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Post-crisis debate likely to heat up in Miami setting

Carlos Molina's picture

In the lead-up to the World Bank-IMF Annual Meetings, the Latin America and Caribbean Region VPU of the World Bank is co-hosting and attending the Americas Conference.

Old rumors fill corridors and grand rooms mimmicking 12th century Sevillian architecture. Perhaps are distant echoes from heated discussions that shaped Government agendas in previous years.

Or maybe it’s just small talk. Either way, it isn’t a stretch of the imagination to think about the Bushes, Clintons, Arias, Uribes or Bachelets of this world exchanging quick policy jabs within the corridors of the historic Biltmore walls as part of the decade-old Americas Conference, only a few days away now from trying to ignite once again an animated debate about the region’s political and economic future.

Cocooned in its limbo of palm trees and warm Miami breeze, the Biltmore Hotel seems to spur high stakes decision-making that has truly contributed to the region’s history -from Free Trade Agreements to Plan Colombia –while serving as a vacation hub for countless royalty and regional elites since the hotel was built in 1926.

In its first effort of this kind, the World Bank has joined this prestigious Conference as a partner, in the hopes of further engaging in a dialogue with the region as it exits the global financial crisis.

The latest move is part of the World Bank Group’s proactive approach to the crisis. It already has contributed an unprecedented US$17 billion in FY09 –triple previous annual commitments- to help countries in the region weather the financial crisis.

A little over a year since the crisis erupted globally, several Latin American economies are now glad to see signs of economic recovery. While others, such as Mexico, Central America and the Caribbean although still reeling from its effects, are even more eager to map out its future path to renewed growth.

Against this backdrop, a group of World Bank experts are bringing to the table two important points: 1) lessons learned from the crisis should be used wisely during the post crisis, and 2) social progress made over the last few years should be preserved at all costs.

Point one boils down to expert concerns that Governments might want to do away with openness and integration into the global economy after the beating some areas took –especially the Caribbean and Central America— from being closely integrated into the rich economies.

Our chief regional economist, Augusto de la Torre, argues that although being less integrated can to some extent shield economies from external shocks, the truth is “long term economic growth would be a lot slower that it would be otherwise.”

“The key is to look for diverse growth sources, like many South American economies did, by growing on the back of Asian consumption,” says de la Torre.

Point two is all about putting a human face on economic growth.

That is why –experts argue- it is imperative to protect the social advances made in recent years that lifted more than 60 million people out of poverty. In the meantime the crisis threatens to push back 8 million people into the abyss of poverty, according to recent Bank assessments. As World Bank president Robert B. Zoellick stated earlier this year: this financial crisis needs not to turn into a human crisis.

No doubt the Miami meeting should be able to foster the search for fixes to these and other issues, such as preserving democracy in the wake of the Honduras crisis, Haiti’s sustainability and the region’s new power brokers, which are expected to be addressed by president of Costa Rica and chief Honduras mediator, Oscar Arias, as well as former president and current UN’s special envoy for Haiti, Bill Clinton.

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