UNCTAD INTERACTIVE SESSIONS EXPLORE LINKS BETWEEN TRADE AND POVERTY, ECONOMIC DEVELOPMENT AND CAPITAL ACCUMULATION

UNCTAD INTERACTIVE SESSIONS EXPLORE LINKS BETWEEN TRADE AND POVERTY,

ECONOMIC DEVELOPMENT AND CAPITAL ACCUMULATION

Foreign Minister of Brazil Elected President of Current Session

(Received from a UN Information Officer.)

SÃO PAULO, 14 June -- As the United Nations Conference on Trade and Development (UNCTAD) continued its eleventh session throughout this afternoon and evening, high-level speakers in the plenary outlined the main objectives of the Conference, as it celebrated its fortieth anniversary this month, and explored the links between trade and poverty, as well as economic development and capital accumulation.

At the opening of the afternoon meeting, the Conference elected, by acclamation, the Foreign Minister of Brazil, Celso Amorim, as its President.  It also elected its 32 vice-presidents, as well as chairmen of the main committees.  François Leger (France) was elected as the Conference's Rapporteur.  In other action, the Conference established its Committee of the Whole.

The mandate and relevance of UNCTAD remained as vital as ever today, said Surakiart Sathirathai, Foreign Minister of Thailand -- the host country of UNCTAD X four years ago.  The UNCTAD could play an important role in modifying globalization for the benefit of all mankind, bridging the gaps and healing the wounds left by the 2003 Cancun Ministerial Meeting of the World Trade Organization (WTO) [at which negotiations broke down over the issue of agricultural subsidies].

The task was to strengthen UNCTAD as a true forum to advance cooperation in trade and development, demonstrate the cohesive force of South-South cooperation, open up more channels of understanding between North and South, and find mutual solutions to address impediments to trade and development, he said.

Rubens Ricupero, Secretary-General of UNCTAD, said that the organization's raison d'être had been formulated in the Final Act adopted at its first session in 1964.  The link and interaction between national efforts and international action were there, as well as what today was called good governance, sound policies and ownership.  That whole statement was permeated by the need for change in the status quo -- not any change, but "constructive, rational action".

"We are too aware of the anxiety and suffering caused by footloose capital, deindustrialization, delocalization of jobs and industries and recent outsourcing of services, to ignore it", he added.  Such action should not be neutral in terms of values, but aim instead at creating more equity.  That was the moral commitment that had always been the force and inspiration of UNCTAD, a voice for the weak, the poorest among the poor and the disadvantaged.

Mr. Ricupero was also among the speakers who stressed the critical importance of successful trade negotiations under way in multilateral forums.  For his part, Supachai Panitchpakdi, Director General of WTO, urged the ministers to "seize this moment" to boost global efforts to successfully complete negotiations on the 2001 Doha, Qatar Development Agenda -- the first agreement focused solely on trade and development in developing countries.  "If we want trade to work for growth and development, we must succeed on the agreements made at Doha", he stressed.  That was critical to ensuring that the multilateral trading system worked for the benefit of all people.

UNCTAD's last session had restored a semblance of order in the "dark days" that followed the WTO's 1999 ministerial meeting in Seattle, Washington, he said.  It had also built momentum towards putting the Doha round back on track.  It was important for all nations to stay committed to those negotiations.  By the end of July, governments needed to focus on securing a framework package for agriculture, non-agricultural market access, development and other matters.  Anything that distracted negotiators from that goal could have severely adverse consequences, particularly for developing countries.  Without movement on those issues, there would be no movement at all in the years to come.

Following his election, Mr. Amorim highlighted partnerships for development, equity in the marketplace, poverty eradication and market strategies among the thematic issues that needed to be discussed.  While UNCTAD's work should focus on ensuring equitable trade participation of developing countries, its activities should not be seen as a substitute for responsibility on the part of each government.  Nevertheless, the Conference served an important role in fostering debate and promoting consensus on trade and market-related issues so that all nations could face the challenges of development.

