, modernize taxes, privatize state enterprise, open up to international trade, and free up internal markets. The commitment to market economics is strong and increasing. The socialist and statist economic theories of the past, which left most Latin American countries, in their own words, "on the periphery" of international economic activity, have been replaced by an acceptance of market discipline and a determination to compete in the international marketplace. To cite just one example of the positive impact for us of this change, the average tariffs imposed by the major Latin American countries on imports went from 47% in 1985 to 13% in 1993.

The biggest winners, of course, are the people of the region. The benefits of political and economic reforms are everywhere apparent: There has been more growth in the four years 1991-1994 than in the whole decade of the 1980's (14.0% vs. 12.9%).

Inflation is coming under control. In the late 80's, inflation for the region averaged over 1,000%. Last year, only Brazil experienced inflation at that level, and in recent months Brazil's rate has come down dramatically (from 50% monthly in early 1994 to 2-3% monthly recently). In 1994, average Latin American inflation excluding Brazil was only 16%.

Investors have been flocking to the region. In 1994, the inflow of capital amounted to $57 billion. Capital inflows for the four years 1991-1994 far exceeded total flows during the entire previous decade ($221 billion vs. $134 billion).

There has also been substantial social progress. Since 1960 literacy is up from 66 percent to 89 percent; life expectancy has moved from 56 to 69 years; middle school attendance increased from 15 percent to 56 percent; and university attendance is up twelve fold.

The story, obviously, is not over. Although a great deal has been accomplished to date, much remains to be done.

The first challenge is to continue and complete the reforms begun so well. History shows that a critical mass of restructuring must be achieved for growth to be self-sustaining. Countries which have stopped reforming after going only part way have ended up with disastrous results, paying high transition costs while achieving few of the expected gains.

A second challenge is that the expectations raised by the initiation of reforms must be met by continuing results, and results which produce benefits for all sectors of society. The task of showing that markets work for all is particularly important because of the pervasiveness of poverty. By various estimates, one-third to one-half of the people of Latin America live in poverty. Income inequality is greater than in any other region. Moreover, disparities between rich and poor are increasingly apparent as communications improve and as the region becomes more urbanized.

It was with these challenges in mind that President Clinton conceived of the Summit of the Americas as an occasion to consolidate and celebrate the progress made to date, and begin a new era of cooperation aimed at even greater prosperity and sustainable development enjoyed by all.

The Summit proved to be a truly historic event. Both in private session and in public, there was an awareness of common interests which allowed leaders to discuss frankly issues of extreme sensitivity, such as corruption, drugs, crime, poverty, human rights, and the environment. Such a dialogue would have been unthinkable even five years ago.

The Summit confirmed the broad consensus on basic principles which are held within the hemisphere. The documents signed by the leaders were exceptional for their clarity, specificity and comprehensiveness. They set up a bold agenda for the rest of the century and beyond. The Summit's Plan of Action outlines 23 initiatives and well over 100 specific national and international actions which address democracy, protecting human rights and civil society, economic integration, improving the well-being of people through better health care and education, and protecting the environment.

The section on trade is perhaps the most visionary, calling for completion of negotiations on the Free Trade Area of the Americas--a $12 trillion market of 800 million consumers--by the year 2005. Is this just a pipe dream? Well, let me tell you what has happened in the trade area since December:

-- On February 2-3, the OAS Special Committee on Trade held an advisory group meeting to consider preliminary studies on rules of origin in various regional trade agreements.

-- The Trade and Investment Council for Central America and Panama met March 16-17 in San Jose, Costa Rica.

-- Five Andean countries came to Washington for a similar meeting last week. Both of these meetings discussed finite programs and goals in the trade area which could be agreed to by the Trade ministers in June. CARICOM countries will be here next week, and a meeting with the MERCOSUR countries is planned for early May.

-- An all-hands meeting in mid-May will finalize plans for the June 30 Trade Ministerial in Denver.

A second ministerial is already scheduled for March of 1996.

With a fast start like this, completion of the process by 2005 seems well within reach.

Summit implementation is proceeding at a fast pace in other areas as well. For example:

-- A global conference on reducing lead pollution was held March 14-15.

