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Latin American Relations - Otto J. Reich

Latin American Relations

Ambassador Otto J. Reich, Assistant Secretary for Western Hemisphere Affairs Remarks to Miami Herald Americas Conference Washington, DC October 15, 2002


Thank you, Juan (Vasquez,) for that generous introduction. I would like to thank the Miami Herald for organizing this conference. The Miami Herald has been instrumental in bringing the issues confronting the Western Hemisphere to the attention of the American public through its journalistic efforts and important conferences such as this one.

I would like to share with you a bit about where we are in Latin America and where I think we ought to be headed. On this trip and other trips to the region, I've encountered a perception which I think needs to be addressed, that the United States is not sufficiently engaged with our partners in the hemisphere. In my view, this perception is not only untrue... it is impossible.

My message is that the United States is engaged in Latin America per force of our historical circumstances and by design. First, we are bound together by shared values. There is now a consensus in the Americas in favor of democratic government. This consensus began to emerge more than 20 years ago.

In the late '70s, only about a quarter of the people of Latin America enjoyed some form of democratic government. Today all the nations have elected governments except Cuba. We are becoming a community of states based on this common belief, as was codified in the Inter-American Democratic Charter that establishes democratic government as the birthright of all citizens of this hemisphere.

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By coincidence, that charter was signed in Lima, Peru on September 11, 2001, just as the attack on the United States was taking place. Secretary of State Powell stayed in Lima for another hour after being called back so that he could personally sign the democratic charter and illustrate the commitment of the United States to constitutional rule and democracy in this hemisphere.

Our shared values are derived from a common history. The history of the Americas is a history of the progress of freedom. We struggled for independence here in the new world. We established democratic governments here to secure our rights and allow us to explore the opportunities that this vast and plentiful hemisphere has to offer. No other region has made such progress and yet has so much potential.

Geography and commerce also create a bond between the United States and the region. The U.S. sells more to Latin America and the Caribbean than to the European Union. Trade with our NAFTA partners is greater than our trade with the EU and Japan combined. We sell more to the Southern Cone, to Mercosur, than to China.

Latin America and the Caribbean comprise our fastest-growing export market. These commercial relationships bind the prosperity of the United States to the hemisphere. President Bush believes that the 21st century will be known as the century of the


Having been the governor of a border state, the President sees the nations of this hemisphere as partners and neighbors. He is interested in the affairs of the region. He believes that the emergence of democratic states in the Americas and the prospects for the growth of hemispheric trade and development make this a defining moment.

The United States is engaged with Latin America, necessarily and happily so. We share historical, cultural, commercial even familial ties. During the Cold War, American statesmen used to say of Europe and NATO, "We are there and we are committed." One might say of the United States and Latin America today, "We are here and we are committed." President Bush believes in the future of the Americas, and our policy reflects his confidence and his vision.

This is a very exciting time in the history of the Western Hemisphere. We have challenges. But there are also many opportunities. While we're optimistic, we're not naive. The enormous progress we have made in the past 20 years has not severed the region from its past.

The ideas of freedom and equality are being put into the practice of democracy and free markets throughout the hemisphere. But this historic evolution is not without difficulties or opposition. These are nations that are still struggling with the legacy of poverty, statism and authoritarianism.

I am convinced, however, that the forces of democracy and freedom are on the victorious side of history, as we saw in the last century. But there have been and will be setbacks. Leadership will be critical to overcoming these obstacles to progress. The Bush administration's agenda for our hemisphere has four goals: To strengthen security, promote democracy, encourage responsible governance and stimulate development.


Security is the first responsibility of a state. Since September 11th, no issue has captured the attention of the public as security. The attacks on that day were brutal reminders to all of us of the danger that evil men pose to open and democratic society and the value of our way of life.

We are deeply grateful for the support of our neighbors in our war against terror. Led by Brazil and Chile, our friends in the OAS invoked the clause in the Rio Treaty recognizing the attack on the United States as an attack against all members of the treaty. We have been working diligently with Canada and Mexico both to secure our borders and facilitate the movement of goods and services on which our economies depend. We were most heartened by the expressions of sympathy and condolences offered by people throughout the Americas on the anniversary of September 11.