Participants of the round table that followed the opening statements focused on linkages between trade and poverty from the point of view of a developmental perspective.  Speakers in the interactive debate shared lessons that could be learned from their national and regional experiences and pondered the means of making progress in the future.  The event provided a forum for policy makers and representatives of academia, international organizations and civil society to debate the issues.

Representatives of several countries agreed with the Minister for International Development of Norway, who moderated the event, that a global agenda of reform was needed to combat poverty, which needed to be addressed on several fronts simultaneously.  Among the needs, she listed broader market access, reforms in international development assistance and international policies, and better governance.

It was pointed out that access to international markets was essential for sustainable development.  The role of trade in poverty eradication was generally interpreted as a positive one, but many complementary policies were required to achieve progress.  National efforts could not be successful without sufficient support from the international community.  Also stressed in the debate was the need to ensure economic financial justice, particularly for the least developed countries, and the critical role of capacity-building.

Delegations and leading international experts who participated in the development strategies session this evening, addressed the relationship between economic development and capital accumulation, considering both recent experience and policy implications of action at national, international and regional levels.  Speakers focused on the causes for the developing countries' diverging growth performance, especially with regard to domestic capital formation, productivity growth and structural change.  They also discussed the ingredients of effective development strategies, taking into account the interdependence between trade, finance, investment and macroeconomic conditions.

Opening Statements and Elections

Speaking on behalf of the President of the tenth session, SURAKIART SATHIRATHAI, Foreign Minister of Thailand, recalled that four years ago, his country had hosted the first international conference of the millennium, UNCTAD X.  The Bangkok Declaration and its Plan of Action remained relevant today, but much had changed in the past four years.  New security threats, transboundary problems and epidemics with global implications had emerged, undermining international efforts in advancing sustainable development.  Paradoxically, even as it was making the world more alike, globalization seemed to be also bringing out differences and widening gaps among and within countries.  The risk of marginalization, always a danger for the least developed economies, seemed to have become more acute.

To its credit, the international community had risen to the challenge, he continued.  International partnerships, forged at such key global conferences as those on Financing for Development in Monterrey and on Sustainable Development in Johannesburg, had raised the expectations for realizing the Millennium Development Goals.  Now, it was necessary to build upon the diversity of UNCTAD membership and make it the Conference's strength.

As UNCTAD celebrated its fortieth anniversary, its continuing mandate and relevance remained as vital as ever, he said.  The Sao Paulo Conference had chosen a timely and relevant theme of enhancing coherence among the various levels to tackle the complex challenges before the world.  The UNCTAD was important in making globalization of utmost benefit to all mankind, bridging the gaps and healing the wounds left open by the Cancun meeting of the Doha round.  The task was to strengthen UNCTAD as a true forum to move forward cooperation in trade and development, demonstrate the cohesive force of South-South cooperation, open up more channels of understanding between North and South, and find mutual solutions to address impediments to trade and development.

Each country must choose wisely to implement policies, taking into account its own development goals and constraints, while taking care to maintain coherence with the interests of the international community.  There was no "one-size-fits-all" approach to development.  How well each country manages globalization would determine whether global poverty could be alleviated and the Millennium Development Goals achieved.  As a body within the United Nations system, UNCTAD would need to adapt to global developments.

Following that statement, he proposed that Celso Amorim, Minister of External Relations of Brazil, be elected as President of the Conference.

Following his election by acclamation, Mr. AMORIM said he was honoured to have been named President of the Conference, and added that Brazil was equally honoured to host the week-long meeting.  He highlighted the importance of the debates that would focus on the Conference's main theme:  "Enhancing coherence between national development strategies and global economic processes towards economic growth and development, particularly of developing countries".

