Inter-American Development Bank President Enrique V. Iglesias proposed a series of ambitious goals to spur progress in Latin America and the Caribbean in this decade in his address today at the inauguration of the IDB’s 41^st Annual Meeting in New Orleans.

The goals that the IDB president called the most pressing were the following:

· Reduce poverty in the region by half, from the present 40 percent of the population to 20 percent.

· Double the region’s annual economic growth rate to at least 6 percent.

· Ensure that all children presently in the first grade complete their remaining 11 years in school.

· Expand and diversify exports, whose rates of growth during the past decade lagged behind those of imports, thus increasing the region’s external vulnerability.

· Deepen the process of regional economic integration and broaden it to include cooperation mechanisms to counter the contagion effect of financial crises or recessions in other parts of the world.

· Reduce unemployment, a principal root cause of poverty, unequal income distribution, frustration, and the rise of social and political intolerance.

· Deepen State reforms to combat corruption and inefficiency of government institutions, which is a major cause of the region’s lagging economy.

· Reduce the level of violence and insecurity, whose economic costs equal or exceed factors such as the shortage of credit and political instability.

· Speed up public access to new technologies such as the Internet, which offer the region a shortcut for getting up to date in the area of informatics.

"These are the pillars of an attainable utopia: a region of prosperous economies in which social justice and democracy hold sway, well positioned in the global marketplace," said Iglesias in his address before the governors of the Bank’s 46 member countries.

In addition to describing each of these goals, the IDB president made a detailed analysis of the reforms undertaken by the Bank’s borrowing countries during the 1990s. Achievements included a sharp reduction of inflation, opening markets, and the emergence of the private sector as the engine of economic growth. At the same time, he noted that serious limitations in the set of policies known as the Washington Consensus have become evident, particularly in terms of their social costs. Despite the reforms, Iglesias said, one of every three Latin Americans is poor, and the region has the most unequal distribution of income in the world.

In light of this analysis, Iglesias asked if it might be time to look for a new paradigm to improve the quality of development and achieve a balance among the principal goals of economic policy, employment, economic growth, and price stability.

"The current consensus is that the objectives of employment, growth, and stable prices are not only attainable, but mutually reinforcing," said Iglesias. "This marks an important evolution of the economic policies implemented in the 1990s."

Iglesias underlined the danger posed to the region’s political and economic instability by the persistence of social ills such as inequity, poverty, unemployment, violence, inefficiency and corruption, all of which increase frustration with democracy.

"It is essential that this sentiment not become more widespread and perhaps erode grassroots support for the system," he warned.

In this regard, the IDB president emphasized the importance of consolidating democracy through deep reforms for improving the efficiency of executive, legislative, judiciary, and regulatory institutions.

"We must do away with any chance of the return of authoritarian regimes or chronic political instability," said Iglesias. "In the long run, the success of a market economy hinges on a sustained saving and investment effort. Our countries will be unable to generate the necessary savings or attract the capital flows and technology that are so crucial in today’s globalized world unless they offer prospects for long-term political and judicial security and stability.

"Such prospects only exist in a firmly rooted democratic system, in which radical redefinitions of power or of the ground rules are not a continual threat," he added.

During the next decade, the Bank should capitalize on its comparative advantages with other financial institutions and on the experience it has built up during its four decades of operations, Iglesias said.

The IDB must be prepared to meet changing demands by its borrowing member countries that are difficult to predict, stemming from emerging opportunities presented by globalization and preventing its risks, he added.

The Bank’s strategy is based on three major policy thrusts: social reforms, spurring sustainable economic growth, modernization of the State, and renewed support for integration of the countries of the region.