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World Economic Forum On Latin America Opens


Region must break out of the boom-bust cycle, Chile’s Finance Minister says

Santiago de Chile, 25 April 2007 – Latin America must break out from the boom-bust commodity price cycle by finding new sources of growth, productivity and stability, Chilean Finance Minister Andrés Velasco told participants in the opening plenary session of the World Economic Forum on Latin America. “The challenge for us is to grow regardless of the cycles,” he said. The key is innovation, he added. “You cannot achieve greater productivity without innovation. There is no magic recipe. In human capital and education, we must move on from quantity to quality.” The two-day meeting brings together about 400 business, government and civil society leaders from 28 countries. Among the main topics to be discussed: China’s growing trade and investment relationship with the region.

In his address, Velasco noted that Latin America’s share of world trade is now only half what it was six decades ago. It is important for the region to deepen integration. Countries must also focus on adopting innovative and effective social policies that aim to lessen inequalities, he said.

But if the region is to develop new drivers of growth, it must address such problems as crime. “We are the world champions in terms of homicides, gangs, graft and money laundering,” José Miguel Insulza, Secretary-General, Organization of American States (OAS), Washington DC, noted. Peter Hakim, President, Inter-American Dialogue, USA, called for more attention to be paid to education, while Luiz Fernando Furlan, Minister of Development, Industry and Foreign Trade of Brazil (2003-2007), remarked that taxes are a major impediment to growth and productivity. “We have a tax burden which belongs in the first world.”

There are certainly signs that Latin America is changing, said Luis A. Moreno, President, Inter-American Development Bank, Washington DC. He pointed to the growing investment in green energy. “The issue for Latin America is not the diagnosis but rather it is a problem of action and management,” said Furlan. “We know what to do and need to get down to it before we lose momentum.” A major challenge is for policy-makers and voters to think long term, concluded Moisés Naím, Editor-in-Chief, Foreign Policy Magazine, USA. “How can we extend the time horizon for decisions? Everyone has short time horizons.”

The World Economic Forum on Latin America closes tomorrow with Chilean President Michelle Bachelet and her Brazilian counterpart President Luiz Inacio Lula da Silva addressing participants. Supported by ICARE and the G-50 (Group of Fifty), the theme of the gathering is The Power of a Positive Regional Agenda. The meeting Co-Chairs are José C. Grubisich, Chief Executive Officer of Braskem, Brazil; Andronico Luksic Craig, Vice-Chairman of Banco de Chile; and Zhang Shoulian, President of China Minmetals Non-ferrous Metals, People’s Republic of China. The host broadcaster of the meeting is Television Nacional de Chile – TVN.

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