He also highlighted the other thematic issues that would be discussed, including, partnerships for development, ensuring economic development, equity in the marketplace, poverty eradication and market strategies.  He said that while UNCTAD's work should focus on ensuring the equitable trade participation of developing countries, its activities should not be seen as a substitute for responsibility on the part of each government.  Nevertheless, UNCTAD served an important role in fostering debate and promoting consensus on trade and market-related issues so that all nations could face the challenges of development.

He then called on the participants to elect the Conference's 35-member Bureau.  The Conference then elected its 32 vice-presidents and established a sessional Committee of the Whole.  It also elected the Committee's Chairman and the Rapporteur of the Conference, François Leger of France.  It then appointed a nine-member Credentials Committee and adopted its provisional agenda.

The Secretary-General of UNCTAD, RUBENS RICUPERO, outlined the world situation at the time of the creation of the Conference 40 years ago, adding that everything that constituted, to this day, the raison d'être of UNCTAD had been present in the Final Act of UNCTAD I adopted in 1964.  The indissoluble link, the dynamic interaction between national efforts and international action were there, as well as what today was called good governance, sound policies and ownership.  The whole statement was permeated by the need for change in the status quo -- not any change, not the change brought about by what the Chairman of the United States Federal Reserve Board, Alan Greenspan, called the "irrational exuberance" of market forces at the worst moments -- but "constructive, rational action".

Such action should not be neutral in terms of values, but aim instead at creating more equity, he continued.  That was the moral commitment that had always been the force and inspiration of UNCTAD, a voice for the weak, the poorest among the poor and the disadvantaged.  Perhaps, the only aspect of that text that sounded somewhat dated was the reference to a "modified division of labour", not because it did not happen, but due to the fact that it had indeed arrived with such overwhelming and systemic power of transformation that was now called "globalization", unification of markets on a planetary scale.  It had been accompanied, as foreseen, by "adjustments", often of a painful character, in world production and trade.  "We are too aware of the anxiety and suffering caused by footloose capital, deindustrialization, delocalization of jobs and industries, recent outsourcing of services, to ignore it", he said.

At the same time, who could deny that "the resulting increase in productivity and purchasing power of the developing countries will contribute to the economic growth of the industrialized countries, as well, and thus become a means to worldwide prosperity?" - he asked.  It was enough to look at what had been happening as a result of the development of China, India, other countries in Asia, how they had contributed to the enormous growth of intra-Asian trade, to the relative autonomy of a region that could now rely on its own internal dynamics, but equally made a positive contribution to a resumption of economic growth of Japan and recovery of the United States.  On the other hand, how could one ignore that world prosperity would not be possible without the tremendous import propensity of the American economy and its gigantic trade deficit (what he had once described as "that huge black hole that sucks and digests all the available exports in the world"), as well as the symbiotic relationship between Asian exports and the US trade deficit and the purchase by Asia of dollars and Treasury bonds to help finance the deficit.

Obviously, the road to development through exports existed, but it was difficult, he said.  The door was too narrow, and the goal should be to broaden it to help the majority of countries leave the second category and reinforce the category that could finance development through sustainable export and import.  That was the issue of coherence, mutual reinforcement of national strategies and global projects.  Much, of course, could be said about coherence, and many aspects were related to it.  One part of the global process, however, was trade. While the world had recently witnessed several bad years, when trade had contracted, last year, it had grown by some 4.7 per cent.  According to the latest indicators, world trade was expected to continue growing at a significant rate in the coming months and years.  Under normal circumstances, that should facilitate the world trade negotiations. 

Liberalization of trade was not just a matter of quotas, subsidies and tariffs, he added.  One could not be simplistic in an approach to such issues as they involved not only political, but also personal aspects, including the fate of small family farmers.  Much was at stake with the success of trade negotiations.  Victory there would put development at the center of attention.  Among other needs, he also listed increased South-South trade and cooperation and the need to provide more benefits to the Least Developed Countries.  One also should not lose sight of the supply constrains.  Among all the different aspects of coherence, it was necessary to remember the need to build a link between trade negotiations and the efforts to build supply capabilities. 

