Former U.S. Ambassadors to Argentina
Ambassador Gutierrez's Speech
LATIN AMERICA: LESSONS FROM THE PAST AND HOPE FOR THE FUTURE
Remarks by Ambassador Lino Gutierrez at the Foro del Bicentenario Conference
April 22, 2005
OPENING
Thank you very much for giving me this opportunity to speak to such a distinguished group of young leaders from across the political and economic spectrum of Argentina. I know this conference is part of a series of talks looking at the world in the future. Today I would like to speak to you about Latin America in 2020.
I know you have discussed in past conferences about how the world and Argentina will be in 2010, the year of Argentina’s bicentennial. I would challenge you to think longer term and see 2010 as a first lap in a longer race towards a better region. The goals that you and your colleagues around Latin America accomplish by 2010 will be important stepping-stones in the much longer-term process of Latin American political and economic development.
LATIN AMERICA IN 1977
In order to understand where Latin America is headed in the next 15 years, it is important to understand where Latin America has come from in the past few decades. When I joined the U.S. diplomatic service in 1977, most Latin Americans lived under dictatorships. In many countries in the region, political repression was the norm. Basic freedoms, such as freedom of the press, speech, and association were nonexistent. The region was a Cold War battleground, with bloody armed struggles ongoing in many countries.
The economic picture in Latin America in 1977 was not much better. High tariff barriers, low levels of intraregional trade, and widespread underdevelopment, typified the region. A small group of elites, who clung to a comfortable status quo, controlled the economies in most countries. The ideology of autarky, trade protection import-substitution, and large-scale state intervention in the economy heavily influenced the thinking of Latin American economic policymakers. These policies benefited a small number of industrialists in Latin America who could produce low quality goods at high prices to a captive market of consumers. The result was stagnation, economic inefficiency, and high inflation.
CHANGE SINCE 1977
Since that time, Latin America has undergone a sea-change. Beginning in the 1980s, Latin America has returned to democracy. Armed insurgencies that plagued Latin America for decades have been resolved in almost all countries. With the notable exception of Cuba, Latin Americans and their Caribbean neighbors live under leaders of their own choosing. Today, free elections and peaceful transfers of power are now the norm and former adversaries compete not on the battlefield but in the democratic arena of electoral politics.
Political progress in the region has gone hand in hand with economic reforms. From 1980 to 2000, the value of Latin America’s exports to the world increased six-fold. The UNDP’s Human Development Index suggests that since 1980 quality of life has improved in nearly every country in the region — and in some cases dramatically.
Although many countries face severe economic challenges, the old demons are gone: hyperinflation is largely tamed; countries are increasingly open to foreign trade and investment; economic setbacks occur but no longer lead inevitably to economic crises affecting the whole hemisphere. Indeed, the spread of democratic and economic freedom has opened unprecedented opportunities for millions to help lift themselves out of misery.
CHALLENGES THAT REMAIN
Nonetheless, these change have not been enough. The region is still plagued by widespread poverty. Growth has not been sufficiently strong and sustained. The rules of the game are not sufficiently clear, and juridical security is questioned in many countries.
People in the region are weary of waiting for their lives to get better and for their futures to get brighter. Clearly, there is lingering dissatisfaction with the quality of democracy and the results of economic reform.
This lingering dissatisfaction reflects the high expectations that people throughout Latin America have about democracy. On the positive side, civil society is demanding more from their political leaders and institutions. Paradoxically, such feelings are a measure of how far our hemisphere has come, politically and economically.
In discussing the progress of democracy in the hemisphere, the former President of Bolivia, Jorge Quiroga--who also happens to be an avid mountain climber--said that Latin countries have reached the "snow line" in their journey up the democratic mountain. They have come far; but there is still hard slogging ahead.
It is important to emphasize that the U.S. also continually struggles to deepen our democracy. We too struggle with numerous social problems, such as drug addiction, poverty, and a crisis in the family unit.
The U.S. does not have all the answers to societies ills. What we have learned from our experience as the oldest democratic republic in history is that democratization is a process, not a fixed end. Democracy constantly needs to be renewed and improved in order to survive.
LATIN AMERICA IN 2020
As the region looks towards the future, it is clear that much still needs to be done. What will the region look like in 2020? I will not pretend for a moment that I have a crystal ball that allows me to see exactly what the future will be. I will offer my vision and hope for Latin America in 2020.
I believe Latin America in 2020 will be economically prosperous and fully integrated with its hemispheric neighbors and the world. I believe Latin America in 2020 will be a region of even stronger democracies, where citizens will not only elect their leaders, but also have the confidence in their political and judicial institutions to serve their interests regardless of which party is in power. I believe Latin America in 2020 will shine as an example to all developing countries of how to succeed economically and politically.
How will the region get there?
ROAD TO SUCCESS IN REGION
I do not have all the answers to that question, but I have some suggestions based on my nearly 30 years working in the regions.
1) Improve the educational system. Sadly, schools in many parts of Latin America are simply not educating the young. Almost half of the students in the region who enter primary school fail to reach fifth grade, and only about 30 percent finish secondary school. As this young audience can attest, the youth are the future of the region. Without a greatly improved educational system, this future will be more difficult and only open to those with the economic resources to pay for quality education, reinforcing elitism that is counter-productive to democracy.
