“Integration and Social Development in the Andean Community”
Presentation by Ambassador Allan Wagner Tizón, Secretary General of the Andean Community, in the Seminar “Work and employment in free trade agreements”
Lima, April 28, 2004

Ladies and Gentlemen:

Our Andean and Latin American societies show indices of poverty, disparity and social exclusion which threaten governance and weaken the legitimacy of our democratic system. This is one of the main conclusions drawn from the recent UNDP report on democracy in Latin America. Still rattling around in our minds are the worrying credibility indices of our citizen representation systems and the irresponsible charming voices calling us to de facto or quasi-constitutional alternatives, as though they would be able to take care of our people’s expectations in a more efficient and durable way.

According to the last report from the Economic Commission for Latin America (CEPAL) about the Social Scenario in Latin America 2002–2003, the poverty index in the Andean Countries is around 53%.

According to the indices for 2002, in Bolivia, 62.4% of the population lives below the poverty line, in Peru it is 54.8%, in Colombia, 50.6%, in Ecuador, 49.0% and in Venezuela, 48.6%. Although these indicators have improved slightly in the last few years for some countries, the solid reality is that, in view of the population growth, there are more poor people today in the Andean Region: 60 million inhabitants live below the poverty line. This is a clear evidence of the serious social situation that afflicts our countries.

However, the most serious thing is that to this picture of poverty, we have to add the immense disparity in the distribution of income. Without doubt, the most characteristic feature and the most worrying to the Andean societies is the increase in the said disparity, in recent years.

The CEPAL 2000 Report notes that percentage of persons with per capita income less than the internal average is extremely large. Thus, in Bolivia, 73.6% of the population has an income of less than the average, the index in Colombia is 72.4%, in Ecuador, 72.3%, in Peru, 70.3% and in Venezuela, 68.7%.

Social exclusion is another of the problems affecting our people, to a great extent due to the lack of good quality education and, consequently, their inability to obtain access to culture, to “a decent job” (in the words of the ILO) and their lack of connection with competitive opportunities demanded by globalization. On the other hand, the marginality of certain important sectors, associated with ethnic and gender factors, is confirmed to be a problem that becomes more and more complex, adding a negative component to our social scenario.

Because of this, there is no doubt that the biggest and most urgent challenge facing our nations is the development of social equality, capable of generating decent employment for everyone and ensuring access to education and health for the whole social conglomeration, without making any difference between gender, age or ethnic-cultural origin.

Integration has the duty of contributing, in the most explicit and efficient manner, to the persistent improvement of living conditions of our people, as established by the Cartagena Agreement in Article One.

To translate this political and legal obligation into concrete actions and results is the job and mission of all of us who are responsible for materializing Andean integration. And this challenge is made even more complex because the economic and social development of our countries takes place in a global context that becomes more and more competitive, offering advantages but also entailing risks, if we do not take the necessary measures.

For this reason, during all the visits I have made to each one of the member countries after taking up my job last January 15, I have proposed to the different actors of each of the Andean Nations, a new Strategic Design for integration, that will enclose the two big agendas that we are now facing: globalization and development. The first, represented by challenging negotiations, which offer significant opportunities associated with the dynamics of the Information Society, as well as the possibilities of access to the most demanding markets, if our countries adopt the decision to compete with processes based on knowledge. The second, as I have already stated, characterized by the persistence of poverty, exclusion and disparity phenomena, that is to say, the historical social gap that our countries still have not been able to resolve and that is eroding democratic governance of the Andean countries, in a context of institutional weakness, fragility of the political system and in general, hostility of the citizens to the State and its policies.

In this perspective, it is very important to focus our actions for Andean integration on the more vulnerable sectors. On one hand, we must return our gaze to the sector of micro, small and medium urban companies which, on average, represent more than 60% of employment in Andean countries; while in countries such as Colombia and Peru they generate 35% and 42% of national production, respectively. However, on the other hand, we are under an obligation to take care of the rural sector of our countries, which involves 30% of our populations. At present, we are designing specific proposals to coordinate efforts in areas of development and competitiveness which could offer these sectors the opportunity to face the new international trade agreements successfully and avoid, by all means, their passive exposure to the effects of an opening which could aggravate the existing social gap.

In this context, the proposal of a New Strategic Design of our integration process looks forward to be an answer of the Andean Community directed to contribute to the closing, gradually but efficiently, of the internal gap and at the same time, encourage an efficient participation of our countries in the different scenarios of hemispheric and global negotiation, as well as a more inclusive international integration that will benefit all our Andean Societies.

As you know, the serious problems of poverty, disparity and social exclusion have already been the main issues of concern of the Andean Presidents in their Ordinary meeting in 2001, held in Valencia, Venezuela. Later, in June of 2003, the Andean Council of Ministers of Foreign Affairs approved in the Quirama Summit meeting, Decision 553 with the guidelines of the Integrated Social Development Plan.

