CIGI at The Summit of the Americas

The Honourable Patrick Manning, Prime Minister of the Republic of Trinidad and Tobago

As Chair of the Fifth Summit of the Americas, I must say how very pleased I was with the manner in which the deliberations progressed yesterday in the Plenary Sessions and again this morning at the Leaders’ Retreat. Since taking over the leadership of the Summits of the Americas Process, Trinidad and Tobago has called, consistently, for greater cooperation, integration and solidarity among our nations as the primary vehicle for ensuring peace, security and prosperity for all the peoples of the Americas. This Summit has been a historic event for us here in Trinidad and Tobago and for the wider CARICOM Region and has exceeded by far all our expectations.

The Port of Spain Summit was characterized by mutual respect and an eagerness and genuine desire to work together on solutions to the many challenges facing the Hemisphere. Several leaders expressed the view that Port of Spain marks a turning point for inter-American relations and for building a stronger community of nations.

Latin America and the Caribbean are now at a different crossroad in their relations with each other and with the United States of America. With the changing political landscape, the terms of engagement have changed and occasioned by an altogether different posture that is based on mutual respect and equality among partners. The leaders of the Hemisphere agreed that we now have a real opportunity to put inter-American relations on a completely new footing which sees all countries, big or small, developed or developing as equal partners. Such relations must be built on the basis of new vision and a people-centred development strategy.

The deliberations over the past day and half centred on the three main pillars of Declaration of Commitment of Port of Spain – human prosperity, energy security and environmental sustainability.

The discussions also focused on the re-integration of Cuba into the inter-American system, and on developing relevant responses to the current global financial crisis.

Reintegration of Cuba in the Inter-American System

Several Presidents and Prime Ministers called for an end to the exclusion of the Cuba from the Summit process and the inter-american system. There was a clear consensus that the reintegration of Cuba in the inter-american relations is an essential step toward the building of a more cohesive and integrated Americas. The very open and conciliatory stance of President Obama and other leaders at the Summit has heightened optimism for the full engagement of Cuba in Hemispheric affairs in the not too distant future. The Government of Trinidad and Tobago looks forward to the day when Cuba is fully embraced into the folds of the inter-american family.

Global Financial Crisis

At the time of this Fifth Summit, the world economy is facing a severe financial crisis, which has led to a wide-spread global economic slump. Economic statistics released by the International Monetary Fund in January 2009 indicate that the world economy grew by just 0.5 per cent in 2008 but is expected to record negative growth for the first time in 60 years, in 2009.

While the economies of the Western Hemisphere fared much better in 2008 growing on average by 4.8 per cent, economic growth is expected to slow sharply in 2009 to around 1.0 per cent.

The countries of the Americas now face higher than expected declines in the price and volume of exports, restrictions in access to trade financing, difficulties in accessing other kinds of external finance and reduced remittances from migrant workers. The current economic slump has depressed commodity prices, constrained the growth of investment, weakened labour markets and lowered business and consumer confidence.

They are also not immune from the negative social consequences of the current global crisis which is threatening to derail the hard-won gains that achieved over the past two decades. The social consequences are likely to be quite significant. Many people are losing their jobs and are being forced back into poverty.

The impact on the smaller economies has been even more pronounced. A protracted crisis will create severe economic and social hardships in these vulnerable economies and can derail them from the path of sustainable development that they have been working so assiduously to achieve.

In the context of the current economic downturn, ensuring sustainable development for all the peoples of the Americas requires a renewed focus on the commitments made in the Doha Declaration; the Millenium Declaration; the Monterrey Consensus and the 2005 Global Summit.

Many countries have unveiled various measures to mitigate the impact of the crisis and maintain macroeconomic stability including fiscal stimulus plans, tax cuts, liquidity support for financial markets and interest rate reductions. However, the extent of the fiscal support needs to be carefully managed so as not to limit fiscal space going forward. Greater harmonization of monetary and fiscal policy is now essential.

