At the beginning of the year, the Corporation’s agenda was said to be regional, aimed at sustainable development. Are the goals set for 2001 being fulfilled?

Absolutely. I believe the two pillars of the agenda, namely sustainable development and regional integration, are being fulfilled.

When we speak of sustainable development, we do not only refer to the environment but also to the balance that should exist among five factors: first, the need for macroeconomic stability; second, a microeconomic balance, which is the efficiency to create sustainable growth conditions amidst competitiveness to join the region within the framework of globalization; third, equitable distribution, that is growth benefiting most countries in the region; fourth, institutional governance balance ensuring institutions and democracy in the new entrepreneurial culture, and fifth, environmental balance.

All our activities, including financing infrastructure projects, aiding the small enterprise, fostering the financial sector, seek to fulfill these goals. And after joining in all the mentioned countries, the CAF became a major leader in the matter.

Enrique García Rodríguez along with Foreign Affairs Minister Giavarini and Economy Deputy
Minister Daniel Marx, during Argentina’s signing into the CAF 

Within the framework of regional integration, in what way have the Argentine crisis and the Mexican economic recession affected the Andean Community?

I would say year 2001 has been hard for the world in general and the exogenous causes toward Latin America are crucial. The US economic downturn, a similar situation in Europe and the ‘almost endless’ recession hitting Japan have had a strong impact. Of course, the Argentine turmoil in particular has undermined international markets’ trust. The negative consequences for Latin America this year will be a considerably lower-than-expected growth from the estimated 3% to a petty 1.5%.

Ironically, Andean countries seem to have suffered less. Two countries will report positive growth rates this year –Venezuela and Ecuador- highly protected by oil. Colombia will also have positive growth, low but positive while Bolivia and Peru will report marginally positive rates. But I would say the problem is widespread and relates to a competitiveness failure on the part of Latin America.

Assessing the major political problems of the region, which ones would you point to?

The major political problem is the lack of trust from the people in the political class. This is due to the lack of results in social improvement and also distrust in the ‘clientelism’ emerged in several countries.

However, in my view, the pillars for a strong democracy are and will be political parties. I believe the CAF is contributing to the consolidation of governance, institutions and political parties.

Moving on to Bolivia, how would you describe the current political scenario after President Jorge Quiroga was sworn in early this month?

I think President Quiroga has renewed the country’s air also contaminated like the rest nations by the worldwide recession. The 41 year old president is part of a new modern breed of politicians and has created great expectations. In the three weeks he has been in power, he has managed to consolidate important alliances for the country to weather the crisis.

Aware that the Quiroga’s term in power is still short and that he has not had enough time to solve social conflicts yet. What are the social emergencies government should address right now?

I think he has taken important steps. The first was to sit all political parties at the table to reach a political truce allowing them to be part of a supportive plan to help government solve the crisis questions. The second delicate issue has been reaching an agreement with the farming sector. So I think we should not expect a year to do wonders because problems are not easy to solve neither in Bolivia nor in any other country. In my view, conditions have been created for the country to overcome this transition successfully and gain strength from the democratic scheme.

‘During the three weeks in office, Quiroga has managed to consolidate major alliances
for the country this year to overcome the crisis’

You were just saying that Bolivia is expected to experience a positive though marginal growth. How does this translate into the economic stage?

Of course, this has been a hard year for Bolivia as well as the rest of the countries. Growth is expected to reach 1% as the major productive sectors have been hit , mainly the small and middle enterprise. Bolivia also made a great effort to eradicate coca crops, a praiseworthy measure as excess coca was eliminated in three years. The world economic impact has been huge of around 10% of the GDP.

However, thanks to a sweeping privatization process in previous years, Bolivia has discovered incredible gas reserves that place the country as the second major gas producer, which will allow it to more than double its exports not only to Brazil but also become a South American heaven. The country is even considering to launch gas exports to the United States and Mexico.

Trade relations with Brazil have strengthened after the power crisis that hit Brazilians. This situation seems to get Bolivia closer to the Mercosur than the CAN…

As chairman of a multilateral organization I must be objective here. Bolivia is playing its card correctly. It is located in the center of South America and so it is naturally Andean. But it is also closely linked to the Río de la Plata and so this connection between the two schemes is crucial. By being CAN full member, Bolivia is at the same time a Mercosur associate member.

I would say the future of the region lies on the definite convergence between the two South American schemes. This is one of the goals from the CAF I am trying to foster through many channels.

What is the current CAF stance in view of the FTAA?

We view the FTAA as an important trade integration scheme. It is a major market that opens in the United States and Canada and a chance we should not miss. However, we must be cautious in this sense: South American countries in particular, are essentially raw-material producers and exporters with a low level of competitiveness and unless they step up efforts to become economies based on natural resources, knowledge, technology, innovation and competitiveness, the FTAA entry will prove unsuccessful. I think the region is in compromise and working toward these goals. Globalization places us in a clear situation, those who are not successful and competitive will find it hard to keep pace and eventually lag behind.

It is important to consider that while the FTAA fundamental, we should never overlook the importance of the South American integration schemes, which are much more complete. In other words, the FTAA is a trade integration scheme, the Mercosur and Andean Community are integration schemes that include a customs union, including a potential monetary union, political integration and other aspects that are not considered in the FTAA.

*Conducted during the XII Annual Plenary Session of the CEAL in Buenos Aires, from August 29 to 31, 2001