Final Report on the Meeting on macroeconomic dynamics in Latin America and the Caribbean and their implications for regional economic integration

Transcription

1 Sistema Económico Latinoamericano Latin American Economic System Sistema Econômico Latino-Americano Système Economique Latinoaméricain Final Report on the Meeting on macroeconomic dynamics in Latin America and the Caribbean and their implications for regional economic integration XXXI Regular Meeting of the Latin American Council, Venezuela 21 to 23 November 2005 SP/CL/XXXI.O/Di No. 8-05

2 Copyright SELA, October All rights reserved. Printed in the Permanent Secretariat of SELA,, Venezuela. The Press and Publications Department of the Permanent Secretariat of SELA must authorize reproduction of this document, whether totally or partially, through The Member States and their government institutions may reproduce this document without prior authorization, provided that the source is mentioned and the Secretariat is aware of said reproduction.

3 SP/R-DMALCIR/ DF- 05 C O N T E N T S RAPPORTEUR S REPORT 3 Opening Session 3 Development of activities 3 Conclusions 5 ANNEX I: SPEECHES 7 Ambassador Carmen Gabriela Menéndez Area Coordinator, Acting Permanent Secretary of SELA 9 ANNEX II: WORK PROGRAMME 13 ANNEX III: LIST OF DOCUMENTS SUBMITTED 17 ANNEX IV: LIST OF PARTICIPANTS 21

4 RAPPORTEURS REPORT 3 1. The Meeting on the Macroeconomic Dynamics of Latin America and the Caribbean, and Integration, organized by the Permanent Secretariat of SELA, was held in, on 15 and 16 September Delegates from the following Member States participated at the meeting: Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Guatemala, Haiti, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela. Participants also included representatives of regional and international organizations such as the World Bank, Andean Development Corporation (CAF), the Andean Community (CAN), the Economic Commission for Latin America and the Caribbean (ECLAC), the United Nations Development Programme (UNDP), the Secretariat for the General Treaty on Central American Economic Integration (SIECA), academic institutions, international consultants, and officials of the Permanent Secretariat of SELA. The list of Participants is included in Annex 4. Opening Session 3. Ambassador Carmen Gabriela Menéndez, in charge of the Permanent Secretariat of SELA, opened the meeting, warmly welcomed the participants, and underscored the importance and transcendence of the event. The text of her speech is included in Annex No. 1. Development of the work 4. The participants adopted the Work Programme, which is included in Annex No The meeting was based on the document entitled Analysis of macroeconomic dynamics in Latin America and the Caribbean and its implications for regional economic integration. Current situation and prospects for macroeconomic coordination, prepared by consultants Dr. Christian Ghymers, Head Specialist of the European Commission, and Dr. Carlos Quenan, Professor at the Institute for High Studies on Latin America of the Sorbonne University, who presented a thorough discussion on the content, essential aspects, and conclusions of the study. Horacio Aguirre, Head Specialist of the Central Bank of the Republic of Argentina, and Edgar Chamorro Marín, Consultant for the General Secretariat of SIECA, made comments on the document. 6. The program included a group of presentations on the subject, which are available on SELA s Web site, the titles and other references are included in Annex N Both Dr. Horacio Aguirre, Head Specialist of the Central Bank of Argentina, as well as Dr. Edgar Chamorro, Consultant for the Permanent Secretariat of the General Treaty on Central American Economic Integration (SIECA), acknowledged the technical strictness of the document presented by the Permanent Secretariat, and backed many of the proposals contained therein. However, both mentioned some practical difficulties that the macroeconomic coordination experience has had in Latin America and the Caribbean. Dr. Horacio Aguirre also mentioned some concerns about the viability and rationality of coordinating between sovereign countries, which were addressed by the consultants (authors of the document) during the debate. Likewise, some of the participants asked questions to the authors and commentators on specific aspects of macroeconomic coordination among Latin American and Caribbean countries, among