Notwithstanding individual efforts, the crisis requires a concerted and coordinated global response. Unilateral action alone will likely be ineffective. There is a need for greater economic and commercial ties among the countries of the Americas; and the restoration of credit flows to finance international trade and arrest any abrupt decline in exports.

Developed countries also have an important role to play in addressing the weaknesses in their financial systems, in order to restore trust in the markets.

The decision at the recently concluded London Summit to make $1.1 trillion in new resources available through the International Financial Institutions to restore credit, encourage trade and support employment and growth in the global economy is a step in the right direction. This package must be implemented as soon as possible. While the allocation of resources to the IMF is a positive step, it is but a basic one. Priority must also be given to reviewing of capital requirements of the other multilateral institutions and to supporting their various liquidity enhancement initiatives.

The Inter-American Development Bank and other financial institutions must use their respective competitive advantages and financial resources in order to more aggressively fulfill their mandates on poverty reduction and sustainable development. Leaders placed the recapitalization of the Inter-American Development Bank high on the agenda for immediate action.

The recognition of the human dimension of the crisis and the possibility of including environmental consideration in the fiscal stimulus plans show that the leaders at the G20 London Summit, in spite of the pressing short term demands have not forgotten the long-term consequences. It is a positive signal that, in the midst of the economic turmoil, the commitment to face the challenge of climate change and its irreversible consequences is reaffirmed.

Each government has an important role to play in what is now an interdependent global financial and economic system and robust and effective regulatory structures must be implemented to enhance the stability of national and regional financial systems.

There must also be greater involvement by emerging and smaller countries in the Western Hemisphere in the overhaul of global regulatory structures, markets and systems with a view to forestalling future financial crises. Small countries have a legitimate interest in the responsible, transparent, yet competitive export of international services.

Stimulus efforts, as far as possible, must support sustainable economic growth and development in order to promote human prosperity, energy security and environmental sustainability

Declaration of Commitment of Port of Spain

The Declaration of Commitment of Port of Spain, which was the document negotiated over the last six months by 34 countries, outlines measures to be taken at the technical level towards the goal of securing our citizens’ future. The Declaration makes broad reference to the financial crisis and as such, does not address, in any detail, the specific implementation measures. The issue of the economic crisis must be dealt with very carefully and therefore, Ministers of Finance of the Western Hemisphere, who will meet in Chile in July, will be directed to examine the crisis in greater detail, taking into account the outcomes of the London G20 meeting, and to clearly define practical measures to be taken by all countries.

During the Leaders’ Retreat an agreement was reached that the Chair of the Fifth Summit of the Americas, would sign the declaration as having been adopted by all Heads of State and Government attending the Summit.

While there were reservations by some countries on particular aspects of the Declaration, the Leaders wanted to send a strong signal of solidarity and cooperation. The collective view was that the Fifth Summit was a tremendous success, pervaded by a unique spirit of openness and goodwill, and that it heralds the beginning of a new era in inter-American relations

Haiti

In the same spirit of cooperation, the Leaders reiterated their commitment to supporting Haiti and agreed that the issue of funding for development programmes would be addressed at the OAS General Assembly in San Pedro Sula, Honduras in June.

Carla Angulo-Pasel, CIGI Research Officer

As one of the major themes for discussion at the Summit of the Americas, security has once again come to the fore with the rising violence in the northern regions of Mexico. The drug violence of major drug gangs in Mexico has not only taken the lives of over 6,000 people last year, but has also reduced tourism which is especially challenging given the economic situation in the region.

Drug trafficking as a transnational crime is not new and achieving a feasible long-term solution will not be an easy task. Counter-narcotics initiative like “Plan Colombia”, despite some observers claiming it as a success, does not achieve a reduction in coca cultivation. Though statistics may show a reduction in coca cultivation in one area, Colombia, for instance, in the same year there, is an increase in another area, either Ecuador or Peru – the classic balloon-effect. In addition, reducing the cultivation of coca only damages the farmers in rural areas who are dependant on this livelihood, by not only destroying the crop but, in many instances, forcibly displacing people and causing serious health maladies which directly contradict the other agenda items at SOA: reducing poverty, respecting human rights, and improving health.