SUPACHAI PANITCHPAKDI, Director General of the World Trade Organization (WTO), who chaired UNCTAD X in Bangkok four years ago, said the current Conference was special not only because it was the organization's fortieth anniversary, but because it also came at critical time in the 2001 Doha, Qatar Development Agenda on global trade negotiations, the first meeting to focus solely on trade and development. The last session of UNCTAD had brought back some semblance of order following the "dark days" that followed the WTO's 1999 ministerial meeting in Seattle, Washington.  It had also built momentum towards putting the Doha round back on track.  It was important for all nations to stay focused on and committed to those negotiations, he said.

By the end of July, governments needed to focus on securing a framework package for agriculture, non-agricultural market access, development issues and other matters.  Anything that distracted negotiators from that goal, he said, could have severely adverse consequences, particularly for developing countries.  It was clear that without movement on those issues, there would be no movement at all in the years to come.  "We no longer have the luxury of time.  If we want trade to work for growth and development, we must succeed on the agreements made at Doha."  That was critical to ensuring that the multilateral trading system worked for the benefit of all people.

"Failure to reach agreement in July on a framework for agriculture and industrial products, and an accord which better defines how we address the issues of cotton subsidies and trade facilitation, would mean a highly uncertain future for these negotiations.  We would then have very little to show for three years of intensive effort", the Director General said, adding that the evolving global political landscape meant there were no guarantees that newly appointed ministers would be as committed to the objectives set by their predecessors three years ago in Doha.

For developing countries, the failure to secure a framework agreement might also mean the unravelling of commitments made by industrial countries to eliminate agriculture export subsidies and other subsidized forms of export competition.  UNCTAD XI could play a wider role to make the July package a reality.  He hoped the conference would "seize the moment and deliver a clear and unequivocal message on the need to complete the Doha round".

He had witnessed a new level of commitment at recent important ministerial gatherings worldwide, including last week's "Group of 8" meeting held at Sea Island, Georgia, in the United Sates.  It was critical now to ensure that this renewed commitment was translated into concrete action.  "The time for fixed positions is over", he said, stressing that what was needed was innovative ideas and creative problem solving.  By example, he said that the European Union had recently proposed to eliminate all forms of export subsidies.  "Can you believe it?" he asked, adding that had indeed been a ground-breaking offer in an area that had been controversial for many years.

For those that had concerns about the July package, he said that it would include only framework level agreements that did not require all details to be spelled out specifically.  "We should resist the temptation to predetermine the outcome", he warned, urging governments to show restraint and exercise good faith.  He appealed to all countries -- developed and developing -- to work towards that end.

While admitting that the WTO was not perfect, and the multilateral trading system left room for improvement, he said it was unrealistic to suggest that there was an alternative to the WTO, for there was no alternative to its methods of improving market access or ensuring a legal certainty of a global rules-based trading environment.  WTO policies had made the multilateral trade environment more predictable and helped level the playing field, he said, adding that forward progress on some delicate issues concerning agriculture and anti-dumping could only be achieved through a round of WTO negotiations.

He said the international community was "on the verge of making history" by pushing through fundamental changes based on the Doha round.  It was not the time to falter in the commitments made there.  He had travelled the world since the last UNCTAD meeting, visiting in particular the smallest and most vulnerable nations.  All those he had met had told him that they wanted the Doha Development Agenda to succeed, as it was the best way to unlock the trade potential of their countries.  To avoid failure, every minister at UNCTAD, as well as the WTO, must pull in the same direction.

High-Level Round Table:  The Developmental Perspective on the Relationship between Trade and Poverty

The event was moderated by HILDE F. JOHNSON, Minister for International Development of Norway, who said everybody agreed on the pledge to reach the Millennium Development Goals by 2015.  A global agenda of reform was needed to combat poverty, which needed to be addressed on several fronts simultaneously.  Among the needs, she listed broader market access, reforms in international development assistance and international policies, better governance, and the way the international community worked with the private sector.