5 Permanent Secretariat of SELA 4 them: i) the feasibility of advancing macroeconomic coordination among our countries, given the present world and regional economic situation; ii) the relationship between national sovereignty and the degrees of supra-nationality that may imply the coordination of policies; and iii) the possible relationship between the marginal insertion of Latin American and Caribbean economies in international financial markets, and the possibilities of moving forward in the macroeconomic coordination between the nations of the region. These and other issues were discussed at the end of this first working session. During the second session, the works of the Economic Commission for Latin America and the Caribbean (ECLAC), by Dr. Rodrigo Cárcamo-Díaz, and of the Andean Development Corporation (CAF), by Mr. José Pineda, specialist from the Studies Department of that entity, were presented. The ECLAC representative stressed the important role of technical and political dialogue between national and regional authorities, to make real advances in macroeconomic coordination, whereas the presentation by CAF dealt with several aspects of the trends towards economic convergence within the context of the Andean Community of Nations. The presentation by ECLAC underscored some of the most relevant aspects of the experiences of the Macroeconomic Dialogue Network (REDIMA) which was carried out in the region under the direction of that United Nations body, together with the three sub-regional integration secretariats (CAN, SIECA and MERCOSUR), and with the support of the European Commission. On the other hand, the presentation by CAF offered some facts regarding the trends towards convergence, specifically the levels of entry of CAN nations in the past years, and underscored an evident trend towards greater degrees of differentiation within member states of the Andean integration scheme. There was a dialogue following these presentations, where among other things, the following were discussed: i) the convenience and composition of different instances for dialogue between economic policy authorities, ii) the causal relationship between the advances made in commercial and financial integration within CAN, and the observations made by CAF on the convergence between countries and within the countries of that community of nations, and iii) the need to consider other factors not only economical to explain developments regarding integration as well as the trends towards regional convergence or non-convergence. The morning work session of September 16 focused on the presentation and debate of the experience of the Andean Community of Nations (CAN) and of the Permanent Secretariat of the General Treaty on Central American Economic Integration (SIECA) on macroeconomic coordination. Although the representatives of both integration organizations highlighted the agreements, the legal provisions, the existing bodies, and the progress achieved on the coordination of economic policies between Member States, they recognized that there is much to be done to reach the higher levels of coordination required to move forward in economic integration. The debate underscored issues regarding the divergence of foreign exchange regimes between CAN member states and its effects on macroeconomic coordination, and noted that in the Central American case, the present priorities of the integration scheme the impact of the free trade agreement signed with the U.S. on integration, the need to deepen the customs union, the need to strengthen the fight against poverty to guarantee the democratic governance of its nations, and the sharp consequences of the increase in the price of fuel modified the context in which the macroeconomic coordination between the countries of this subregional integration organization is going to occur. Trade

6 8. Conclusions 5 The following conclusions emerged from the presentations and debates: 1. Regional integration processes, which were booming throughout most of the 1990s, experienced the blow of the crisis and its dynamics weakened at the end of the last decade and beginning of the present one. Thus, a debate has started on the need to conceive the regional integration process as the result of an institutional construct that favors cooperation between member states, helps reduce poverty and economic instability, and helps sustain economic growth. 2. An important element is collaboration and some form of macroeconomic coordination among the sovereign authorities of the region, in order to go beyond a free trade agreement and deepen regional integration. However, it must be stated that some governments are concerned by the possible limitation of the capabilities of national authorities to autonomously define and implement policies in specific economic areas. Therefore, it is necessary to continue analyzing the obstacles that must be overcome, and the necessary conditions for the initiatives in this matter to be effectively promoted by the countries of the region. This implies, among other things, studying the characteristics of economic, financial and commercial independence between the economies of Latin America and the Caribbean, specifically within their historical, political, and social context. 3. Taking into account the historical cooperation that exists between Latin American and Caribbean countries, and the challenges that integration and its present schemes face, it is convenient to consider expanding the present approaches with a technicalmultidisciplinary scope. The document presented at this meeting strives to contribute to this discussion, to move forward in the initiatives to deepen integration, taking into consideration the economic situation of our countries, and provides suggestions that could make regional and sub-regional sustainable growth viable, within the framework of greater citizen participation. 4. Latin American and Caribbean countries have an important advantage in the area of cooperation and macroeconomic convergence: all the integration sub-regions already have although in different degrees and sometimes incompletely the minimal institutional mechanisms to launch cooperation initiatives among its members and make decisions at the sub-regional level to foster macroeconomic convergence. 5. This cooperation dynamics imply a progressive learning process, available to all the subregions through an effective dialogue between the high level technicians from macroeconomic monitoring entities, in charge of national policies. 6. The Permanent Secretariat of SELA will make the information from this meeting available as a contribution to the regional consultation process, and will support the exchange of experiences in this respect.

