Monday, April 2, 2007
By
Lord Triesman
·
A speech by Lord Triesman,
the United Kingdom’s Foreign Office Minister with responsibility for relations with Latin America, given to the House
of Common, in London, on March 28.
·
A Foreign and Commonwealth
Office Latin America strategy paper.
Speaker: Lord
Triesman
Ladies
and Gentlemen,
It
gives me great pleasure to launch our public strategy paper on Latin America. During my time as Minister responsible for this
region, I have been struck by how central Latin America is to British interests. I have seen how much it has changed over
the last twenty years. And this study helped me to grasp the extent of current UK engagement in Latin America.
I commissioned
this paper specifically to present these findings to a wider audience and set out our strategic relationship with Latin America.
And for the government it serves another purpose. It shows Latin America is moving up our agenda as I promised it would.
Many
here today helped in the preparation of the paper. Together we tested propositions and challenged conventional thinking on
the UK's relationship with the region. Of course, the final responsibility is mine.
I owe
a great deal of gratitude to a number of people here. First, Bob Blizzard, not just for hosting this event today, but for
his long-standing support to the relationship between the UK and Latin America. Also to our co-host, David Thomas of Canning
House. And finally, a warm welcome to all the Chevening and former Chevening students in the audience. More than anyone else,
you represent the Latin America of 2020.
I am
sure that Bob, like me, appreciates that our approach to Latin America needed to change. In the 70s and 80s, we saw Latin
America as a continent where democracy was endangered, human rights massively abused, and economies appeared in a state of
terminal decline.
What
a different reality today. Our relationship with Latin America has changed because Latin America has changed. All Latin American
states, except Cuba, are democracies. This gives the UK new opportunities in the region. New opportunities to assist democratic
reforms. New opportunities to create new partnerships on global issues.
Our
work in Latin America does much to support these two areas. Our Embassies encourage and assist reform across the continent.
Now I want us to develop stronger partnerships on global issues -climate change, poverty reduction, the fight against crime.
Today,
I want to set out what the Latin America of 2020 might look like and how we can work with it to tackle these global challenges.
Since
I became Minister, I realised that South America is at a crossroads. It has made remarkable progress over the last few years.
Now it has a choice: either to capitalise on these achievements or to see its success outstripped by more successful global
regions.
I believe
there are four realistic scenarios for Latin America in 2020:
First,
a secure, prosperous continent working in partnership with the UK on global issues;
Second,
a continent where democratic progress stalls, replaced by a new form of caudillo;
Third,
a continent unable to compete with either Asia in the manufacturing sector or Europe and the US on services, leaving it dependent
on its raw materials;
Fourth,
a continent with a dividing line between prosperous and economically under performing states - with all the political instability
that entails.
Of
the four, I believe the first scenario can be realised. I say this not because I am an optimist. But because I have confidence
in the people of Latin America. I have confidence in the democratic system, which allows them to chose, and hold to account,
a new generation of leader. And I am certain of the commitment of the United Kingdom in support the process of reform. Our
stance, then, over this strategic period is to place the UK in partnership for security and prosperity.
I hope
that by 2020, we will not deal with problems within Latin America. Instead, we will work with Latin America on our shared
global agenda. The first signs of this relationship are already visible. We work with Brazil on poverty and AIDs projects
in Africa. Many Latin American states, particularly Uruguay, are our partners in UN peacekeeping missions across the globe.
Because
of the democratic changes in Latin America in the last few years, we now have opportunities for joint work to fight poverty
and social inequality, on judicial reform, and on the fight against corruption and crime. Quite frankly, a few years ago,
it would have been a waste of time and money. We now have programmes with the judicial authorities in Mexico, with prison
authorities in Argentina, Brazil, Chile, Uruguay and Venezuela.
The
continent is on track to meet the UN's Millennium Development targets for education, access to water and sanitation and reducing
hunger. Chile's poverty rate halved between 1990 and 2004. I am heartened by similar trends in Mexico and Brazil.
But
we are also aware of the shortfalls compared with much of the world. Educational attainment is low compared with Asia. The
results are worrying. Economic activity based on high skills is not possible without an end-to-end education system culminating
in higher education. That is what makes export composition more varied and an economy less dependant on primary commodities
and fluctuating commodity prices.
Of
course, good education has to lead to good jobs. Taken together that gives a major competitive edge to China, India, Asia.
Their education drive is intense. It leads to jobs in higher technology as well as low cost manufacture in which there is
high volume, contemporary investment. Their capital stock per worker is high and compared with Latin America, paying high
dividends.
I set
out this point about education because it informs my view. Structurally education improves only in economies capable of fiscal
restructuring. Tax regimes have to be both efficient and non-regressive. A dependency culture in social security has to move
to use of state revenues to generate opportunity and incentive. And this model is not neo-liberal. It is no more nor less
than modern mixed economy theory. Keynes would recognise it far more rapidly than Milton Freedman.
I urge
the governments of Latin America to remain dedicated to the cause of reform. Free and fair elections, current account surpluses
are all to the good. But are they sufficient to lift South American countries out of the table of poor performers and propel
them into competitive, dynamic global players? I would argue that more must be done. We cannot be complacent about where Latin
America might be in 2020.
I have
mentioned the economy. This, more than anything, will lift Latin America from developing to developed world. Yes, the investment
environment has improved, but is still outperformed by the emerging economies in Asia.
