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Nobel laureate Stiglitz stresses imporance of regional agreements and growing role of regional development banks

Nobel Prize laureate Joseph Stiglitz has stressed the growing importance of “regional public goods” in finding regional solutions to challenges such as building balanced free trade areas, natural disasters, commercial disputes, physical integration, social and financial crises, communicable diseases, security and stability.

Speaking at a conference on transnational challenges to regional integration at the headquarters of the Inter-American Development Bank in Washington, D.C., on Nov. 6-7, Stiglitz discussed the growing trend of negotiating North-South integration agreements. As an alternative, he analyzed the possibilities of developing countries to obtain more balanced and fair results in negotiating collectively against the difficulties of opening the markets in the industrial countries, which bar products in which the developing nations, especially Latin America and the Caribbean, have comparative international advantages.

“The regional banks fulfill an important role in financing areas of major concern to the countries, such as regional infrastructure,” said Stiglitz, winner of the 2002 Nobel Prize in economic science. “They do this with greater knowledge, sensitivity and concern for the general well-being,” he added.

The IDB and the Asian Development Bank, in cooperation with the U.S. Agency for International Development, organized the conference to encourage more effective proposals to achieve integration and intraregional cooperation in commerce, finance, infrastructure, and economic and social development.

Titled “Regional Public Goods and Regional Development Assistance,” the conference was carried out under the framework of the IDB’s Japan Program.

The forum was designed as a space to exchange new ideas, experiences and initiatives by multilateral development institutions, representatives of government agencies, private companies, civil society organizations and academics.

The conference was opened by Yoshihisa Ueda - IDB executive director representing Croatia, Japan, Portugal, Slovenia and the United Kingdom - and by Nohra Rey de Marulanda, manager of the IDB’s Department of Integration and Regional Programs.

The assistant administrator of the Bureau of Policy and Program Coordination for USAID, Patrick Cronin, welcomed the meeting in the context of the initiatives for increased development assistance announced by U.S. President George W. Bush earlier this year.

The director general of the Strategy and Policy Department of the ADB, Kunio Senga, discussed the necessity to mobilize all resources available, beyond development assistance.

The deputy manager of the IDB Department of Sustainable Development, Christof Kuechemann, said that while traditionally the production of “public goods” has required the leadership of national, state and local governments, “this leadership by the state does not prevent the active participation of civil society and the private sector in the production of public goods associated with the public sector; on the contrary, this is presumed.” He suggested the need to identify priorities and activities in the provision of public goods in the framework of the availability of resources.

The experts covered in five sessions the institutional perspective of donors, conceptual themes, regional experiences, operative dimensions, analysis by sectors, and regional cooperative initiatives.

The deputy manager of the IDB’s Department of Integration, Robert Devlin, moderated a panel on coordinating economic policy, and the chief of the IDB Environmental Division, Walter Arensberg, led another panel on the integration of regional infrastructure and the environment.

The “new regionalism” of the 1990s is a pillar of world liberalization, as well as a process occurring simultaneously with globalization, Devlin said. IDB Principal Economist Antoni Estevadeordal, said the increase in intraregional commerce and commercial agreements are starting points for other areas of regional cooperation.

The director of the Division of Vaccines and Immunization Division of the Pan American Health Organization, Gina Tambini, and Alfredo Solari, a senior health expert of the IDB, described the success of integrated immunization campaigns in the Americas in the past 20 years as regional public goods.

The interim chief of the Education Unit of the IDB, Juan Carlos Navarro, described numerous initiatives in the area of education in which the Bank has incorporated the concept of regional public goods. These take into consideration the impact and benefits for regional development, the demands by governments in the framework of the Summit of the Americas, scarce local resources for goods and services important at the supranational level, and the need for international leadership and coordination.

The chief of the IDB Information Technology Division, Danilo Piaggesi, conducted a panel on information technology and communication for governance.

Rey de Marulanda led a debate on the future of regional cooperation from the point of view of multilateral development organizations.

IDB President Enrique V. Iglesias, in closing the conference, said that international organizations as well as individual countries should assimilate regionalism in their development priorities, incorporating a broader internal strategy to mobilize financial and nonfinancial services to support integration and regional cooperation.

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