2) Vigorously prosecute corruption. Peruvian novelist and one-time presidential hopeful Mario Vargas Llosa has observed that cynicism is one of Latin America’s most prominent cultural traits because most citizens consider politics to be the art of enriching oneself. The cycle of cynicism will only be broken when the facts on the ground change.
3) Institutionalize transparency in government. The best cure for public cynicism is government transparency. The use of electronic procurement for government contracts, sponsoring freedom of information legislation, and establishing an ombudsman office to monitor allegations of corruption are proven ways to help this process.
4) Deliver accountability of elected officials to their constituents. Politicians are more likely to behave responsibly if they can easily be held accountable by the voters from a defined district or are subject to judicial sanctions.
5) Build an impartial, professional, and apolitical judiciary. Nothing mocks democracy more than a corrupt justice system. Some countries in the region have enjoyed great success in judicial reform by, for example, streamlining civil code procedures, introducing computerized case tracking systems and naming judicial councils that oversee hiring, firing, and disciplining judicial employees.
6) Extend economic opportunity to people from all walks of life. It’s impossible to wipe out poverty and inequality overnight. But the path to prosperity is built upon affording individuals the opportunity to pull their own weight and create personal wealth. Focus on such areas as reducing red tape in business registration, broadening access to bank credit, harnessing remittances for productive purposes, and providing wider access to education and property titling.
7) Professionalize the police force. Public safety in not only a crucial function of government, but police officers are often the most visible personification for most citizens of the power of any administration--so they must act with efficiency and respect.
8) Work with your partners in the world. Be open to free trade and don't fear competition, which are the only proven paths to growth and prosperity.
HOW THE U.S IS COMMITTED TO HELP
The U.S. is committed to being one of the nations that helps Latin America continue its process of economic development and democratic consolidation. Your success is our success.
In many parts of Latin America we are providing assistance to strengthen democratic institutions ranging from legal code reform and judicial training to anti-corruption projects and conflict resolution.
President Bush has put a premium on good governance and social investment, which he recognizes as critical to the future of the Americas. It was with this in mind that he announced the Millennium Challenge Account (MCA) initiative, which was funded by Congress at $1 billion for fiscal year 2004 and $1.5 billion for fiscal year 2005. The President’s goal is that the MCA be funded at $5 billion by 2006.
To be eligible for this new money, nations must govern justly and honestly, uphold the rule of law, fight corruption, and invest in their people. And they must unleash the energy and creativity necessary for economic growth by opening up their markets, removing barriers to entrepreneurship, and reducing excessive bureaucracy and regulation.
Unlike traditional assistance programs, MCA provides an incentive for countries to invest in their people so that they have the resources and opportunities, such as education, adequate healthcare and nutrition, and equality before the law, to improve their own quality of life and contribute to the greater good.
The U.S. would also like to see our economic relationship with Latin America grow even more. As a way to promote economic growth for the entire region, we need to break down trade barriers to create a better commercial environment. Mexico is a perfect example of the positive changes that free trade can bring to a country’s economy.
Before NAFTA, Mexico ranked 36th among world exporters. Now it ranks eighth. In ten years, Mexico’s exports to the U.S. have more than tripled from $40 billion in 1993 to $138 billion in 2003. Today, Mexico, with almost half the population than Brazil, has a much larger economy. That is food for thought.
The success of the Free Trade Area of the Americas, FTAA, will bring down trade barriers to benefit and help the entire Western Hemisphere. Trade is a country’s key to achieving increased economic growth, increased international competitiveness and greater prosperity for its citizens.
CONCLUSION
In conclusion, it is clear that Latin America has come a long way since my early days as a diplomat in the late 1970s. Political and economic freedom is now the rule, rather than the exception. There are still many challenges in the path of further regional economic and political development. The way ahead is open. I have provided my vision of how the region might look in 2020 and some suggested areas of concentration to help the region get there. My intention was not to be predictive, but rather to offer my thoughts as someone who has focused on Latin America since my youth and to open up the discussion on the future of the region with all of you.
I want to emphasize that I do not think my optimistic view of the future of Latin America is necessarily 100 percent assured. There is a risk that if Latin America does not move forward on the types of reform I mentioned previously to strengthen its institutions and deepen its democracy and gives in to populist calls to raise tariff barriers and shut the region off economically from the world, then Latin America’s future will not be bright. I, however, have confidence in the people of Latin America to make the right decisions to continue to steer the region in the direction of further democratic consolidation and stronger economies. As long as there is political and economic freedom in the region, there will be a way to make the necessary changes to confront the challenges of this new era. So my message to you the future leaders is "defend your freedom."
Many historians have described the 20th century as the U.S. Century. I believe that was true. Many of these same historians predict that the 21st century will be China’s Century. I agree that China is an important country that will undoubtedly have a major role in world politics in this century. However, I believe that the 21st century will go down in history as the American Century, and by this I mean all of the Americas. The New World was, and still is, the place where people came from around the world to start a new life, open to change and filled with the hope of creating a new world where success would not be determined by birth or connections, but on merit. It is this shared dream that continues to bind all of us together in the Western Hemisphere as we look toward the future.
You are the future leaders of Argentina. The decisions you will make in the next decade and a half will help to shape the future of this country and the region. I will certainly be retired by 2020 and it will be your world that you will be creating. I am not here just to give you my view of Latin America’s future. I am anxious to hear your thoughts on what you think Latin America will look like in 2020 and what needs to be done to ensure the region’s future will be positive.