That was one of the main conclusions arrived at by officials who attended a seminar hosted by the Inter-American Development Bank last week at its Washington, D.C. headquarters. The two-day meeting gave representatives from all across the Western Hemisphere an opportunity to discuss practical ways to improve their procurement systems.

"Efficiency is not only an issue of economic concern. It is also linked to the consolidation of democracy because it furthers the credibility of the state," IDB President Enrique V. Iglesias said in a speech opening the seminar on Thursday.

The public sector continues to be the single biggest buyer of goods and services in most Latin American and Caribbean countries. The region spends up to 20 percent of its gross product on procurement, which represents about $200 billion a year.

Despite the magnitude of those outlays, public sector acquisitions and contracts have been largely left out of the past decade's agenda of major structural reforms in Latin America and the Caribbean.

"Public procurement should not be seen as a mere set of purchasing activities, but as an integral element of change in the modernization and decentralization of the state," said Jorge Claro de la Maza, Chief of the IDB's Procurement Policy and Coordination Office and organizer of the seminar.

"In many countries of the region responsibility for public sector procurement is atomized throughout different ministries and state agencies, with a prevailing multiplicity of actors and the absence of a focal point in this area," he added. "With responsibility thus diluted, governments run the risk of not having an integral, strategic vision of procurement."

Nevertheless, some countries have already implemented solutions to some of these problems, such as clarifying their laws and rules on procurement or adopting modern procurement methods based on electronic processes.

During the seminar some of the people in charge of those systems described their experiences and fielded questions from other officials interested in following similar paths in their own countries.

Representatives of Canada and Mexico explained how their governments set up their computer-based procurement systems to track purchases and contracts made by public sector agencies.

Antonio Schleske Farah, head of the Mexican Comptroller's Bureau of Rules and Standards for Procurement, Public Works, Services and Federal Assets, told the audience that the "Compranet" Web-technology system gives his government a transparent mechanism to handle information on public tenders.

The Treasury Secretary of the Government of the city of Buenos Aires, Adalberto Rodríguez Giavarini, talked about how his administration managed to cut the cost of public sector contracts by as much as 60 percent in just one year.

Rodríguez Giavarini said Buenos Aires switched from a system based on closed or restricted bidding in which suppliers and contractors were usually paid late, to a policy based on widely advertising calls for bids to generate more competition for city business and prompt payment of bills.

As a result of those changes in its procurement practices, Buenos Aires saved $183 million last year, or roughly six percent of its spending. Summing up his point, the Argentine official said: "We're no genies. Something was wrong with those prices."

The city of Buenos Aires established a single account-system this year to centralize payments and impose clearer controls on its outlays. As a next step, the government wants to move towards an electronic procurement system that would allow it to divulge information about tenders more efficiently and to reduce the chances of improper contacts between officials and suppliers.

During the seminar officials also discussed governments' need for highly trained staff who can manage modern procurement systems, updated legislation that recognizes the use of electronic purchases and payments, and disclosure policies that allow the public to gauge the public sector's performance. Therefore, it was noted, countries must pursue these reforms to meet successfully the challenges posed by the liberalization of markets, economic integration and globalization.

At the closing of the seminar, President Iglesias said that the IDB would continue to sponsor debates on issues related to government procurement. The Bank would also be ready to make them part of its state modernization programs for countries that make such a request.

As part of its own anti-corruption mechanisms, the IDB this year amended its rules against bribery, extortion, fraud and collusion both during the bidding process and throughout the execution of Bank-financed projects.

Under the new guidelines, if any corrupt practices are detected in a program, the IDB may reject any contract awarded, exclude firms or individuals from future contracts or cancel the portion of a loan or grant earmarked for the contract.