We
have a number of representatives of UK companies here today. I speak for many of them when I say that Foreign Direct Investment
is still deterred by inadequate legal protection, corruption, poor education and over regulation. In Brazil, a relatively
strong economic performer, it takes one hundred and fifty two days to register a new company.
The
financial crises of the 1980s are, I hope, firmly in the past. Inflation is broadly under control. Long-term current account
deficits have been replaced, in the last four years with a surplus. Growth, at 4%, is steady.
But
it is still below average for the developing world and questions about the region's competitivity remain valid. This will
remain the case until the continent overcomes its dependence on raw materials and looks hard at how it can develop a climate
to encourage inwards investment and entrepreneurial activity.
I think
there are lessons to be learnt from Mexico. Since the tequila crisis of 1994 it has worked hard to bring its public finances
under control. As a result, inflation in 2005 was lower than that of the US and it has now begun issuing 30-year fixed rate
bonds. Mexico is proof that, to be globally competitive, good results are not enough. They have to be excellent.
UK
businesses and investors believe that there are opportunities in Latin America. But too often, returns are higher and risk
is lower in Asia. I urge the governments of Latin America to take urgent steps to improve their judiciaries, to reduce crime,
corruption and violence and develop a more highly skilled workforce. This would attract not just foreign business but also
domestic votes.
And
it would help address a fundamental problem - that Latin America still has the highest level of social inequality in the world.
This, more than any other factor, threatens Latin America's new found democracy.
The
emerging democracy across Latin America offers the possibility of a successful regional partnership. The failure of the Free
Trade Agreement of the Americas was a missed opportunity to share prosperity across the continent.
I am
not going to preach to Latin Americans that they should follow this or that route to regional integration. But I find it extraordinary
that trade within South America is less significant than its external trade. Today over half of British trade is within the
EU. In the 10 years between 1992 and 2002, the Single Market generated nearly nine hundred billion euro in extra prosperity
for Europe - a continent about the size of Latin America.
Better
regional co-ordination would help face the global challenge from climate change. The world needs Latin America to contain
the risks presented by climate change. The Amazon region, spreading across four Latin American countries, is the world's largest
carbon sink.
Some
countries, like Brazil, acknowledge they face problems as large emitters of greenhouse gases, particularly through deforestation
and forest fires. But Brazil is also a world leader in clean biofuel technology - so could offer a fine way out of carbon
dependence.
We
believe there is no trade off between economic growth and tackling climate change. Latin American states, like all nations,
feel the effects of climate change. Indeed, global warming will hit the poorest states first and hardest.
We
do not expect the countries of Latin America to shoulder an unfair burden while the developed world does nothing. We have
a shared responsibility on climate change. For this reason, we are developing a separate strategy and will keep up the high
level contacts on this subject. It will be on the agenda throughout this strategic period.
Latin
America is equally important to the global fight against the drugs trade. British law enforcement cannot stop the volume of
drugs coming into the UK simply through erecting barriers at our borders. We must develop still more effective partnerships
with Latin American authorities to disrupt the flow at its source. Our primary concern is to reduce the amount of drugs on
British streets. To this end, we have provided computer profiling equipment to the Colombian customs service.
But
we also see the harm that this trade inflicts on local communities in Latin America. It inhibits social development, political
stability and leads to corruption and abuse of human rights. So, also in Colombia, we have funded a project to protect people
displaced by drugs related violence.
International
and regional organisations increasingly form the fabric of our foreign policy. They provide an important venue to tackle issues
which cannot be dealt with unilaterally - issues like climate change, poverty or establishing norms for human rights.
We
also need strong bilateral relationships. Friends who share our own democratic values, who can help us win the arguments in
the wider international community. In the United Nations, we support a permanent seat for Brazil on the Security Council.
I do not forget that all the countries of Latin America have a long tradition of engagement with international organisations.
Uruguay, for example, may be one of the smallest countries in Latin America, but it contributes more personnel to UN peace
keeping missions than any other country in the region.
A strong
dialogue between Europe and Latin America can only benefit us both. Our two continents share so much. Latin America has an
incredibly strong cultural brand across Europe- art, music, dance football. This is a great asset for both continents.
We
are careful to recognise the diversity within this wonderful continent. I understand that our relationship with a country
like Mexico will be different to, say, Chile, with its remarkable political and economic performance, hundreds of miles south.
But, I also believe that, increasingly, the countries of Latin America have a joint responsibility to improve their continent
for all the nationalities it contains.
As
a final thought, I would like to quote something I wrote in the foreword of the strategy paper: current and future opportunities
are simply opportunities. They will be grasped or missed.
We
in Britain believe these opportunities can be grasped. And we stand ready to help. But it is the governments of Latin America
which hold the key to their own success or failure.
Latin
America is not Africa. It does not command a huge slice of our development budget - nor should it. Our network of diplomatic
missions assists democratisation by exchanging knowledge and best practise. We send some of our best diplomats to provide
advice and support to Latin American reform projects.
My
aim is to see less of this work. I would like to see changes in Latin America continue, so that our diplomatic posts devote
less time to support for establishing democracy and more time talking to Latin American ministers, officials and civil society
on international agendas - like climate change and counter terrorism.
This,
more than anything, would be a sign that Latin America has taken the right path, away from the crossroads where it now stands,
to prosperity, security and influence within the international community.
The
UK and Latin America have great historic bonds. Still more, we have a great future. We have set out the strategic direction
and we have renewed our energy. We will be candid with one another. We can afford to be straightforward because we have one
huge advantage. We are old friends.
Foreign and Commonwealth Office, United Kingdom
