Lima, November 22, 2004

This Andean Regional Conference on Employment constitutes the culmination of an important initiative advanced jointly by the Andean Community Advisory Council of Labor Ministers, the International Labor Organization (ILO), and this General Secretariat.

As you know, that Council discussed the idea at its Seventh Regular Meeting, held in Geneva in June of this year. The Advisory Council of Finance Ministers, together with the Andean Business and Labor Advisory Councils, subsequently joined in the initiative and today we are deeply satisfied to witness its materialization as a specific forum for open and multiparty dialogue, attended by other important bodies and institutions of the Andean Integration System and of the international community, as well.

We are now on the threshold of a transcendental moment, which is the signing of the Declaration of South American Presidents that will give birth to the South American Community of Nations this coming December 8th, with the historically symbolic city of Cusco as its backdrop. The new community will be shaped from the progressive dovetailing of the Andean Community and MERCOSUR, together with Chile, Guyana, and Suriname, in what is the greatest development project of our history.

The South American Community will constitute a unique opportunity for the decentralized development of our countries, by creating regional economies in the areas of influence of the great Integration and Development Hubs of the IIRSA program, complemented by the free trade agreement the two subregional organizations have just concluded and the harmonizing of their respective Community rules and regulations. This is a task we must undertake rapidly in order to underpin the deep integration process and our joint external projection.

The South American Community of Nations, without considering the results of the integration process, will be among the five major world economic powers.

This event, which is of great historical importance to the lives of our nations, will be preceded by a special meeting of the Andean Presidential Council on December 7. This meeting will be devoted to an exercise in critical reflection about development, employment, and also the major social and political challenges our countries must meet as they move toward a process of globalization that encompasses all, but excludes many. In this connection, this Andean Regional Conference on Employment is very well-timed to contribute with its conclusions to the exercise in reflection of our Presidents in Cusco.

The Andean region and, in general, all of the Latin American countries have today reached an important point in their history: the moment to define the place they will take in the ongoing globalization process.

It is a fact that this globalizing process is one of many years’ standing. In fact, our region has been in the process of assuming its position in the international system for centuries. Its start, as we all know, was not very auspicious. Its history is filled with advances and retreats, with heroic efforts, with grand scripts in which integration always occupied the leading position, but which suffered from an almost structural difficulty in converting ideas into deeds.

The time has come to shape a strong political consensus to confront globalization from the vantage point of integration.

In the process of building Andean integration, we have learned a great deal from our mistakes and failings, but we also have some successes to show –among them, our perseverance in the integration effort, despite all our adversities.

Based on that experience, I would like bring out some elements as a contribution to the fruitful dialogue that will most assuredly take place at this meeting. .

The inhabitants of the five Andean countries are demanding --as an increasingly important priority-- access to better employment opportunities, especially of better quality jobs with appropriate productivity, good pay, and access to social security.

It should be recalled in this connection that according to figures published by the ILO, seven out of every ten jobs that are created today in our countries are in the informal sector. As a result, the spread of informal employment, lacking minimum social guarantees and a state vision and commitment, has become both a social buffer and an enormous element of exclusion that only compounds longstanding ethnic and gender-based problems.

This instability is reflected in the troubling poverty, exclusion, and inequality indicators our region exhibits. According to the systematically organized data published by ECLAC in its Social Panorama of Latin America, 2002-2003, there are cities and towns in the Andean subregion where 63% of the urban population lives below the poverty line and in the rural areas the situation is even worse, with the poor accounting in some cases for 80% of the population.

If we add to this already bleak panorama the marginal condition of large sectors of our populations, together with the worst income distribution rates, then the Andean region can be affirmed to be one of the world’s most inequitable areas, with among its largest social gaps.

Despite the huge efforts being made by our countries, our economies are still incapable of producing the jobs and resources we require to finance the services and benefits that are needed to meet legitimate social demands.

According to the ILO document to be discussed at this meeting, the Andean countries have moved further away from international trade, despite their growing exports.

As a result, the problem lies in how to move away from exports with a low technology content and commodities towards the production and export of knowledge-intensive goods and services, which are precisely the elements of world trade that have shown the heaviest growth and that ensure a quality international trade presence.

In other words, it is the qualitative weakness of the Andean countries’ export base that is most likely at fault --at least in part-- for the fact that our economies have not reached the level of competitiveness needed to position ourselves better within the globalization process.

Once again, the approach affirming that the social, political, and economic order are the spontaneous result of a process in which all that is necessary to accede to a higher and better order is to liberalize the market and deregulate our economies, has proven itself to be incorrect.

As we have pointed out repeatedly, we should not continue to place our hopes in the illusion that higher economic growth rates will automatically result in the anxiously desired reduction of poverty and the solution to our social problems. There is no such thing as ‘drip’ development. Nor is it the function of the market to distribute equity.

This means that it is not enough to reach high economic growth rates –although that is undoubtedly important--, but that that growth must be socially equitable. It is necessary, therefore, to link up economic policies with social goals, so that growth bears within itself the seed of equity.

In that connection, the economic must be recovered for the political, so that the economy can be socially efficient and the state capable of fulfilling one of its primary functions: that of guaranteeing equal opportunities. In other words, we must recover political economics.

