Sustaining Growth Trends
03/18/2005
Ambar Hernandez,
The Miami Herald
Latin America's 5.5 percent growth rate encouraged a group of economic experts to predict a bright future, but other experts say the region must address other factors before it can maintain prosperity.
At the Council of the Americas' first Latin America conference Thursday in Miami, panelists discussed the business climate, democratic progress and the future of Latin America.
Mexican presidential candidate Jorge Castañeda said policy reforms will be required to help Latin America gain the foreign investments it needs.
"`If we don't eradicate poverty, reduce inequality and provide security,'' he said, "we won't be able to transform the region.''
Foreign investment in the region, currently about 14 to 17 percent of Latin America's GDP, is far from the ideal 25 to 30 percent, said Alvaro Vargas Llosa, a senior research fellow at the independent Institute of Oakland, Calif.
Despite the fact that Latin America is "growing, exporting and getting investments, there are still structural reforms pending,'' Vargas Llosa said.
One of these reforms includes reducing the 45 percent of the Latin American population living below the poverty line, he said.
Richard Feinberg, director of the University of California-San Diego's Asia Pacific Economic Cooperation Study Center, said a free trade deal, like the Central American Free Trade Agreement or the Free Trade Area of the Americas, is imperative to maintain Latin America's recent growth spurt.
"CAFTA and the FTAA will add to Latin America by allowing a huge portion of the Western Hemisphere to trade freely,'' he told the audience.
CAFTA aims to eliminate tariffs and facilitate trade in agriculture, goods, investment and services with El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and the Dominican Republic.
The U.S. Congress is scheduled to vote on CAFTA this summer.
The Council of the Americas, which serves as an advocate for businesses in the Americas, promotes free trade, open markets, democracy and the rule of law.
