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LATIN AMERICA:
"Crisis as
Opportunity" – WEF Meeting
By Fabiana
Frayssinet
RIO DE JANEIRO (IPS) - Economic and
political leaders from Latin America and the
Caribbean are trying to help come up with
responses to a problem for which they do not
feel responsible – the global economic
crisis – although they do want to be part of
the solution.
Brazilian President Luiz Inácio Lula da
Silva, hosting the Latin America edition of
the World Economic Forum (WEF) in Rio de
Janeiro, said "No solution is possible
without the effective participation of
developing countries. We didn’t create the
problem, but we are a fundamental part of
the solution."
What is needed, according to Lula, is the
creation of a new global order, which he had
called for during his years as a trade union
leader, and which is now also seen as
necessary even by presidents of several rich
countries.
For the Brazilian leader, the region can
help provide answers by proposing a new
"democratic" financial system that would
establish controls not only on developing
countries, but also industrialised ones.
The new system would not be based on the
"easy profits" of the past, a "virtual
economy" that replaced production with "the
trading of paper, paper and more paper,"
said Lula, referring to financial
speculation.
He wondered how it could be possible for "a
part of the world that was so know-it-all,
that gave out so much advice on the economy
to emerging countries," to fail to realise
what was happening.
Lula, a moderate leftist, criticised that
"all of those people who for years were
earning trillions of dollars, who appeared
on the Forbes list of the world’s richest
people," didn’t notice that the GDP of poor
countries was not growing like their
fortunes, and that people’s lives were not
improving.
His speech was listened to closely by
Colombian President Álvaro Uribe, the only
other Latin American president who took part
in the opening of the WEF meeting Wednesday.
In his address, the rightwing leader sought
to mark his ideological differences,
referring to what he called a
"participative, but not all-powerful,
state."
Reports circulating at the meeting, which
ends Thursday, say the biggest challenge for
Latin America is to achieve economic growth
without accentuating social inequalities.
Foreign direct investment (FDI) in the
region will plunge to 43 billion dollars
this year, compared to a record 126 billion
in 2007, according to the Economic
Commission for Latin America and the
Caribbean (ECLAC).
WEF director for Latin America Emilio Lozoya
said that in this region, the crisis is not
a financial one, but a consequence of the
fall in external demand for its products.
Latin America’s exports to other markets
will shrink by at least nine percent in
2009, say the documents circulating at the
WEF meeting.
Agreeing with other participants that the
region is in a solid financial position to
face the global recession, Lozoya said it
was necessary to counteract the fall in
exports to rich countries with incentives
aimed at bolstering domestic demand, such as
an expansion in the availability of credit.
"A time of crisis presents a great
opportunity to make wise investments," he
told IPS.
"Latin America has had a decent rate of
growth in the last five years, five percent,
but it was not growing like the rates seen
in more dynamic markets like China and
India, because the big bottlenecks were
infrastructure and education," he said.
Marcelo Odebrecht, chief executive of
Brazil’s Odebrecht construction firm,
concurred with the need to invest in
infrastructure works to strengthen the
domestic market.
Representatives of some of the region’s
largest companies are now going even further
in their new understanding that a more
active role for the state is needed.
Odebrecht, whose business invests in several
countries besides Brazil, cited the need to
stimulate public works with a social focus,
like affordable housing programmes.
"It is not up to us, Latin America, to fix
what the developed countries have done, but
we have to combat the effects," the
executive commented to IPS.
That is "homework" for governments and
businesses in the region, which are ready to
do what they can, he said.
The "crisis as opportunity" mentality also
prevailed among other participants.
In the view of leaders like Lula, the
opportunity that is opening up is the
possibility to press for reforms and
controls in multilateral lending
institutions.
Meanwhile, spokespersons for Brazil’s
financial system, like Ricardo Villela
Marinho, say the crisis will play a crucial
role in getting the region "to come
together," "cooperate" and "increase
intra-regional trade."
Marinho is CEO of the powerful Brazilian
Itaú-Unibanco bank, which has ambitions to
expand around the world.
"Some believe the world is falling apart,
but actually it is coming together to find
solutions to the present challenges,"
Marinho said at a news briefing where he
underscored attitudes like that of the
Brazilian government, which decided to
contribute funds to the International
Monetary Fund (IMF).
The participants in the two-day WEF meeting
are also discussing issues like sustainable
development policies, regional integration
and the fight against drug trafficking,
ahead of the Fifth Summit of the Americas,
to take place Apr. 17-19 in Trinidad and
Tobago. |
