Address by the President of the Republic of Peru, Alejandro Toledo, at the inauguration of the special meeting of the Andean Presidential Council

Cusco, December 7, 2004

I welcome you all to the heart of this legendary Cusco and sincerely hope this environment will inspire us for the two days we are here. You and I, together, are going to breathe history that we are deeply proud of.

I would like to welcome you to this special meeting of the Andean Community on behalf of the women and men of Peru, and to underscore the presence, as observers, of the Presidents and the representatives of Mexico; of our friend, Ricardo Lagos, President of Chile, and of the representatives of Panama. Once again, we welcome you most warmly.

We were gathered here last year, at the Summit Meeting of the Rio Group, where we also reflected on Latin America, its past, the challenges of the present, and those of the future. Today, on behalf of Eliane and in my own name and that of my government, I wish to thank you for being present, Messrs. Presidents and Messrs. Representatives.

We appreciate your accompanying us at this meeting of deep reflection that is so important to our future: Mexico, for being present as an observer, Panama, for having resumed its participation in the highest-level Andean bodies, and our neighbor and friend, Chile, for returning to your Andean brothers after an absence of several years.

The truth is that these are promising signs for Latin American integration. The purpose of our meeting today is to reflect on a model of development and integration tailored to the potentials of the Andean nations and including a vision of territorial development and the building of sustainable states in the subregion.  

In a context of economic growth and an increasing trade presence, our countries need long-term social policies that will reinforce social cohesion and democratic governance. .

This long term, brothers and sisters, begins today. We need to take a look at the social investment strategies as a whole in order to improve the quality of spending and oversee the implementation of social programs. Only in that way, and by linking our social positioning to the goals and indicators of each state, will we be able to reduce poverty and exclusion. Integration is meaningful only if it accompanied by social inclusion resting on the premise of mutual respect for our cultural diversity.

After thirty-five years of existence, the Andean process shows signs of undeniable progress, such as the consolidation of an economic market that is moving toward an enlarged market through which people, goods, services and capital will circulate freely.  

We cannot fail to recognize, however, that these accomplishments, while important, have not been reflected in concrete results for the Andean people on foot. Do not take this as a reproach, for I am filled with enthusiasm for the challenge of the future, because today is a new dawn.

The poverty rate in the Andean subregion continues to remain at a level of approximately 53% of the total population. Side-by-side with that poverty are high levels of inequality and social exclusion, all of which, together, pose a serious threat to governance, for they strike at the very roots of our democratic systems –their legitimacy.

I am saying this merely to strike a note of caution. By bringing inflation under control and reducing the public deficit, our countries have achieved macroeconomic stability in recent years.  

With strict fiscal discipline –which should constitute the starting point for reaching higher levels of development and of poverty reduction-- the Andean countries have been able to show steady growth of 4%, on average. Even so, poverty continues to proliferate and it bears the face of a woman, a child, an aged person. Inequality still exists, exclusion cannot be avoided, unemployment and underemployment continue to pose a challenge. 

My friends, we are lagging seriously behind in the distribution of economic growth. In actual fact, this growth is not sufficient, but to grow at higher rates, we must first focus our macroeconomic policies on promoting the most competitive sectors, like the small enterprises, medium industries, and tourism. These are labor-intensive sectors that make us less vulnerable to the fluctuations in external prices, like those of minerals in the international market.  

This dialogue has been broken down into four sections, in accordance with the themes addressed in the Quito Presidential dialogue: development and competitiveness, social cohesion, political and institutional aspects, and regional integration and our increased trade presence.  

I would like our discussion to be as informal as possible so that our exchange of viewpoints can delve more deeply into the issues and go beyond protocol to the private terrain. We are not going to reach earth-shaking agreements. I would like to ask the Foreign Ministers not to worry so much about reaching agreements for the record. We will make a summary of what we decide, but let us give it content and analysis; let us put our hearts and souls into this meeting.  

We must develop our capacity for competing; otherwise, our trade liberalization will only serve to firmly establish our dependency and to broaden even further the existing social differences. That is why quality investment in physical infrastructure is so crucial, why educational, labor training, production chain, and environmental policies are so necessary.

My friends, the lack of social cohesion threatens and damages the governance of the Andean subregion. For that reason, we must consider the need to guarantee a sound institutional environment and greater political stability. We propose consolidating our political systems so that we can build social democracies and modern and democratic institutions open to promoting the participation of the citizens.

My friends, we are gathered here in Cusco, in these history-filled premises, charged with power to look toward the future. We are, in effect, a few short hours away from the advent of a historical event; we are on the threshold of the birth of the South American Community of Nations.

This new Community is the logical and progressive continuation of the Andean Community and of MERCOSUR, combined with the integration efforts of Chile, Guyana, and Suriname. We are on the verge, after 180 years, of making Bolívar’s dream a reality. We will do so through unswerving political action and concrete acts.

It is an indisputable fact that the birth of the South American Community is the greatest integration and development undertaking of our South American history. Tomorrow we will start to redraw the face of South America. It will not be a formal political act without importance, but a unique opportunity for the decentralized development of our countries through the creation of regional economies complemented by the free trade agreements that the subregional organizations have just reached and that will have an immediate impact on areas that today are vulnerable to poverty and exclusion.

These are our aims and desires for today. These are hours filled with emotion and the determined political will of the leaders of the Andean Community and of MERCOSUR to redraw that face of South America. We must take heart and work together so that future generations will inherit the concrete results of our nations’ political determination to achieve integration and development. 

Thank-you very much for coming to the capital of the Inca Empire. Thank-you for accepting our invitation. May God guide our actions because our decision has been made. May God bless the Andean Community and the South American Community.  

Thank-you very much.