One of the most important challenges was not only to move ahead with international trade negotiations, but also to make trade work for the poorest, she added.  Efforts to alleviate poverty could not be successful if least developed countries were left out of the world trade system.  Those countries' share of foreign direct investment was about 1 per cent, and their share in international trade amounted to some 0.6 per cent.  There was an undeniable link between trade, economic growth and poverty reduction.

Panellists included Meli Mpho Malie, Lesotho's Minister for Industry, Trade and Marketing; Cham Prasidh, Minister of Commerce of Cambodia; and Patrus Ananias, State Secretary for Social Development and the Family Stipend in Brazil.  The lead speakers in "The Way Forward" segment were the Minister for Foreign Trade and Development of Finland, Paula Lehtomaki; Ireland's Minister of State, Tom Kitt; Commissioner for Development of the European Commission, Poul Nielson; Abdul Hafeez Shaikh, Federal Minister for Investment and Privatization of Pakistan; Gobind Nankani, Vice-President of the Poverty Reduction and Economic Management Network in the World Bank; Hafiz Pasha, Assistant Secretary-General and Director of Regional Bureau for the Asia-Pacific of the United Nations Development Programme (UNDP); Denis Belisle, Executive Director of the International Trade Centre; and Saadin Makhlouf, Secretary of State and Minister of Trade of Tunisia.

Mr. MALIE (Lesotho) presented his country's approach to poverty reduction and touched upon its efforts to reconcile long-term development goals with short-term liberalization efforts.  Lesotho was one of the least developed countries, which saw access to world markets as key to economic development success.  One of the fundamental challenges before the international community was to ensure that potential gains from globalization could be shared by all.  Crucial in today's world were the issues of quality, standards and accreditation.  Developing countries were in direct need of support and assistance, and while Lesotho had undertaken significant efforts to alleviate poverty, promote trade and achieve development, its efforts alone were not sufficient.

Mr. PRASIDH (Cambodia) also shared his country's experiences, saying that developing countries needed to be practical -- they could not ask from developed countries more than they could deliver.  Official development assistance (ODA) alone could not change the situation.  Also required were sustainable development efforts at the national level.  Trade could substitute for ODA, helping the least developed countries to achieve their goals.  It should be used as an important component of the national development strategies.  Among the important components of poverty-reduction strategies, he emphasized the significance of South-South trade and cooperation, increased investment in the domestic policies that encouraged the development of domestic productive systems, export reorientation and trade-centred approaches to development. 

The country intended to diversify its exports to improve its access to markets, he continued.  Once its supply capacity was better developed, it could take greater part in the South-South trade, particularly in its own region.  To carve its share of the world market, Cambodia was also taking steps to foster the increased participation of civil society and the private sector, and lobbying to receive preferential access to several developed countries' markets.

Mr. ANANIAS (Brazil) focused on the issues of poverty and briefly outlined the main social policies implemented in his country at present.  Social inequalities still persisted in Latin America and the Caribbean.  Some 102 million indigent people in the area could hardly even feed their families.  The challenges of hunger, malnutrition, poverty and social exclusion still persisted.  While his country's social indicators had improved since the 1930s, it still had not achieved social equity.  His Government's efforts included consumer market development, attention to people's rights and measures to alleviate hunger.  Some of Brazil's social welfare policies were directly targeting the poor and the aged.   Measures were being taken to stop exploitation of children and support needy families.  The Government was also supporting rural producers and implementing policies to provide family grants. 

When the floor was opened for debate on the way forward, Ms. LEHTOMAKI (Finland) said the search for answers should not only focus on trade negotiations and market access.  All trading nations should promote good governance, the realization of human rights and the equitable redistribution of wealth.