Of course the better solution would be to solve the core problem of poverty by providing alternative livelihoods for these farmers. However, this is easier said than done – this type policy began to be instituted in Colombia, but did not achieve much success. In the past, there has always appeared to be a preference for a military hard security approach. With all eyes on the new Obama administration and the good will approach he has been promoting, it will be interesting to see how the issue of drug trafficking and its connection to security will be handled.

Navin Seeterram,
Research consultant, Trinidad energy, peace, security and development

Connecting the perspectives on the resource curse, such as those offered by economics, political economy, and conflict studies is a recent phenomenon. While these areas feed off one another it does not seem to do so evenly enough – and the loser of this is effective policy. Schools of economics and political economy tend to have the more dominant say over academic and policy circles than those from conflict studies.

Economists show the resource curse as the inverse relationship between resource abundance and economic performance; they look to the mechanics of price volatility and the Dutch disease. Political economists add issues of governance and institutional capacity building to these symptoms. Proponents of conflict studies look at the shadow economies infiltrating these resource based economies; they expose the web of informal exports and the criminal economy which grows regardless of progressive initiatives made in the political and economic realms of development policy.

Latin America and the Caribbean hold the unfortunate indicator – albeit controversial – of having higher levels of inequalities than any other region, which in turn produced more homicides in “peace time” than casualties during some civil wars of 20th century. Even as a proxy, such levels of violence associated more often with civil war leaves ominous conditions for more reformative development initiatives to bear fruit. Amongst the highest levels of homicides in the region are resource rich countries namely, Venezuela, Colombia, Trinidad and Tobago and Brazil. These countries are integral in the expansion of the international drug trade, often cited as a major systemic cause of increased violence and frustration for development. Implementing sound development policy for resource cursed countries should see heads of states merge it with a security and foreign policy dimension that can be engaged more substantively bilaterally and in multilateral institutions.

This begs two questions: (1) should the conflict studies discourse be expanded in academic and policy treatments of the resource curse? (2) If so, how can the merging of development, security and foreign policy be instituted for the improved governability of heads of states?

Thomas O’Keefe, President, Mercusor Consulting

As someone who started working on the campaign of Barack Hussein Obama to get him elected to the White House in the Spring of 2007, it is with disappointment that I await the official opening of the Summit of the Americas today in Port of Spain, Trinidad.I joined the campaign when pundits and the “smart” money didn’t give Obama any chance of winning the Democratic Party nomination let alone the Presidency. I sensed, though, that the candidate with whom I shared the same year of birth, profession, and even a university degree and who had also spent some of his most formative years living in the developing world intuitively understood what was fundamentally wrong about U.S. foreign policy and what desperately needed to be reformed. I still feel that way. I also understood early on that Latin America and the Caribbean would never figure high on Obama’s list of foreign policy priorities if he ever won, despite the fact that I and almost 20 percent of my fellow Americans can trace our origins there.

Two years after I joined his campaign, Obama arrives in Trinidad as my country’s President without any cohesive vision to present to the other 33 democratically elected leaders of the Western Hemisphere on the future of U.S. relations with the region. While Obama has stated
that he has come to listen, a welcome change from how many previous U.S. presidents treated their hemispheric peers, this is not enough.
Obama needs to at least offer a framework for establishing a mutually beneficial hemispheric partnership and then invite input from the other gathered leaders. Creating a Community of the Americas, a concept detailed in my new book “Latin American and Caribbean Trade Agreements: Keys to a Prosperous Community of the Americas”
[http://www.brill.nl/default.aspx?partid=210&pid=28501] provides precisely the missing strategic vision that can both excite the imagination and engage the inhabitants of the Western Hemisphere to ensure it is
fulfilled. Some of the most pressing problems facing the United States today can only be resolved by working closely with its southern neighbors, whether it be controlling migration flows, finding new export markets for goods and services, ensuring energy security, or reducing greenhouse gas emissions.