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Challenges in the road to comprehensive cooperation

The impact of globalization, dramatic shifts in the international economic scenario, technological shocks and the constant quest for competitiveness are the biggest challenges Latin America and the Caribbean face in their efforts to forge more intense regional cooperation, IDB President Enrique V. Iglesias said in a speech at the Organization of American States.

In remarks made on Tuesday, Feb. 8 at the OAS headquarters in Washington, DC, as part of the Lecture Series of the Americas, Iglesias argued that trade agreements are an indispensable starting point to reach full regional cooperation, encompassing political, economic, social and cultural development.

The IDB president's presentation on The Americas: from Economic Integration to Full Cooperation noted the region's achievements and underscored several challenges and opportunities.

Iglesias focused on the impact of globalization on Latin America and the Caribbean in terms of trade, international finances and investment flows. He also pointed out the rise of new players in the world economy, such as China and India. In addition, he said, Latin America and the Caribbean's weak technological development will require enormous efforts to remain competitive and avoid falling permanently behind. “Those who cannot compete, cannot survive,” he stated.

To confront those challenges, Iglesias said, Latin America and the Caribbean need to work on various fronts: they should deepen their trade agreements, address domestic issues such as fighting poverty, inequality and social exclusion; continue the structural reforms that favor open economies; recognize development asymmetries and act in accordance, selecting and assigning priorities for cooperation; and strengthen their regional institutions. Disaster prevention and mitigation is another issue that should be added to an expanded program of regional cooperation, he said.

“We're going through a special period of bonanza that warrants cautious optimism,” Iglesias said. Conditions are favorable for building on the progress made during the 1990s, he added, highlighting Latin America and the Caribbean's renewed respect for macroeconomic stability and for the market as an efficient mechanism to allocate resources. The region also recognized the need for a strong and effective state as a regulator in the context of economic liberalization.

Iglesias said that there is probably no equivalent in the world to Latin America and the Caribbean's ongoing integration at the regional, hemispheric and international levels. While a pan-American vision had gained ground over the past few years, he added, it is still necessary to deepen regional ties and strengthen the World Trade Organization.

Iglesias' presentation was the second in the OAS' Lecture Series of the Americas, which was opened in January by former U.S. president Jimmy Carter.

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