Address by the Secretary General of the Andean Community, Ambassador Allan Wagner Tizón, at the inauguration of the special meeting of the Andean Presidential Council
Cusco, December 7, 2004

I would like to open today by conveying the greetings of the Andean Community General Secretariat to President Toledo, as Chairman of the Andean Presidential Council, and to the Presidents, Foreign Ministers and Ministers of the Member countries who are present today and to join in the welcome President Toledo has just extended to the representatives of the three countries that accompany us on this occasion: Panama, that recovers its place in the Andean Community, Mexico, that was admitted as an observer, and to the President of Chile for this fraternal return to our Community.

Messrs. Presidents, as you may recall, this special meeting of Andean Presidents has been summoned in response to the intense and fruitful Presidential exchange of opinions that took place at the Regular Summit of the Andean Community on July 7 in Quito, where you, Messrs. Presidents reached the conclusion that while the economy is growing, employment is lagging behind, worsening existing social problems and placing democratic governance in jeopardy.

It was decided at that time to probe more deeply into the issue so that we can find development models and options that center more closely on our own potentialities. In order to comply with that mission, the Andean Development Corporation, represented here by its Executive President, Enrique García, and the Andean Community General Secretariat have prepared a document that offers several points for consideration in the Presidential dialogue.

This document is broken down into four areas: first, Development and competitiveness; second, Social cohesion; third, Political and institutional aspects; and fourth, Regional integration and increasing our international trade presence. This effort is intended to provide some elements that can contribute to the Presidential dialogue. The President of the CAF will tell us shortly, in this same vein, about a study prepared in great depth by the CAF on a new vision of regional development.

We have two other, highly important, contributions to offer this meeting: the document prepared by Dr. José Antonio Ocampo, United Nations Under-Secretary-General for Economic Affairs, entitled “Tres ideas esenciales para repensar el desarrollo de América Latina” (Three essential ideas for rethinking Latin American development) and also the document that the Executive Secretary of ECLAC has given us, entitled “El renovado papel del Estado en la orientación de la estrategia de desarrollo e inserción internacional de la Subregión andina” (The State’s renewed role in orienting the strategy for development and increasing the trade presence of the Andean subregion). I would like to thank both of these eminent persons for their contributions.

As regards the subjects to be discussed, I would like to cite some of the idées force set out in this document on elements for the discussion that we have prepared jointly with the CAF.

Under the subject, Development and competitiveness, which the President of the CAF will address more fully, what has emerged –and which is also reflected in the presentations of Presidents Uribe and Gutiérrez-- is that a new Andean and Latin American consensus on development is taking shape. A key element that we should consider is that this consensus, while maintaining the policies of macroeconomic stability and market opening should, at the same time, seek new development visions incorporating the major social sectors through active policies and, similarly, new visions of territorial development that will make it possible to target development efforts.

The social inclusion being sought may be attainable through these socially inclusive approaches targeting territorial areas, obviously without neglecting the importance of improving the quality of social spending while expanding the State’s social services.

At the same time, this would make it possible to develop a competitiveness, but one that is inclusive –in other words, the competitiveness of the large production chains or corporate undertakings, but encompassing also our countries’ large social sectors.

Another aspect that we could address is how the Andean Community, as an energy center, can make that energy center a nucleus for South America’s cohesion. There is a need in South America not only to develop the infrastructure aspects of the IIRSA program, but also to nourish those new veins of South American integration and the role that energy can doubtlessly play is absolutely fundamental. This contribution that the Andean Community can make to the building of the South American Community is essential.

The issue involved with regard to social cohesion is basically the need to seek better coordination between economic and social policies. This is the proposal that also emerged from the Andean Conference on Employment held a few days ago in Lima, with the attendance of our countries’ Ministers of Labor and of Finance.

This is the second key idea: how to make economic policies encompass elements that will allow us to reach social targets, in order to keep the economy from going its own way, with the result that social targets cannot be met. A coordinating element between these economic and social policies is decent employment –productive, socially sustainable, and, at the same time, stable employment, as the ILO advocates.

It is also here, in regard to this element, that a new social pact should be made, a new understanding between the different sectors of society and the State, in such a way that society and the State can provide the means of support for this socially cohesive and inclusive development. This means, at the same time, creating the financing mechanisms that will make it possible to advance these strategies and policies for structural development and social cohesion.

In short, social cohesion, coordinated economic and social policies, creation of decent employment, and inclusive development.

What emerges from the work we have done in regard to institutional policies is the need to build up and, at the same time, recreate the State –a new democratic or sustainable State, as President Uribe termed it at the Quito Summit, that will be capable of sustaining and advancing socially equitable economic growth and, as a result, of reinforcing social cohesion and ensuring democratic governance.

This new, richer, more inclusive, more participatory concept of State is also undoubtedly one of the basic tasks ahead of us. This means building up democratic institutions and, particularly, the political system, including political parties, reinforcing the Constitutional State and later moving to strengthen the mechanisms for building social consensus to ensure that the building of a new, more democratic and supportive State can move ahead.

To conclude, Messrs. Presidents, what emerges in regard to regional integration and increasing our international trade presence is that integration is not just one more option for internationalization, but, rather, a precondition for achieving inclusive development and increasing a quality trade presence –in other words, that will help to close the social gap with our countries’ masses.

The CAN still has an important potential contribution to make in this area if can just incorporate these new concepts of more inclusive development, with new visions of social sectors and territorial spaces, into our integration agenda.

Precisely what the South American Community offers, as President Toledo stated in his introductory words, is the possibility for a major decentralized development program. The possibility for the remote regions of our countries, which suffer the effects of their centralism and, as a result, are condemned to economic decline, to find, through the South American integration hubs and of the dynamic forces unleashed by free trade in the region, opportunities to create decentralized regional economies that would also be economies of small and medium-sized enterprises –in other words, an inclusive, but also internationalizing, development program because these large decentralized regional conglomerates will not only look inward, but will also move toward the large world markets.

The internationalization process –as President Uribe has said-- is part of a development process that is coordinated also with internal development, with this vision of inclusion. The South American Community offers an exceptional opportunity in this connection, for it constitutes quality and socially inclusive decentralized development and, at the same time, an enormous instrument for reinforcing our increasing trade presence.

These then, Messrs. Presidents, are the central ideas that emerge from the preparatory study we have prepared with the Andean Development Corporation and that we are submitting for your consideration as elements that could prove to be useful for our discussions.

Thank you very much.