7 7 A N N E X I S P E E C H E S

8 9 OPENING SPEECH BY AMBASSADOR CARMEN GABRIELA MENÉNDEZ AREA COORDINATOR, ACTING PERMANENT SECRETARY OF SELA

9 Distinguished representatives of the Member States of SELA Appreciated colleagues from several international organizations Special guests Consultants Staff of SELA Professionals from the mass communication media here present Ladies and Gentlemen 11 On behalf of the Permanent Secretary of the Latin American Economic System, Ambassador Roberto Guarneri, who is in official mission at the 60th General Assembly of the United Nations, I warmly welcome you to this specialized meeting of vital importance to the Member States. The Permanent Secretariat of SELA is pleased to hold this technical meeting that starts today and will end tomorrow, which will reflect upon the important issue of macroeconomic coordination among Latin American and Caribbean countries. As gathered in the originating project, one of the characteristics of economic evolution in Latin America and the Caribbean is the existence of marked structural differences in the macroeconomic dynamics of the region s nations. In terms of economic evolution, these differences have many explanations, as well as several forms of expression. Regarding the economic performance, these differences establish diverse conditions to face negative external impacts, and to assume commitments of external opening in order to fulfill the goals of integration at the sub-regional or regional level. This is relevant, if we think that it is strongly related to integrationist dynamics, and is directly related to the possibilities of making real advances in regional economic integration. It cannot be denied that as integration processes develop, countries tend to be increasingly independent, and both economic cycles as well as the policies implemented in each of the neighboring States have an impact in the performance of the other partners, through real or financial channels. Therefore, to make advances in some type of coordination of macroeconomic policies seems like a way to internalize the effects of reciprocal interrelations in the decision making process of each economy. Therefore, in the present conditions it is a priority to identify and analyze the obstacles that must be overcome, as well as to foster the conditions necessary for macroeconomic coordination initiatives in Latin America and the Caribbean to be effective and longlasting. We consider that this programmatic effort, pioneer in this area, and organized by the Permanent Secretariat of SELA in the fulfillment of its Work Programme for 2005, is essential not only for the future work of the organization, but also to walk towards the desired integration of the region. Some of the most important objectives of this event are to carry out a diagnosis of the recent macroeconomic dynamics of Latin American and Caribbean countries, and to analyze the main experiences gathered on macroeconomic coordination in the past years. Another goal is to explore proposals for mechanisms to optimize macroeconomic coordination, both in sub-regional as well as regional integration schemes.

10 Permanent Secretariat of SELA 12 Trade We are aware that this issue is an essential part of the analytical efforts conducted by the several Secretariats of integration schemes in Latin America and the Caribbean at the subregional level. However, SELA, given its experience and prestige, and above all, because of its mandate, must play a relevant and significant role as a forum for meetings and a space for its broad membership to reflect upon this issue together, as well as to encourage the analysis of macroeconomic coordination experiences in our countries. As we advance in these discussions, the differentiated contribution of SELA will be evident, as it intends to gradually become a useful forum to foster a true technical exchange of experiences, without any hint of negotiation, to reduce uncertainty and mistrust, and work towards the development of a community culture and a group task. We are committed to creating agreements and synergies, without duplicating efforts. Heralding success for this meeting, with positive results that will open up a more promising future for Latin America and the Caribbean, we ratify our gratitude to all the participants here today, particularly consultants Christian Ghymers and Carlos Quenan, who prepared the base document for this debate, as well as to all the officials of the various international organizations present who will actively participate and guide the discussions. Today, September 15, as you all know, another independence anniversary is celebrated in Central America. Therefore, I wish to excuse the participants of those Member States: Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, who are now leaving to participate in commemorative acts for such significant dates. Likewise, we join the joyful expressions of all the Mexicans in celebrating their Proclamation of Independence. Many congratulations on these celebrations. Thank you.