Based on said Decision, technical officials from all the government bodies responsible for the social policies have been formulating a set of concrete proposals for programs, projects and actions to be executed at community level, with the object of complementing and encouraging a rapprochement between national social policies in order to comply with the Millennium Goals approved in the United Nations, and the medium and long-term structuring of a socially united subregional space.

According to the programming now in force, this Integrated Social Development Plan must be agreed between the social authorities of the five countries in the first six months of this year, with a view to its approval in the Andean Presidential Summit Meeting which will be held next July in Cuenca.

Within the framework of the Quirama Summit held in June 2003, the Andean Presidents reiterated said purpose by giving “Maximum priority to the design, coordination and convergence of social policies leading to the development of specific and coordinated strategies of social cohesion, fight against poverty and marginality, that will contribute to the consolidation of democracy and the strengthening of governance in the Andean Community, as well as the generation of wider spaces for the participation of social actors and organizations.”

Other Decisions were also issued In Quirama, which according to the Andean legal system are legally binding upon the member countries, for the establishment of three fundamental socio-laboral instruments, which mark a new stage in the integration process, by gradually establishing the free transit of workers in the sub-regional space, thus guaranteeing them and their dependents their social security, independent of their country of residence within the Andean Community, and ensuring the workers common security and health conditions in their jobs.

In addition, and always within the socio-laboral context, we are able to show some significant progress in the actions announced by the Advisory Council of Ministers of Labor, as well as the Andean Business and Labor Consulting Councils. These three sectors will participate in the new Simón Rodríguez Agreement, with a three-party and equal terms involvement, with the purpose of defining and coordinating the community policies referring to socio-laboral matters. It should be stressed that the recommendations resulting from this Agreement must be adopted by consensus, which will imply developing a high level of coordination effort and vision shared between the three participating sectors.

One relevant aspect, in this context, has been the signing of the Tripartite Draft Agreement for the creation of the Andean Labor Observatory, signed in December 2002 by the President of the Advisory Council of Ministers of Labor and the Presidents of the Andean Business and Laboral Consulting Councils. This initiative seeks to create a fundamental instrument for the analysis, definition and follow up of community policies on socio-labor matters, that will contribute to facilitate the future work of the Simón Rodríguez Agreement and give continuity to the main labor themes in the community area. It becomes fundamental to put this initiative into operation as soon as possible, which will enable us to count on a very useful tool , for which reason, the Economic and Social Council of Spain has offered its generous collaboration.

In the perspective of free trade negotiations, being a specific subject matter of this Seminar, the socio-labor theme is also of significant importance.

In the first place, because Andean integration emerges as a result of a common experiment, as well as shared principles, criteria and rules.

Secondly, because the Andean countries have been capable of coordinating joint positions, establishing legal rules agreed by consensus, and constructing an institutional and legal patrimony that will be extremely useful in negotiations with third parties.

And finally, because the objectives of Andean integration, with regard to socio-labor matters – which we have strengthened recently by means of the aforementioned Decisions– are a reference that must be taken into account in the negotiations.

Summing up, the Andean Community is the common space from which our efforts must be projected and a valuable tool for the global insertion that our countries have undertaken to achieve.

Please allow me to conclude this presentation with two personal reflections:

The first is, necessarily, of a political nature. Each time I am more convinced that Andean society cohesion is undergoing deep political reforms aimed at reconnecting the State with Society, since in our countries the systems and mechanisms in force are being shown to be incapable of responding to the expectations of our population over the democratic system, fundamentally insofar as improving their living standards and their social inclusion is concerned. In consequence, the Andean social agenda must be accompanied in the following months and years by a modernization and strengthening of the representation systems which once again will make the political parties the natural spaces for the dialogue of our citizens with the State, and our National Congresses as the most favorable scenarios for exercising participating democracy.

The second and last reflection, refers to the field of public policies. An ever growing number of politicians, economists and sociologists from our region recognize that the weak relation between economic growth and improvement of well-being is due to, among other determining factors, the concentrated distribution of income and wealth in our societies. The existing means and mechanisms for a more equitable distribution of the benefits of economic growth are scarce and not very efficient. Just as important as economic growth in a dynamic, stable and sustained way, is the gradual correction of the distortion represented by the inequality of income and of opportunities, that prevails in the Andean societies.

In this context, an education enriched in quality and values is absolutely essential and cannot be postponed, not only for social equality but for democracy and economic development. Therefore, we are obligated to concentrate renewed efforts in improving the quality of public education in our countries, as a powerful instrument for overcoming inequality and progress towards better levels of social cohesion.

I am convinced that any actions agreed within the context of the Andean Community, regarding these reflections, would contribute notably to improving living conditions of our citizens and, therefore, the social cohesion and democratic governance of our subregion.

Thank you very much.