MercoPress. South Atlantic News Agency

Paulson praises Uruguay and calls for increased trade flows

U. S. Treasury Secretary Henry Paulson

United States Treasury Secretary Henry Paulson said on Thursday in Montevideo that increased trade flows will give Latin America more opportunity to spread the benefits of economic growth and to reduce poverty. He also praised Uruguay's open markets policies and sound economic decisions.

Paulson, speaking to reporters after meeting fellow finance ministers from Mexico, Chile, Peru and Uruguay said his visit to Brazil, Uruguay and Chile this week was aimed at fostering growth that would cut poverty levels in the region. "A big part of what I have been doing is listening for ways the U.S. government can be helpful in finding ways to translate top-line growth into greater prosperity," he said after meeting with the finance ministers. One of the main points of discussion during Paulson's trip has been the stalled Doha round of free-trade talks. "Anything that we can do to accelerate trade flows will benefit all parties," Paulson told reporters. "At the global level, Doha is very important and I appreciate the constructive role that Uruguay is playing in advocating for a successful conclusion to Doha." The United States, the European Union, Brazil and India failed last month to reach a breakthrough in the World Trade Organization's trade round, leaving the fate of the long-running talks in doubt. Paulson was in Uruguay on the second stage of a tour that already has taken him to Brazil and will wind up with a visit to Chile on Friday. Trade issues have come up at every stop, but Paulson also pitched a U.S. effort to bring more private-sector money to bear on Latin American infrastructure projects. "This region is woefully under-invested in infrastructure and advances could reduce some of the inequality," he told Uruguayan journalists, referring to the income gap between the poor and middle-to-upper income citizens. Paulson has been actively searching for a way to involve multilateral lenders, such as the World Bank and International Monetary Fund, more closely in promoting global growth, and took up the theme with his Latin American colleagues. "On multilateral institutions, my colleagues and I all agreed they need to continue to adapt to the world that exists today so that they can meet the needs of their clients," he said. "We talked about such things as help in developing capital markets, yield curves in domestic currencies ... about innovative approaches to infrastructure." The Treasury Department last week said it was entering a partnership with the International Finance Corp., the private sector arm of the World Bank, to create a program to foster private investment in expanding electricity, transport, water and other projects that support development. Paulson said his role as U.S. Treasury chief was to focus on helping Latin America find ways to make more capital available to small and medium-sized businesses and boost infrastructure spending. But he said that doing so also advances social progress by creating jobs and shrinking the differences in income between rich and poor. He described Uruguay -- a tiny country perched between giant neighbours Brazil and Argentina -- as a model of what was possible if others in the region followed the kind of market-based development approach Washington favours. "This is a very strong example of what open-market principles and sound economic policies can mean," Paulson said. This is the US Treasury Secretary fourth trip to Latinamerica in an attempt by the Bush administration of propping regional democracies and with more trade counter the growing influence of Venezuela's Hugo Chavez, an issue on which the Democrat dominated Congress has been particularly critical of President Bush. On Friday Paulson is expected in Santiago where he will be meeting with President Michelle Bachelet, Foreign Secretary Alejandro Foxley, Finance minister Andres Velasco, Economy minister Alejandro Ferreiro and the president of Chile's Central Bank Vittorio Corbo, plus representatives from the private banking and business sectors.