11 13 A N NE X II WORK PROGRAMME

12 Thursday, 15 September 15 Morning 08:30 a.m. 09:00 a.m. REGISTRATION 09:00 a.m. 10:00 a.m. OPENING SESSION 10:00 a.m. 10:15 a.m. Break Opening address by Ambassador Carmen Gabriela Menéndez, Area Coordinator, Acting Permanent Secretary. 10:15 a.m. 11:00 a.m. SESSION I Moderator: Antonio Romero, Area Coordinator, Permanent Secretariat of SELA Presentation of the document entitled Analysis of the macroeconomic dynamics of Latin America and the Caribbean and its implications for the regional economic integration. Current situation and prospects in the area of macroeconomic coordination Christian Ghymers, Main Specialist, European Commission Carlos Quenan, Professor, Institut des Hautes Etudes D Amerique Latine, Sorbonne University 11:00 a.m. 11:30 a.m. Comments on the document a.m. 12:30 p.m. Discussion Afternoon 02:30 p.m. 03:30 p.m. SESSION II Horacio Aguirre, Main Specialist, Central Bank of the Republic of Argentina Edgar Chamorro Marín, Adviser of the General Secretariat - SIECA Moderator: Horacio Aguirre, Main Specialist, Central Bank of the Republic of Argentina Rodrigo Cárcamo-Díaz, Economic Commission for Latin America and the Caribbean (ECLAC) José Pineda, Andean Development Corporation (CAF)

13 Permanent Secretariat of SELA 16 Trade 03:30 p.m. 03:50 p.m. Break 03:50 p.m. 05:00 p.m. Discussion Friday, 16 September Morning 09:30 a.m. 10:30 a.m. SESSION III 10:30 a.m. 11:00 a.m. Break 11:00 a.m. 12:30 a.m. Discussion Moderator: Germán Ríos, Vice Presidency for Development Strategies, Andean Development Corporation (CAF) Presentation by representatives of Subregional Integration Organizations Edgar Chamorro Marín, Adviser of the General Secretariat (SIECA) Ximena Romero, Projects Manager for Harmonization of Macroeconomic and Financial Integration Policies (CAN) 12:30 p.m. 01:30 p.m. Discussion and approval of the Summary and Conclusions of the meeting 01:30 p.m. Reception

14 17 A N N E X II LIST OF DOCUMENTS SUBMITTED

15 19 Working Documents (DT): DT Nº 1 Provisional Work Programme Informative Documents (Di): Di Nº 1 Di Nº 2 Di Nº 3 Di Nº 4 Di Nº 5 Di Nº 6 Analysis of the macroeconomic dynamics of Latin America and the Caribbean and its implications for the regional economic integration. Current situation and prospects in the area of macroeconomic coordination Macroeconomic Harmonization in the Andean Community, Ximena Romero, CAN La dinámica de convergencia en la Comunidad Andina de Naciones, José Pineda, CAF Convergence Dynamics in the Andean Community, José Pineda, CAF Analysis of the macroeconomic dynamics of Latin America and the Caribbean and its implications for the regional economic integration. Current situation and prospects in the area of macroeconomic coordination, Christian Ghymers (European Commission), Carlos Quenan (Paris University) Macroeconomic Policy Coordination in Latin America: The Role of Dialogue, Rodrigo Cárcamo-Díaz, ECLAC Di Nº 6/Add Macroeconomic Coordination Policies in Latin America: The role for dialogue, Rodrigo Cárcamo-Díaz, ECLAC Di Nº 8 Di Nº 7 Provisional list of participants Comments on the activity Analysis of the macroeconomic dynamics of Latin America and the Caribbean and its implications for the regional economic integration. Current situation and prospects in the area of macroeconomic coordination, Horacio A. Aguirre, Central Bank of the Republic of Argentina.