We in the United States know that some countries in the region have suffered from terrorism for far longer than we. Colombia faces three terrorist groups supported by the profits of narcotics trafficking and kidnapping. These terrorists groups run the ideological gamut from unreconstructed Marxists to the far right, but the FARC, ELN, and AUC are not popular movements. They do not represent forces for social progress.

They are after power, control over territory and the dollars of drug trade that comes with it. Their tactics: assassination, bombing, kidnapping, and sabotage -- betray their true motives. The people and the democratically elected government of Colombia are their targets. If Colombia is to succeed as a state, it must be able to control its national territory and protect the lives and property of its citizens.

President Bush has enhanced and expanded our military and intelligence assistance to the Colombian government. Colombia can defeat the narcoterrorists, but it needs help from its friends to do it. They need training, arms, equipment, and intelligence to implement a successful military strategy.

Democracy and Good Governance

Our second priority is promoting democracy and good governance in the region. Democracy is more than a periodic election. It is a civic culture. Public integrity, equality before the law, respect for individual rights, economic opportunity, and healthy political institutions are indispensable. In the absence of any one of these, the people suffer and lose confidence.

The challenge in Latin America is for the leadership class to overcome the inertia of the old ways of doing business. Latin America s experience with authoritarianism and statism and the rampant corruption that is naturally a part of those systems has undermined the people s confidence in all their institutions. There are still too many in elite positions who are addicted to power or believe that recycled rhetoric and discredited ideology will make them the savior of their country. There are far too many in elite positions who have not learned that government exists to serve the people, not the other way around.

Corruption at any level of society, motivated by greed for money or for power, erodes public confidence and sabotages democracy and markets. The World Bank correctly identifies corruption "as the single greatest obstacle to economic and social development." It is the responsibility of leaders, not merely political leaders but of business and civic leaders as well, to maintain the trust of the public.

Many countries in the Western Hemisphere exemplify the connection between responsible leadership and progress. Uruguay, a country with a tradition of good governance, enjoys the most equitable income distribution in Latin America. Recently, more open and transparent public policies have contributed to above average economic growth in El Salvador and the Dominican Republic. As you are well aware, Chile, ranked as the top country in Latin America for fighting corruption and other indicators of good government, has benefited from the fastest economic growth and poverty reduction in the region over the past decade.

In Nicaragua, President Bolanos is waging a determined campaign against corruption and impunity in his country. It is no coincidence that he is the most popular leader in Latin America. We also applaud President Maduro for his work to strengthen the rule of law in Honduras. The United States fully supports their efforts.

Unfortunately, there are examples of democracies in crisis in our region as well. In Venezuela and Haiti, the failure of leaders to maintain the confidence of their people has led to violence and instability. The solution in both cases lies in strengthening democratic institutions.

We encourage President Chavez and the opposition to fulfill their commitment to a meaningful dialogue that will produce a political solution to the present crisis in Venezuela. The United States will not support or condone unconstitutional actions to remove the government or to maintain it in power. I will also observe that President Chavez, as the leader of Venezuela, has the principal responsibility for protecting the political process and the rights of all Venezuelans. The Organization of American States can play an important role in mediating a dialogue between the respective parties, and the United States urges the government and the opposition to avail themselves of their good offices.

On Haiti, The United States gave its full support to the unanimous OAS resolution that calls on the government to hold elections in 2003, clears the way for Haiti to recommence work with international financial institutions, and provides some desperately needed assistance to relief organizations. The United States wants to help the Haitian people, but we have serious issues with the Aristide administration.

President Aristide has not fulfilled the promises he made to two consecutive Presidents of the United States. The government needs to move forward quickly on these issue so that an electoral council can be formed next month and preparations for elections can begin. The United States will support the electoral process so long as it remains transparent and fair. We expect all democratic parties in Haiti to earn the support of the Haitian people.

