MercoPress. South Atlantic News Agency

Great moment for Latin America but “beware of complacency”

Garcia said the region’s governments are ‘scared’ of the magnitude of the Euro and US crises

Latin America is going through a “great moment” but can’t be complacent when the European Union and the US are facing major challenges, and the region must definitively address the large integration challenges, warned Enrique García, head of the Andean Promotion Corporation, CAF.

“We must be satisfied but not complacent because we must also look at the performance of the region in development issues and that is where the big challenges stand”, said Garcia in Paris during a seminar on “Latin American current and future challenges” organized by the CAF and France’s Political Sciences Institute.

Garcia said he feels there is a “positive tendency” because “the region’s governments are scared” with the Euro situation which he described as ‘most concerning’. He said that if the global crisis further deteriorates “it will extend and affect the global economy”.

“The good news for Latin America is that it has significant reserves”, said Enrique Garcia, a former Bolivian minister who heads CAF since 1991, which originally was a development bank, first founded four decades ago.

He said that following the 2008 financial crisis the region “did a good defence” with economic growth averaging 6% in 2010 and a more modest the following year but “it can’t be satisfied with 4% growth”.

A convergence of the more developed countries is needed and a ‘sustained equality effort’, which means better quality of life for its citizens, diminishing not only poverty but mainly the great inequality gap, the worst in the world, said García.

However he admitted that the European Union (27 members) and the Euro zone (17 countries) have a very complex decision making system, but nevertheless the region has continued to delay important decisions, which means “it is not so much an economic problem, as it is a political problem”. .

“It’s quite surprising for us Latinamericans since we have been through similar or worse experiences but we had the strength and willingness to adopt the necessary measures”, said Garcia before underlining that he does not believe the current crisis will implode the Euro zone, but avoided making any recommendation.

“I don’t have the pretensions of the IMF”, he said.