16 21 A N N E X III LIST OF PARTICIPANTS

17 23 BOLIVIA Freddy Abastoflor Córdova Minister Counsellor Embassy of Bolivia in Venezuela Tel.: // BRAZIL María Ercilia Murakami Chargé d Affaires, a.i. Embassy of Brazil in Venezuela Tel.: / brasembcaracas@cantv.net CHILE Juan Pablo Espinoza Jara Third Secretary Embassy of Chile in Venezuela Tel.: echileve@cantv.net COLOMBIA Patricia Dávila de Navas Coordinator of Multilateral Economic Affairs Ministry of Foreign Affairs Tel.: (57-1) Ext patricia.davila@minrelext.gov.co Patricia Cortez First Secretary Embassy of Colombia in Venezuela Tel.: // embvenez@net-1.net CUBA Marcos Nieto Lara Economic Counsellor Embassy of Cuba in Venezuela Tel.: / embajadorcubavzl@cantv.net ECUADOR Verónica Peña Second Secretary Embassy of Ecuador in Venezuela Tel.: / embajadordeecuador@cantv.net Julieta Bolek Civil Attaché Embassy of Ecuador n Venezuela Tel.: / embajadordeecuador@cantv.net GUATEMALA Verónica Araujo Minister Counsellor Embassy of Guatemala in Venezuela Teléf: / embaguat@cantv.net HAITI Antoine H. Eliacin Counsellor Embassy of the Republic of Haiti in Venezuela Teléf: / aeliacin115@hotmail.com MÉXICO Antonio Pérez Manzano Minister Embassy of Mexico in Venezuela Tel.: aperez@embamex.ve NICARAGUA Arturo Gurdián Minister Counsellor Chargé d Affaires (a.i) Embassy of Nicaragua in Venezuela Tel.: / embanic@cantv.net

18 Permanent Secretariat of SELA 24 PANAMA Cecilio E. Simon Chargé d Affaires a.i. Embassy of Panama in Venezuela Tel.: PARAGUAY Enrique Jara Ocampos Minister Embassy of Paraguay in Venezuela Tel.: ejara01@hotmail.com embaparven@cantv.net Cristian Leguizamón Báez Second Secretary Embassy of Paraguay in Venezuela Tel.: embaparven@cantv.net PERU Edwin Luis Gutiérrez Padrón Minister Embassy of Peru in Venezuela Tel.: embaperu128@cantv.net Javier Yépez Verdeguer Counsellor Embassy of Peru in Venezuela / embaperu124@cantv.net DOMINICAN REPUBLIC Jaime Durán Hernando Ambassador Embassy of the Dominican Republic in Venezuela Tel.: / embajadominicana@cantv.net Trade Gustavo Wiese Minister Counsellor Embassy of the Dominican Republic in Venezuela Tel.: / embajadominicana@cantv.net amezquitafelix@hotmail.com Félix Bolívar Amézquita Minister Counsellor Embassy of the Dominican Republic in Venezuela Tel.: / embajadominicana@cantv.net URUGUAY Ruth Aramburu Counsellor Embassy of Uruguay in Venezuela Tel.: uruvene@cantv.net VENEZUELA Rafael Quevedo Minister Counsellor Head of the Economic Analysis Unit General Division of Economy and International Cooperation Ministry of Foreign Affairs of the Bolivarian Republic of Venezuela Tel.: rjquevedo@hotmail.com Suraya Tayrouz Coordinator III Ministry of Foreign Affairs of the Bolivarian Republic of Venezuela Tel.: surayath@yahoo.es Vladimir López Economic Specialist Vice Presidency of Studies Central Bank of Venezuela Tel.: vlopez@bcv.org.ve

