XIV Annual CAF Conference

Latin America continues making steady economic gains, although deep engagement with the Obama administration has not materialized as hoped. This “benign neglect” by the United States represents missed opportunities for collaboration on important issues, including energy cooperation, transnational crime networks, immigration, climate change, and trade, according to experts assembled at the annual CAF Conference on the Americas.

Obstacles to faster economic expansion in the region, the persistent problem of inequity, regional integration, and Brazil’s emerging role on the global stage were also underscored during the September 8 and 9 conference, which drew more than 400 people for a wide-ranging discussion on the challenges facing the region.

CAF, the Inter-American Dialogue, and the Organization of American States organize the annual conference in Washington, D.C., as a platform to identify pivotal issues in the region and make related policy recommendations. Among the participants are US and Latin American government officials, international economists, lawmakers, policy analysts, journalists, and corporate and financial leaders. This year’s panelists included two former presidents: Carlos Mesa of Bolivia and Martín Torrijos of Panama.

“Fourteen years ago we started this event,” said CAF President Enrique García. “Its purpose … is to better understand the relationship between the United States and Latin America.”

Indeed, the current U.S relationship with Latin America sparked lively debate during the two days of the gathering.

When Barack Obama moved into the White House, there was optimism about re-engagement with the United States, which had paid little attention to the region during the administrations of Bill Clinton and George W. Bush. That optimism was fueled by Obama’s call for cooperation at the Summit of the Americas in Trinidad and Tobago in 2009.

But the recession, political partisanship, and military actions in Iraq and Afghanistan have monopolized the US government’s attention. In tandem, Latin America has turned its focus away from its northern neighbor, deepening ties with emerging global players, including China and India. Countries within Latin America have also forged more collaborative relationships with one another.

“The US-Latin America relationship is important but not that important,” said García. “I think the emphasis is on China.”

Other participants were not as convinced. “It’s not fair to say the US will disappear as a main actor,” said Luiz Felipe Lampreia, foreign minister of Brazil under President Fernando Henrique Cardoso and now vice president of the Brazilian Center for International Relations (CEBRI). “It won’t be an absolute power, but it will still be a leading figure. It will still play a main role in climate change and push for cooperation in other areas.”

In particular, the United States’ continuing close relationship with Mexico and Central America was noted. Those ties remain strong through trade and, more recently, security initiatives in response to rising crime, violence, and drug trafficking.

In a keynote address that drew a standing-room-only crowd, New Mexico Governor Bill Richardson predicted that the growing number of Hispanics in the United States would help shift US attention back to Latin America. Richardson, the only US governor of Latin American descent, also called for comprehensive immigration reform, characterizing it as a foreign policy issue.

“This is the most important issue that Congress should address in the post-election session,” he said.

Within Latin America, he said more attention must be directed toward neglected populations—indigenous people, Afro-Latin Americans, migrant workers—and people still living in poverty.

Richardson suggested that a new initiative along the lines of President John F. Kennedy’s Alliance for Progress could serve as “an act of hemispheric partnership that seriously addresses the issues.”

During a panel discussion on the evolution of US policy toward Latin America, Arturo Valenzuela, US assistant secretary of state for Western Hemisphere affairs, raised concerns about the source of Latin America’s ongoing economic bounty: commodity exports, many of which are directed at China.

“Countries of the Western Hemisphere are at an important juncture,” he said. “If they don’t go beyond exports of raw materials … toward value-added goods and services, it is going to be difficult as they move into the 21st century.”

Meanwhile, Francisco Sánchez, US undersecretary of commerce for international trade, said Latin America will be an important partner in the White House’s strategy to boost US exports. He also predicted that pending US trade accords with Panama and Colombia would be approved, although he gave no time frame. He added, however, “our relationship on trade has to go beyond free trade agreements.” By way of example, he pointed to an ongoing effort with Mexico to harmonize the exchange system for products and services, and he singled out the US-Brazil Commercial Dialogue as an important forum for fostering trade and investment that encourages innovation.

Panelists also discussed strategies for dealing with arms trafficking and the violence associated with transnational crime networks. Director of the White House Office of National Drug Policy Control Gil Kerlikowske—the man dubbed the US drug czar—said there is a focus on comprehensive prevention-based strategies as well as initiatives to strengthen law enforcement in the region.

He acknowledged that traffickers are creating far-flung networks and said funding such as that provided to Mexico through the Mérida Initiative may be directed to Central America.

A panel on elections and political trends, moderated by Dialogue President Michael Shifter, noted that recent elections in the region have been marked by political continuity. Chile is not likely to see broad swings in economic or social policies under the new administration of President Sebastián Piñera. Likewise, the election of Juan Manuel Santos in Colombia is expected to keep the country on a path close to that of his predecessor, Álvaro Uribe. Brazil’s incumbent Workers Party is projected to retain the presidency in upcoming elections, likely putting a woman in the chief executive’s office for the first time.

Ana María Sanjuan, a scholar at the Universidad Central de Venezuela, said legislative elections in Venezuela could reveal whether the opposition has gained ground, giving indications as to Hugo Chávez’s ability to win yet another presidential election.

In a session focused on economic and social challenges in the decade ahead, panelists discussed whether Latin America’s current performance is sustainable. CAF’s García said the region has a tendency to compare its performance to Latin America of the past when it should compare itself to other areas of the world today.

“We are satisfied and happy when we say Latin America will grow again with an average growth rate of 4 or 5 percent,” García said. “But is that sufficient to be an important player in the world? Is that sufficient to close the gap between rich and poor in a sustainable manner? Is that sufficient to close the competitiveness gap with other parts of the world?”

Economist Santiago Levy, vice president for sector and knowledge at the Inter-American Development Bank, said the region no longer worries so much about inflation, short-term economic solutions, or fiscal accounts. Rather, the focus is on medium-term growth and sustainability. Levy identified three key challenges: Latin Americans’ failure to save enough, the need for greater productivity growth, and too-high levels of informal employment.

Alicia Bárcena, executive secretary of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), reminded conference participants that not all the countries of the region have stood resilient to the global recession. While most South American economies are expanding, Central America and the Caribbean have suffered. She said trade would be the engine of recovery.

Bárcena acknowledged that poverty had been greatly reduced but cautioned that the strategies used in that effort may not be sustainable long term. She underscored the region’s failure to embrace long-term planning, and she warned of the widening science and technology gap between the United States and Latin America.

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