Mr. KITT (Ireland) said it was extremely important for nations to admit that issues that had once been thought controversial or difficult could indeed be addressed or even seen as a benefit.  He was among the many speakers who believed the "everything but arms initiative" was an important step forward.  He stressed that developing countries were already in the world economy, but existed in a sort of post-colonial limbo.  That situation needed to be changed, and the call should not necessarily be to integrate them into the economy but to help change and improve their positions.

As delegations took the floor to highlight their national experiences and offer suggestions, several speakers stressed the need to ensure economic financial justice, particularly for the least developed countries.  One suggested the creation of an international humanitarian fund to provide swift support to poor countries in their efforts to alleviate crippling poverty.  Another said that capacity-building was critical, because only by enhancing human resources, as well as the technologies that produced goods and services, could developing countries produce and export products that other countries needed.  Also addressed was the role of subsidies, credit and distribution of income programmes.

Complementary policies were highlighted as a way to ensure that pro-poor trade reforms actually produced a response and reduced vulnerabilities faced by poor traders.  Many of the speakers stressed that access to markets was key to overcoming underdevelopment.  With the current level of subsidies, one participant warned, it was virtually impossible for most poor countries to improve their circumstances.  While one speaker said that reform undertaken by devoted governments, particularly in the area of business, was the best way to ensure positive growth, another urged that a focus on employment creation, particularly in the rural sector, was critical.

Summing up the discussion, EVELINE HERFKINS, United Nations Executive Coordinator for the Millennium Goals, reminded the Conference that world leaders had agreed that poor countries bore the responsibility for ensuring their development while, at the same time, agreeing that those countries could not do it themselves.  The focus should remain on "aid, trade and debt relief".  It was, nevertheless, clear that developing countries needed to invest massively in their supply side capacity and infrastructure enhancement, as well as in improvement in human resources.

Mr. RICUPERO stressed that trade was not enough.  Among other things, he said it was necessary to ensure that when significant trade agreements emerged that could increase poverty, the major international financing institutions preceded those agreements or policies with social impact studies.  He urged the Conference to work for practical laws and policies focused on such issues as financing for retraining, and providing health insurance.

Development Strategies Session: Economic Development and Capital Accumulation -- Recent Experience and Policy Implications

In his opening remarks, Mr. RICUPERO reminded the delegates that even before the Conference had started, a discussion on alternative economic strategies for Latin America had addressed the subject of today's discussion.  One of the main limitations for sustainable growth in that region came from the fact that in recent years, capital accumulation had been declining in most countries of the region.  Did the participants believe that changes in interest rates could foster an improvement in the cost of investment and capital accumulation?  Would macroeconomic changes alone deal with the problem?

The event was moderated by Enrique Iglesias, Chairman of the Board of Governors, Inter-American Development Bank.

The stage for discussion was set by the panellists:  Guido Mantega, Minister of Planning, Brazil;Antonio Ocampo, Under-Secretary-General, United Nations Department of Economic and Social Affairs; Deepak Nayyar, Vice-Chancellor, University of Delhi; Yilmaz Akyüz, former Director, UNCTAD, Division on Globalization and Development Strategies; and Martin Khor, Director, Third World Network, Kuala Lumpur.

Mr. AKYUZ, former UNCTAD Director, said that some of the key structural and institutional features of Latin America were not shared by other regions, particularly in East Asia.  Those included low savings and investment, chronic deficits, excessive public debts, dependence on outside investment and a history of high inflation and economic instability.  So it was clear that experiences and solutions in economic development and capital accumulation were often very different.

He went on to detail the striking contrasts between Latin America and East Asia in the area of distribution of finances and investment practices.  High and variable inflation had upset key variables in Latin America's investment markets, and although Asia had been affected by financial swings during the 1990s, the nature and effect had been fundamentally different.  In East Asia, it had been the outcome of misguided liberalization.  Noting other performance divergences between the two regions, he said no single policy could point the way forward.  Developing countries must find the best policies that suited their conditions and make them work.