19 Ana Mercedes Castellanos Technical Coordinator of Internacional Affairs Central Bank of Venezuela Tel.: Jesús M. Carrillo Romano Economist Internacional Relations Office Central Bank of Venezuela Tel.: D) / jcarrill@bcv.org.ve ORGANIZATIONS CENTRAL BANK OF ARGENTINA Horacio Aguirre Main Specialist General Sub Management for Economic Research Central Bank Buenos Aires, Argentina Tel.: (5411) haguirre@bcra.gov.ar WORLD BANK Pedro Ravelo Economic Consultant Tel.: praveloluciani@worldbank.org CAF Germán Ríos Main Economist Andean Development Corporation Tel.: grios@caf.com CAN 25 Ximena Romero Projects Harmonization Manager for Macroeconomic and Financial Integration Policies Lima, Peru Tel.: (51-1) xromero@comunidadandina.org Rodrigo Alejandro Oicatá Intern at the CAN Lima, Peru Tel.. (51-1) alejandro_oicata@yahoo.es ECLAC Rodrigo Cárcamo-Díaz Economic Affairs Official Economic Commission for Latin America and the Caribbean Santiago de Chile Tel.: (562) rodrigo.carcamo@cepal.org UNDP David McLachlan-Karr Resident Coordinator of the United Nations Systems in Venezuela and Resident Representative of the UNDP Teléf: david.mclachlan-karr@undp.org SIECA Edgar Chamorro Marín Adviser of the General Secretariat Permanent Secretariat of the General Treaty of Central American Integration, Guatemala, Guatemala Tel.: (502) chamorro@sieca.org.gt José Pineda Main Economist Andean Development Corporation Tel.: jpineda@caf.com

20 Permanent Secretariat of SELA 26 CONSULTANTS Carlos Quenan University Professor Universidad de La Sorbona Nouvelle 22, Avenue Maurice Thorez Ivry-Sur-Seine Tel.: (33-1) Home: (331) Celullar: (336) Christian Ghymers Consultant European Commission Brussels, Belgium Tel.: (32-2) (habit) Tel.: (32-2) (Ofic) INSTITUTIONS Xavier Quintero Specialist Petróleos de Venezuela Tel.: Gustavo Mata Degree in Political and Economic Science - University of California, Berkeley, Ca. Tel.: Celullar: (0414) gmata82@yahoo.com David Padrón Director Los Andes University in Tel.: /92 otirula@reacciun.ve Trade Sary Levy Professor Economic and Social Research Institute (IIES) Central University of Venezuela (UCV) Office Tels.: (212) / Home Tel.: (212) / Cellular saryle@yahoo.com; econofin@cantv.net Carlos Vásquez Adviser / Professor Universidad Metropolitana and VEPROX - PDVSA Venezolana Promotora de Bienes y Servicios Petroleros Tel.: Cellular: (0416) vasquezca@telcel.net.ve cvasquez@unimet.edu.ve David Figuera Student UCV Urb. El Picacho, Res. Tresol Hills Torre B, Apto. 6-A San Antonio de los Altos, Venezuela Tel.: // david4561@cantv.net María del Carmen Díaz Naranjo Research Assistant UCV Postgrado de Hidrocarburos Tel.: mdcaznaranjo@yahoo.com Tony Barrios Executive Director VEPROX, A.C. Tel.: // veprox@cantv.net; venprox@yahoo.com

21 27 LATIN AMERICAN ECONOMIC SYSTEM (SELA) Carmen Gabriela Menéndez Area Coordinator Acting Permanent Secretary Tel.: Antonio F. Romero Area Coordinator Tel.: Telasco Pulgar Head of Projects Tel.: Fernando Guglielmelli Head of Operations and Protocol Tel.: Javier Gordon Head of Projects Tel.: Saadia Sánchez Head of Projects Tel.: Alicia Borga Projects Assistant Tel.: Carlos Ortuño Projects Assistant Tel.: