Speaking at the seminar on “Reforming Reforms” are, left to right, Eduardo Lora, principal economist of the IDB; Joaquim Vieira Ferreira Levy, chief economist of Brazil’s Planning Ministry; IDB President Enrique V. Iglesias; and Guilermo Calvo, chief economist of the IDB. Photo by Zinda Perrú. (Photo by Z. Perrú)

Leading economists and other specialists on Latin America and the Caribbean today decried a backlash against reform that is sweeping the region and warned that new approaches will be necessary to contend with pressing issues such as corruption, income inequity, lax tax collections and disillusionment with democracy.

A paper presented by two economists, Eduardo Lora, principal economist of the IDB’s research Department and IDB Economist Ugo Panizza, noted growing dissatisfaction with reforms in recent years, especially among the middle class.

A recent poll showed that Latin Americans held a very low opinion of the wave of privatizations of state companies in the 1990s: 63 percent of the respondents felt the result was negative.

“What makes Latin Americans frustrated is not the privatizations themselves, but the corruption that surrounds them,” commented Lora.

Two out of three Latin Americans are dissatisfied with the results of democracy and only one out of two believe democracy is the best form of government, according to the poll.

The paper concluded that the region, despite a disappointing rate of growth during the 1990s and a current recession, needed to continue the reform process with greater care, integrating the strengthening of public and private institutions to enable reforms to work while taking provisions to enable incomes to rise on an equitable basis.

It noted that some reforms were more successful than others – trade liberalization and financial reforms advanced well, tax reform and privatizations were uneven, while labor reform was scant.
Lora and Panizza presented their paper at a seminar titled “Reforming the Reform,” one of the many conferences held in Fortaleza in conjunction with the 43rd Annual Meeting of the Inter-American Development Bank.

Despite the unevenness of the reform process of the 1990s, “per capita income is 11 percent higher in Latin America than it would have been without the reforms,” Lora and Panizza said.

SUSTAINABLE TOURISM CAN PROMOTE SOCIAL AS WELL AS ECONOMIC GOALS

Calling tourism an “instrument for cultural and social integration” as well as an engine for economic growth, IDB President Enrique V. Iglesias today set forth a series of lessons the Bank has learned from its extensive experience in the field.

Iglesias made his remarks at a luncheon session of the day-long seminar “Sustainable Tourism Development” as part of the 43rd Annual Meeting of the IDB Board of Governors. Also participating in the seminar were Martus Tavares, Brazil planning minister, Caio Luiz de Carvalho, Brazil sport and tourism minister, Paulo Paiva, IDB vice-president for planning and administration, Eleazar de Carvalho, president of Brazil’s National Bank for Economic and Social Development, and Byron Queiroz, president of Brazil’s Banco do Nordeste. The seminar was organized by the Banco do Nordeste, which carried out the first phase of a major IDB-financed tourism program called Prodetur.

One requirement for sustainable tourism cited by Iglesias is that benefits from the sector must be distributed among the population as a whole. If a community is expected to accept tourism’s negative impacts, local people must also share in the benefits. At the same time, special efforts must be made to prevent negative social and environmental effects.

Iglesias also emphasized the need for careful planning in the creation of tourism infrastructure. He conceded that developing a consensus on tourism development is a “long and complex” process and called for institutional mechanisms to make the process more efficient.

The IDB’s experience in the tourism sector has also demonstrated the need for training members of local communities to provide for the direct needs of tourists as well as ensure basic public services. Training results in jobs, which contribute to the stability of the tourism industry and increases the tolerance of the local population to tourism’s inevitable impacts.

Iglesias also called for a significant involvement of the private sector. In order that this happen, entrepreneurs and potential investors must have complete information not only on tourism attractions, but on tourism demand, the existence of trained manpower, and local opposition to tourism investments.

The IDB president closed by emphaizing the Bank’s willingness to consider financing for new tourism initiatives.

In his remarks, IDB Vice-President Paiva emphasized the importance of tourism as a mechanism for social inclusion. Benefits flow to all strata of society, from investors and hotel owners to artisans, guides, hotel workers, and many others, he said.

Other activities

The IDB Annual Meeting is the site for ceremonies to sign loans previously approved by the Bank’s Board of Executive Directors. View press releases on the Bank’s Annual Meeting homepage.