Argentina is going through one of the worst economic periods in its history. But we have seen that, despite their real suffering, the Argentine people remain committed to democracy. Although the political situation is complicated and sometimes chaotic, we should note that the Argentine democratic system has remained strong and vibrant and constitutional solutions have been followed all along this very difficult road to economic recovery. The search for consensus is never easy, but it is the only path worth pursuing.

Argentina remains a close friend and ally of the United States and is an important partner in this hemisphere. As the only Major Non-NATO Ally in the Western Hemisphere, Argentina has been an important source of support and advice for the United States on issues ranging from regional security to counter terrorism... from the Middle East to free markets and trade.

We are optimistic that Argentina will negotiate a program for sustainable economic recovery with the international financial institutions. The United States is providing technical assistance to Argentina in the areas of banking reform and monetary policy to facilitate this process. Ultimately, it is incumbent on Argentines to put forward a sustainable economic program. I am sure that they will do so. The United States stands ready to support Argentina every step of the way.

Regionally and globally, the United States wants to provide incentives for good governance with a new approach to foreign aid. President Bush announced the Millennium Challenge Account initiative last March. We will increase our core development assistance by 50% over the next three years, resulting in a $5 billion annual increase over current levels by fiscal year 2006 and beyond. These monies will be directed to those countries that govern justly and honestly, uphold the rule of law, fight corruption, invest in the health and education of their people, and promote economic freedom.

This is a change from our traditional posture. We are not just going to provide aid to countries based on their per capita incomes. We're going to provide aid to countries to help them get out of poverty by promoting social, economic and political reforms. Governments that protect human rights, that fight corruption, that institute the right economic and social policies, are the ones that will receive U.S. aid. If they don't, they won't.


The people of the Americas want the opportunity to build a better life for themselves and their children. Aid programs like MCA are a part of the solution, but trade is the most effective and rapid means to economic development. Only by taking advantage of the efficiencies offered by free trade in the global market can the nations of the Western Hemisphere reduce poverty and accumulate the capital they require to invest in their people and their industries to achieve long-term economic growth.

That is why President Bush is committed to creating the Free Trade Area of the Americas. FTAA will create the largest free market in the world... stretching from Canada to Chile... including every one of the 800 million people in the Western Hemisphere. As you know, we intend to complete negotiations by January 2005 and fully implement the agreement by the end of that year. The United States looks forward to co-chairing the negotiations, together with our partners in Brazil, beginning next month.

Foreign Minister Lafer, in a recent editorial, eloquently argued that Brazil had nothing to fear from trade negotiations with the United States and everything to gain. The principal export of Brazil today is aircraft. And we're their largest market. Foreign Minister Lafer is right: if there is one country that has nothing to fear from entering and competing in the world market, it is Brazil.

The FTAA will give a powerful impetus to investment, innovation, efficiency and growth in Latin America, as NAFTA did in Mexico. Opening the hemisphere to free trade will also provide political benefits. There is a virtuous dynamic between free economies and free societies.

Increased growth from trade generates more revenues for governments to address the problems of unequal access to education and health services, to protect the environment, and to improve law enforcement and security services.

By encouraging market-based economic reforms and promoting greater openness in economic decision-making, free trade agreements advance political openness and democracy.

By breaking up monopolies and cartels that seek to maintain the status quo, free trade fosters competition and innovation, economically and politically. Increased competition and investment combined with reduced government and monopoly influences in the economy will eliminate opportunities for corruption and provide incentives to strengthen the rule of law.

I believe that FTAA will be a positive force in Latin America, politically and economically.


If leaders construct a secure and liberal political environment and provide economic incentives and opportunities, the creative power of the people of the Americas will be unleashed. The Bush Administration has a comprehensive policy to achieve that goal. It is an ambitious goal, and I am well aware of the challenges we face. But I pursue it with confidence because I know that we have many millions of partners in our efforts to make this hemisphere free, prosperous, and democratic. As President Bush said, the people of the Americas have "a dream of free markets and free people, in a hemisphere free from war and tyranny. That dream has sometimes been frustrated but it must never be abandoned."

Thank you for your time and attention.


Released on October 15, 2002

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