MercoPress. South Atlantic News Agency

Buenos Aires consensus, a new agenda for Latinamerica

Organized by Panama based Banco Latinoamericano de Exportaciones, BLADEX, Argentina hosted the “Buenos Aires Consensus, a new agenda for Latinamerica” conference.

The Buenos Aires meeting pretends to overshadow the "Washington Consensus" prevalent in the nineties and which is blamed in most of Latinamerica for the region's economic and social shortcomings.

The main figure at the Buenos Aires gathering has been Economy Nobel Prize Joseph Stiglitz from Columbia University, who between 1993 and 1995 was economic advisor to former president Bill Clinton and World Bank chief economist from 1997 to 2000.

Extremely critical of the "Washington consensus", Mr. Stiglitz said Latinamerica must face the challenge of generating new economic ideas which adapt to its necessities.

"Washington consensus policies limited growth and when there was growth ignored distribution", pointed out Mr. Stiglitz.

Latinamerica needs a new structure which contemplates the importance of social equality and employment, "which establishes a balance between the roles of government and markets".

The Washington consensus concentrated excessively in the efficiency of markets and forgot "governments are capable of promoting growth by promoting education, technology and social justice", emphasized Mr. Stiglitz.

Argentine First Lady Cristina Fernandez who is currently running for a Senate seat in representation of Buenos Aires province next October was present at the launching of the "Buenos Aires consensus" conference and spared no remarks about the "lost decade of the nineties" with its "fabulous indebtness for Argentina" and praised the "fortitude" of the Argentine people who managed "to survive" the (former president) Menem years.

"The Washington consensus, Menem and the IMF, sometimes I imagine how the seven plagues of Egypt must have been like and I wonder if (the '90s) were not even worse and, if so, how we managed to survive" said the first lady".

It was a period of "wild privatizations with no regulatory frameworks to protect consumers, a time to force the disappearance of the state because the contradiction was that the state was useless, it interfered negatively with the economy, and markets were superior assigning resources", insisted Mrs. Kirchner.

"These policies in a year and a half (2000/2001) devoured five presidents; the last of which even had to advance elections given the violence and social unrest", she added and then went on to praise her husband.

When President Kirchner reached the Casa Rosada, he faced a "formidable indebtness; the country risk was above 7.000 points; 60% of the population was living in poverty or indigence and unemployment over 21%, but there was a very clear determination from the man who took office".

The "Washington consensus" was first coined in 1989 by John Williamson, later adopted by the World Bank and the White House, and referred to "the lowest common denominator of policy advice being addressed by the Washington-based multilateral institutions to Latin American countries as of 1989".

These policies were: Fiscal discipline; a redirection of public expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure; Tax reform (to lower marginal rates and broaden the tax base); Interest rate liberalization; A competitive exchange rate; Trade liberalization; Liberalization of inflows of foreign direct investment; Privatization; Deregulation (to abolish barriers to entry and exit) and Secure property rights.

However, looking back on the nineties it's seen as synonymous of "neoliberalism" and "globalization", with "audiences the world over seem to believe that this signifies a set of neoliberal policies that have been imposed on hapless countries by the Washington-based international financial institutions and have led them to crisis and misery", argues John Williamson.

The Washington consensus "has become a lightning rod for dissatisfaction amongst anti-globalization protestors, developing country politicians and officials, trade negotiators, and numerous others. It is often used interchangeably with the phrase "neoliberal policies". John Williamson is a senior fellow of the Institute for International Economics.