Mr. NAYYAR (University of Delhi) said markets and globalization had led to divergence rather than convergence in levels of income and development.  It had been particularly difficult for "late comers" to pursue national development objectives because there was very little space left to ensure development, and the rules of the game were being set by multilateral institutions.  Rules for borrowers, but not for lenders and exchange rates, could no longer be used as a strategic instrument to integrate countries into international markets.

He said that late comers to development needed to effectively use what space was available, to create space by reshaping rules and recasting the process of globalization.  It was necessary to make existing rules fair and more transparent.  There was also a need to recognize that fair rules might not be enough -- indeed, uniform rules for unequal partners would only produce inequitable results.  He added that the rise of economies in the East Asian region had been wrongly accredited to reforms, openness and integration, when it was much more about the development of positive and forward-thinking national strategies.  The size of India and China, he said, made those countries better able to negotiate, given the unfair rules of the game and the spread of globalization.

Mr. KHOR, Third World Network, agreed with the other speakers that development required the right policies, which should not be constrained by international rules and disciplines.  The emerging view now was that many developing countries had been denied the policy space that they required for liberalization and short-term economic policies because of international rules, conditionalities for loans and agreements with the WTO.  The imports of many poor countries had fallen as a result of reduced tariffs.  In many cases, expanded commodity production had led to a reduction in prices.  For the majority of developing countries, structural adjustments had worsened the debt situation.  When a country fell into debt, interest rates were raised; there was depreciation; and the economy contracted even further.  If allowed to take on alternative policies, the countries could get out of crisis.  For his own country, Malaysia, the adoption of such policies as reduction of interest rates, introduction of selective capital controls to prevent the money from flowing out, and fixing the exchange rates had led to positive results. 

Mr. OCAMPO, UN Department of Economic and Social Affairs, highlighted the connections between UNCTAD and the Economic Commission for Latin America and the Caribbean (ECLAC) and presented a historical perspective on the development of Latin American countries.  Among the main trends in the region, he mentioned market volatility and the prevalence of cyclical policy patterns.  National policies should lead the way out of the vicious circle of poverty and under-development.  However, there were examples when efforts to improve exports and introduce social inclusion policies had not led to an overall improvement in the economic situation. 

Mr. MANTEGA (Brazil) said that Latin American economies had shown great dynamism in the early part of the twentieth century, with many countries adopting processes to open up their economies for trade.  But the last 20 years of the century, poverty had begun to creep up along with unemployment, and economies had begun to destabilize.  There were currently over 16 million unemployed Latin Americans in urban areas alone.  Despite fiscal adjustment policies and privatization efforts, public deficits had increased along with lack of growth and depletion of infrastructure.

Latin American countries were now challenged to reduce their foreign dependencies and indebtedness, he continued.  Another important challenge was to ensure income redistribution to counter the economic growth shifts over the past few years.  Latin America must seek to stimulate its own growth and stimulate trade flows within its region, namely, through promoting South-South cooperation.  The region also must fight anti-dumping measures, adopt innovate financial mechanisms, balance local budgets and invest in infrastructure and new communication technologies.  There must be active policies that went beyond fiscal budget issues and were related to development and enhancement of economic structures.

When the floor was opened for an abbreviated debate, speakers highlighted their national and regional experiences overcoming financial and economic crises, by reversing serious financial outflows and promoting export and investment.  One speaker suggested, however, that some countries had not been so successful at accumulating capital and reversing negative economic trends.  Those countries found it necessary to, among other things, restructure the relationship between large corporations and multinational companies with small- and medium-sized local enterprises.  Some had also been forced to be more creative in developing microeconomic income generating strategies.

A speaker said that reciprocal agreements and arrangements should help developing countries integrate into the international market place.  The ultimate objective should be to ensure that all countries participated in the global trade market on the basis of shared interests, not special interests.

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