-- A Ten-Nation Telecommunications Summit was held March 27-30 in Santiago.

-- Draft conventions on money laundering and corruption have been proposed by Colombia and Venezuela, respectively, and a sub-ministerial on money laundering will be held in Washington in the next couple of weeks.

The OAS, in part with a special $1 million contribution from the United States, is doubling the size of its Unit for the Promotion of Democracy. The Inter-American Development Bank is launching, with the U.S. Department of Energy, a program to provide low cost and environmentally beneficial energy technologies that utilize indigenous renewable resources.

Just tomorrow, First Lady Hillary Rodham Clinton will be inaugurating a program to eradicate measles in this hemisphere at the Pan American Health Organization. (Measles are a contributing factor to infant mortality in this Hemisphere.)

Another important development has been the establishment of a Summit Implementation Review Group to monitor overall Summit implementation under the authority of Foreign Ministers, who will issue their first report this summer. Every country has agreed to report progress made on each of the Summit's Action Items. This, of course, will help spur implementation.

As impressive as each individual accomplishment under the Plan of Action, the Summit's greatest achievement may well be the "Miami Process," a new concept of relations within the hemisphere which is expected to involve governments, the private sector, non-governmental organizations and individuals in a cooperative effort to achieve common goals. The Summit's outstanding success could not have been achieved without the collaborative efforts of all of these groups, something unique in this hemisphere until now. We are determined that such cooperation not be unique in the future.

In closing, I want to say a few words about the Mexican peso crisis and the Peru/Ecuador border clash. Some people have said that these two negative developments have exposed the Summit as yet another exercise in hollow words with no substance. Nothing, in my view, could be further from the truth. In both of those cases, the quick and broad hemispheric response, the general hemispheric understanding that the problems of one or two countries are problems for all, and the acceptance of responsibility to act collectively for the good of all, demonstrate that the principles of the Summit's Declaration live in practice as well as on paper.

In the case of Mexico, we see evidence daily of the depth of commitment to market reforms in the pain of austerity shouldered by all segments of society. We see evidence daily of the depth of commitment to democracy in the "no holds barred" investigations of political terrorism and corruption. We see evidence daily of the depth of commitment to human rights and fundamental freedoms in the response to events in Chiapas. In the international stabilization package we see evidence of the recognition by other governments÷the U.S., Canada, Argentina, Brazil, Chile, Colombia÷that they have an important stake in prosperity and stability in Mexico. We are truly interdependent.

The package is enabling the Mexican government to conduct the necessary adjustments to stabilize their economy÷and restore a degree of confidence÷domestically and internationally. It is beginning to work and private investment is beginning to flow back into Mexico.

The revolution underway throughout Latin America and the Caribbean÷ towards democracy; towards the free market÷can bring with it painful adjustments and dislocation in the short term. Nowhere is this more evident than in Mexico. And yet every facet of the response÷by the Mexican government and by the international community÷gives evidence of the maturity and political will of leadership determined to stay the course, with the confidence that sacrifices will not be in vain.

Similarly, along the Ecuador/Peru border, we see evidence not that the Summit of the Americas made all the hemisphere's problems magically go away÷no one ever claimed that÷but that problems can be dealt with, and will be dealt with, in a spirit of hemispheric solidarity and determination. And of great significance in the Rio Protocol context, the four guarantor countries÷Brazil, the U.S., Argentina, and Chile÷ worked assiduously and solidly as a unit to resolve the problem, with no sense either from us or others that the United States must somehow police the hemisphere for its own good.

There will be other crises in the future. But we have a new means of dealing with them÷the Spirit of Miami. It is alive and well, nowhere more evident than in the positive, forthcoming and determined responses to the crises that are inevitable in a hemisphere so vast, so populous, and in the midst of such rapid and fundamental change.

The Miami Summit helped us recognize who we are and what we can achieve in the future. It gave us a manifesto of hope and a blueprint for action for the years extending into the 21st Century. The Summit gave us a powerful legacy upon which we can and will build a freer, more prosperous Hemisphere.

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