Speech by the President of the Republic of Ecuador, Lucio Gutiérrez Borbúa, at the Special Meeting of the Andean Presidential Council (Via teleconference)
Quito (Ecuador) / Cusco (Peru), December 7, 2004

I would like to open by sending you my warmest greetings. I very much regret, Mr. President Alejandro Toledo, my dear friend, not being able to be with you in Cusco at this time. Even so, thanks to telecommunications I have the privilege of being able to share some reflections with you in this Presidential Dialogue on Integration, Development, and Social Cohesion.

The creation and application of a development model of our own for the Andean subregion and South America within the more general context of globalization and free trade was the main subject that arose in Quito and which continues to be the key theme of our deliberations today.

My government, together with the great majority of the Ecuadorian people, are convinced that we need to move from mere economic growth to human development, a concept that has more to do with satisfying mankind’s higher needs --education, nutrition, housing and heath-- than with the bare, indifferent statistics of economic growth.

For that reason, the concerns regarding our own development model should center on several related issues.

In my country’s case, consideration of the long-term viability of the dollarization process and of its impact on product growth and improvements in the people’s living conditions is essential.

I would like to stress here that the issues that most concern the government of Ecuador in regard to human development, are:

- Migration,

- The labor market,

- Gender and wage inequalities,

- The nonexistent increase in productivity,

- Research, and

- Development.

Globalization is an inescapable process and we must necessarily reach that stage with several safeguards or safety nets in place. This means that our countries, in the case of globalization, like that of market opening, should –without fear-- present their own visions on matters of food security, the sustainability of local agricultural economies, and safeguards for their small and medium businesses and/or activities.

I should also like to add here that the foreign debt problem has profound implications for sustainable development. Debt restructuring using global bonds of the year 2000 has become an element of economic strangulation, insofar as serving the social sectors adequately is concerned. For that reason, we must once again rethink, within the context of a harmonious rapprochement with our foreign creditors --considering also their shared responsibility and the countries’ payment capacity-- the proposals put forward in various international forums in which Ecuador has participated, together with all of the region’s countries, in order to find equitable formulas to which the United Nations Secretary General, the World Bank, and the International Monetary Fund will contribute and the world’s industrialized countries give their backing.

At the same time, there is an entire universe of social, political, and environmental problems that must be linked to the discussion of development. These cover aspects ranging from ethnic and gender issues to governance. We, in the Andean countries, for example, have a wealth of biodiversity. For that reason, the regulation of aspects such as policies for the Amazon region, the coordinating of protected areas, and the strengthening and sustainable use of environmental goods and services that come from the ecosystem, are all essential elements for our development.

Ecuador adopts the attainment of the targets for the millennium as the minimum specific starting point for human development. In this connection, we can adopt targets for the development of the region and/or South America that are more ambitious than those provided for in the United Nations commitments, provided they enjoy the support of the international community.

I would like to continue by listing some priorities for our countries’ development strategy:

1. The preparation of a plan to promote human development that is coordinated with the Andean countries. The expected product should be a comprehensive and multifaceted vision of development, whose strategy could be grounded in the following themes: employment (particularly in the macroeconomic sphere), nutrition, health, education, rural development, citizen and food security, and environmental and ecological sustainability.

2. The preparation of actions to diversify production by supporting grassroots micro-undertakings. An interesting alternative to the exclusive nature of the present development model, grassroots micro-undertakings are those that by performing production activities open up new spaces for social interaction.

3. These are experiences that create forms of social enterprise that organize employment, self-employment, cooperative and community efforts in a socially and economically efficient way conducive to the growth of productive innovation within a system that combines social solidarity with cooperative competence.

4. Innumerable local and international experiences offer the opportunity to find certain common patterns that constitute successful cases of inclusive community development.

5. Local development, decentralization with management training in handling projects, and a systematic improvement in sectional administrative structures, together with territorial regionalization, could make a contribution to the countries’ equitable, comprehensive, and orderly development.

6. Improvement in professional qualification levels, including the teaching of foreign languages in order to encourage the inflow of foreign investment, as in the case of the tourist industry, an active exchange of experiences, rational use of installed capacity, and a generous endowment of scholarships and exchanges of in-service training opportunities, would make a decisive contribution toward raising the minimum levels of competence in this sphere.

7. It is essential to study the creation of an anti-crisis or social emergency fund whose purpose would be to guarantee the sustainability of social investment and of the social projects that are underway, particularly those in the areas of nutrition for expectant mothers and their children, healthcare and education, environmental sanitation, etc. , during moments of financial, commercial, or monetary crisis caused by internal or external factors.

8. Fund for changing production patterns. It is a fact that the signing of the Free Trade Agreement with the United States of America will yield benefits for both producers and consumers.

9. Attention should be called, however, to the risk that certain sectors and subsectors could run, particularly those involved in agricultural production, the rural sector, and small and medium industries (sme).

10. For that reason, it is essential to prepare a proposal and a strategy to cope with the impact of the FTA, the FTAA, and the deepening of the free trade area between the CAN and Mercosur, in order to set up a fund for changing production patterns and also to firmly establish, in the respective agreements, safeguard clauses and clauses to overcome para-tariff barriers, together with efficient dispute settlement mechanisms.

11. Those proposals and strategies and the corresponding fund for changing production patterns –given the acute asymmetries that exist within the Andean Community and between the Community and the United States-- are connected with the search for and obtaining of reimbursable and nonreimbursable resources for changing production patterns and specific projects to substantially improve competitiveness and productivity.

These funds should be used to restructure and build up institutions with regard to professional training in areas of interest; the formation of micro and small enterprises; the provision of productive credit lines with low interest rates; research and development efforts at centers of higher education on lines of activity in keeping with the comparative advantages that exist, so that the Andean countries can develop competitive advantages; together with the exchange of successful experiences at the level of the subregion itself. An example could be the way to make rational use of the subregion’s enormous biodiversity.

12. The Andean countries have produced several measurements of existing poverty and inequality over the past decade. Poverty maps are available, but little has been accomplished toward understanding the economic and social mechanisms that generate and produce that poverty and inequality.

13. The asset redistribution processes could be useful for that purpose, because there is not enough research into how successful Andean entrepreneurs evolve; or how their legitimate wealth is made or how other original forms of enterprises are created that provide jobs and wealth to groups and subgroups, particularly in the rural area, where the largest potential for development lies, including that offered by agribusiness and ecotourism.

14. A true debate must be opened about the asset concentration processes (about how land and redistribution processes operate, for example).

15. The leaders of our countries, both in the CAN and in the South American Community, must demand compliance with the commitment approved in March 2002 by the developed countries, to make a significant increase in development aid and to make better use of existing resources and of the agendas and meetings of the World Bank and the IMF in order to look more carefully into the proposal put forward by the United Kingdom to create an international financial facility for raising development funds to be used to halve the levels of poverty and of child mortality and to ensure universal education.

I wanted to share these reflections with you and, in that way, to contribute to the interesting discussion started in Quito at the memorable Fifteenth Andean Presidential Summit in July of this year and continuing today in the city of Cusco, the very cradle of Andean culture and to whose inhabitants I pay my most reverent tribute from here.

Thank-you very much.