 |
| Participating
in a round table discussion on the European Union
and Latin American and the Caribbean were (l.
to r.) Romano Prodi, president of the European
Commission; Roberto Formigoni, president of the
Lombardy Region; Mario Baldassari, deputy economy
minister of Italy; Eduardo Frei former president
of Chile; Javier Pérez de Cuellar, former
United Nations secretary general; and Enrique
V. Iglesias, president of the IDB.
(Photo by Wilie Heinz) |
|
Milan,
Italy - European Commission President Romano Prodi called
for closer ties between Europe and Latin America and
the Caribbean, saying the two regions must accomplish
a great deal more in the area of integration to live
up to the expectations of their common heritage and
political outlook.
"It is impossible to have a strong economy without
a strong integration," Prodi said at a meeting
of leaders of Latin America and Italy on the eve of
the annual meeting's first plenary session. He said
the economies and political views of the two regions
were "completely compatible."
The president of the Lombardy Region of Italy, Roberto
Formigoni, hosted the meeting, which included IDB President
Enrique V. Iglesias, Italian Finance Minister Giulio
Tremonti, Italy's Deputy Economy and Finance Minister
Mario Baldassarri, and former Presidents Eduardo Frei
of Chile and Javier Perez de Cuellar of Peru.
Iglesias said "we see integration as something
beyond commerce," adding that support for democracy,
human rights, institutional modernization were among
the pillars of the trans-Atlantic partnership.
Income
support for labor
Researchers
from the IDB and other organizations today called
for reforms in income support systems to better protect
the labor force in Latin America and the Caribbean
during hard economic times.
In their papers, the researchers noted that incomes,
purchasing power, and employment were hurt by a series
of crises during the 1990s, among them the peso crisis
in Mexico in 1994-1995 and the financial shocks in
1997-1998 following the East Asia and Russian crises.
Senior IDB economist Gustavo Márquez noted
that shocks and volatility have become a fact of life
in Latin America's economic landscape, requiring "a
more comprehensive income support system" to
benefit workers as opposed to stop-gap emergency relief
measures that governments were forced to adopt to
meet the crises.
"The traditional legally mandated severance payment
mechanisms established in the labor laws have become
irrelevant in this new environment, given the narrow
scope of their coverage," he said.
Márquez called for a well-designed unemployment
insurance system, financed by both workers and employer
contributions. This insurance system should be supplemented
by other support measures, such as short-term training
and school scholarships, to benefit those outside
the insurance system.
Most of the individual components of a comprehensive
system "already exist in one for or another in
most countries in the region," said Márquez.
Bringing the components together in an organized approach
will be more effective in mitigating the harmful impact
of economic cycles on labor markets, he argued.
Development effectiveness
IDB
Executive Vice President Dennis Flannery yesterday
presented to the Committee of the Board of Governors
a progress report on the Bank's efforts to strengthen
mechanisms designed to ensure the effectiveness of
the Bank's support for social and economic development
in Latin America and the Caribbean. Over the past
year, the Bank has taken a number of measures to reform
its practices and tools in order to make sure that
the results of country strategies and operations can
be evaluated at the end of their implementation. Among
proposed future actions are the appointment of a chief
development effectiveness officer and a series of
other measures to strengthen evaluation systems and
ensure a consistent focus on results.
Signing
ceremonies
Mexican
Finance Secretary Francisco Gil Díaz and IDB
President Enrique V. Iglesias signed the contracts
for a $210 million loan to support the first phase
of a program to improve the coverage, quality and
efficiency of education in poor and isolated communities.
"This is a truly innovative loan for a truly
remarkable program, not only because it supports education
but because it reaches children whose families must
move frequently due to their work," Iglesias
said at the ceremony.
Also
for Mexico, National Financiera S.N.C. (NAFIN) Deputy
Director for Development Federico Patiño Márquez
and Inter-American Investment Corporation General
Manager Jacques Rogozinski today signed an agreement
committing $20 million to a guarantee program for
supply chain financing with Mexico's largest development
bank and leader in providing financing to small enterprises
that supply goods and services to public sector agencies
and first-tier companies. Also attending were Mexico
Finance and Public Credit Secretary Francisco Gil
Díaz and IDB President and IIC Chairman of
the Board of Directors Enrique V. Iglesias.
In another ceremony, Colombia's Finance Minister Roberto
Junguito Bonnet and IDB President Iglesias signed
documents for a $1.25 billion emergency loan designed
to help the government maintain macroeconomic and
fiscal stability while protecting social investments
and reforms.
Enrique Tierno Pérez-Relaño, managing
director of International Financial Institutions,
Investment Banking of Caja Madrid and Jacques Rogozinski,
general manager of the Inter-American Investment Corporation
today signed a fixed-rate $50 million, eight-year
term loan facility from Caja Madrid, secured in response
to a growing demand among small and medium-size companies
for fixed-rate borrowing.
Prospects for Mercosur agreement
A
seminar that took place March 21-22 discussed the
prospects for a European Union-Mercosur Association
Agreement and highlighted the potential role of the
Italian EU presidency of the second half of the year.
Speakers concluded that prospects for an eventual
agreement remain promising. The agreement would strengthen
the credibility of the Mercosur integration project
in the short term and stimulate growth and poverty
reduction in the longer term by granting secure access
to European markets in areas where Mercosur has an
international comparative advantage. According to
participants, a credible advance in the process could
stimulate anticipatory effects from EU and Mercosur
investors.