Guaranteeing the creation of quality employment –or “decent employment,” as the ILO calls it—should lead us to discuss new development strategies that would place emphasis on closing the social gap, building more egalitarian societies grounded in solidarity and the defense of democracy and fundamental rights and freedoms, strengthening our social cohesion and governance, and substantially improving our education as the primary instrument for generating inclusion and equity. But that would also create a new, competitive society that should adjust continuously to a changing environment, in a world in which only change is permanent and where innovation offers the means for progressing.

It is an undeniable fact that under the present circumstances the creation of quality employment is the principal means by which most of our people can earn an income. As a result, this is the basic link we should promote and reinforce so that economic growth and poverty reduction can finally begin to move ahead in the same direction.

Employment, however, is also the means for personal realization, for obtaining inclusion in society and participation in the state –in short, employment today is, more than ever, a prerequisite for citizenship.

We sincerely hope during the course of this meeting that a widely-ranging discussion of both political and technical issues can be produced that will make it possible to identify and refine common economic policy criteria emphasizing the creation of quality employment, as well as the development of the competitive capacities that will enable our countries to obtain a qualitatively better socially inclusive international trade presence.

In this connection, we trust that this Conference will make it possible to promote an Andean initiative for employment, development, and competitiveness that could lead us to shape a new Andean social pact that is fundamental for reinforcing our integration and ensuring comprehensive development and a growing international trade presence beneficial to our nations.

It is a fact that social pacts are often viewed as agreements between entrepreneurs, workers, and the state. We must go beyond that notion, however, and forge a pact involving all political and social forces, united by a shared vision of the kind of society we want to live in and of the new democratic state we must build –a state capable of promoting equitable growth, strengthening social cohesion, and ensuring our countries’ democratic governance.

In this context, a social pact that revolves around work is extremely important today. Work is, criticism apart, perhaps the strongest link between man and nature, just as it is among human beings themselves. The Andean world offers a good example of how rugged terrain may be put to the service of men and women and in harmony with nature, thanks to work.

Andean integration must also be viewed as an element inherent to this new social pact, for it links up states and societies through Community objectives and interests that go beyond limited national boundaries.

As I have frequently pointed out, the integration process is precisely the meeting point between an internal agenda designed to deal with our great social deficit and an external agenda that tackles the challenges posed by globalization. It is in this integrating process that we will be able to find the solutions to our serious national problems and, at the same time, to build, first, an Andean Community, and later, a South American Community, on the road to recovery of the project of an integrated Latin America. I believe that the word Community, whether it be Andean, South American or Latin American, has never been better used.

Envisioning integration as part of a social pact is envisioning the very Community we are striving to form. In actual fact, what distinguishes one community from another is not only its past, but also how men and women have imagined it and what they imagine it will be like in the near future.

For that reason, integration processes –and particularly Andean integration-- must overcome the reductionist idea that turns them into mere synonyms for trade agreements. Integration is far more than just a trade agreement. It is also the union of nations, of cultures, of societies, of geographies, of objectives, and of common visions of a shared future.

In short, integration is basically a social and political project that must be popular in order to be successful. In other words, it must be appropriated, inspired, and furthered by the people themselves.

It is a fact that the various Community institutions have an active role to play in building that new social pact in this process, complex as it is.

In that connection, we would like to join in the call made by the Advisory Council of Labor Ministers and by the Andean Business and Labor Advisory Councils, to put into effect --as soon as possible and as an essential prerequisite for this process-- the new Simón Rodríguez Convention, a tripartite and equal participation body that will define and coordinate sociolabor policies in the subregion, which is still in the process of being ratified by some of the national congresses. We respectfully appeal to them to proceed to approve that Convention as rapidly as possible and ask our Andean Parliamentarians to collaborate with us in this endeavor.

We also wish to back the initiative put forward by the Andean Business and Labor Advisory Councils to form an Andean Economic and Social Committee as a forum for reaching agreements and a mechanism for coordinating initiatives to benefit integration and our increasing and competitive trade presence. Also to promptly put into operation the Andean Labor Observatory, as a technical instrument that will provide these bodies with the technical elements they require.

Because it is society, in the final resort, that must forge the links of understanding and unity we seek here today, I wish to draw attention to the increasingly important role the Andean Parliament is called upon to play in building and giving legitimacy to this new social pact for employment, development, competitiveness, and integration. We also assign it, together with the corresponding MERCOSUR Parliamentary body, an outstanding role to play in giving birth to the new South American Community of Nations in this terrain, where sociolabor issues and this new social pact will take on a new and highly positive dimension.

It is in this same spirit that we also greet the other bodies and institutions of the Andean Integration System that are participating with determination in this Conference, together with the various international organizations and institutions that accompany us on this occasion.

We very especially wish to express our appreciation to the ILO for its unconditional support in bringing to fruition this initiative of holding an Andean Regional Conference on Employment, and for its close collaboration with the various Community bodies in recent years, particularly in the activities of the Advisory Council of Labor Ministers and the Andean Business and Labor Advisory Councils.

We wish you luck in your deliberations and rest assured that these premises –which belong to everyone, for they are home to the integration movement-- will always be available to you to discuss and delve more deeply into these issues that are a matter of concern, but also of hope, to millions of Andean citizens.

Thank-you very much.