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Posted on Sustainabilitank.info on March 30th, 2008
by Pincas Jawetz (pj@sustainabilitank.info)

Columbia Business School, March 28, 2008, Hosted LABA (Latin American Business Association) Conference 2008.

The Topic – “LATIN AMERICA: Growth Perspectives in a Shifting Political Landscape.”

www.SustainabiliTank.info posted the announcement as we received it from YPIC – the UN affiliated “Young Professionals for International Cooperation.”

The meeting had 5 Sessions – serious business advice – Growth Oriented – and networking.
I will restrict the reporting to a star studded Fifth-Session actually titled: “THE SHIFTING LATIN AMERICAN POLITICAL LANDSCAPE.” This was indeed the special thing about this year’s meeting.

Interestingly, the two stars of the panel were both “Have-Be-ens” of sorts – Ex-Presidents of their countries. But – and watch this – they actually were those that put things in motion that are part of the present developments in their respective countries – though the emergence of the China factor came after them. From their “freedom to analyse” now – their presentations were enlightening indeed.

The Former Presidents were – President Cesar Gaviria of Colombia, and President Alexandro Toledo of Peru.

Further, President Gaviria is also Former Secretary-General of the Organization of American States (OAS).

The Chairman was also an important “EX-” and now Professor of Professional Practice in International and Public Affairs, School of International and Public Affairs (SIPA), Columbia University. Jose Antonio Ocampo, who was put in place of the previously announced Mr. Andres Oppenheimer, 1978 Graduate of The Columbia School of Journalism, now Latin American editor and syndicated foreign affairs columnist, The Miami Herald – The Newspaper for the Americas in the city that calls itself the capital of Latin America.

Professor Jose Antonio Ocampo, a Colombian national, teaches now courses in the Ph.D. program in Sustainable Development and has an active role in the Columbia’s Committee on Global Thought. He came to Columbia from the UN where he was UN Under-Secretary-General for Economic and Social Affairs (UN-DESA) under UN Secretary-General Kofi Annanappointed September 1, 2003 to suceed Mr. Nitin Dessai of India. He was replaced by the new UN Secretary-General, Ban Ki-moon, as the rumors are at the UN, because he had to promise that slot to China. So – Ocampo went from Colombia to UN and from there to Columbia (the “U” changed to “u” but we are glad he still will be involved in Sustainable Development – as the UN Commission on Sustainable Development was part of his domain at the UN – who knows – he might be able to do more good in his new job then in the previous job).

Professor Ocampo, prior to his coming to the UN, served in various positions in the government of Colombia as Minister of nearly every economic topic, and head of agrarian banks. He was also Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) 1998 – 2003, before coming to the UN, and that position gave him the overview of all of Latin America. His recent publications include “Stability with Growth: Macroeconomics, Liberalization and Development,” with Joseph E. Stiglitz, Shari Spiegel, Ricardo French-Davis and Deepak Nayyar, (New York: Oxford University Press, 2006).

Professor Ocampo was also a Professor in the Advanced Programme on Rethinking Development Economics at Cambridge University, a Professor of Economics at Universidad de los Andes of Bogota, a Professor of Economic History at the National University of Colombia, as well as a Visiting Fellow at Yale and Oxford.

Introducing the Session, Ocampo said that Gaviria was his boss. Ocampo said that both men had successful periods even though there were controversies in Toledo’s days at helm. There is now a shifting Political Landscape and people talk of two different lefts in Latin America. Ocampo would like to hear from the two Presidents what they think of these changes, and what they think the US elections would imply for Latin America?

President CESAR GAVIRIA TRUJILLO is currently National Director of the Colombian Liberal Party, and is a member of the Advisory Commission of External Relations of Colombia, where, it is said, he recently contributed mediation in the diplomatic incidents between the Colombian Government and the States of Ecuador and Venezuela.

He studied at Universidad de los Andes in the 1960’s and established there AIESEC (the local chapter of the International Association of the Students of Economics), and then in 1968 he was elected President of AIESEC in Colombia. This began his public service career. { Personally I found this interesting, because sometime in the begining of the 80’s I came to Medellin, Antioquia, as a speaker at a Global AIESEC meeting, and most probably had then the chance to meet him.} At 23 he was elected councilman of his hometown in Pereira, in the Coffee famous Risaralda State. 4 years later he became Mayor. In 1974 he was elected into the House of Representatives, before rising to the top in 1983. Three years later he became co-chair of the Colombian Liberal Party.

He was first elected to Congress in 1974; 1986 – 1990 he served in Virgilio Barco’s government, first as Minister of Finance and later as Minister of the Interior, then when Liberal Candidate Senator Gallant was assassinated, he became the Presidential Candidate, and President, August 7, 1990 – August 7, 1994. The period of Presidents Barco and Gaviria was marked by a process of trying peace with the M-19 and other rebells.

As President he did economic reforms to bring Colombia into the International economy; his time saw growth, the convocation of a Constituent Assembly to fortify Colombian Democracy, Human Rights laws, he made the Central Bank independent, and privatized many public service and infrastructure institutions.

He was followed in offfice by Ernesto Samper Pizano also from the Liberal Party who had a difficult campaign against Andrés Pastrana Arango, the candidate of the Colombian Conservative Party. Opinion polls were sharply divided. The elections for President took place on 29 May 1994. Ernesto Samper was elected president by a very narrow margin. Strangely eventually Ernesto Samper became also 16th Secretary General of the Non-Aligned Movement (October 20, 1995 – August 7, 1998). Andres Pastrana and the Conservatives won the Presidency in 1998.

But, there is another parallel story here. Samper was accused shortly after his presidential victory by his opponent and future successor, Andrés Pastrana Arango, of having received campaign donations from the Cali drug cartel in an excess of $6 million US dollars. Samper initially denied the allegations and deemed his political adversary as a sore loser, but soon afterwards a series of tape recordings were released to the public, the so called narco-cassettes. The Prosecutor General at the time, Alfonso Valdivieso, personally led the investigation. Valdivieso was cousin of the late Luis Carlos Galán Sarmiento, a charismatic presidential candidate assassinated by the Medellín Cartel in 1989 for his political views, particularly for favoring the extradition of drug dealers to the United States. Soon, the investigations led by Valdivieso unveiled a more than evident connection between the Cali drug cartel and top figures of Colombia’s society including politicians, journalists, athletes, army and police officers, and artists, among others.

A corollary to the Samper story: As a consequence of the political turmoil, the U.S. government withdrew any political assistance to Samper’s government. For consecutive years, Samper’s administration was lambasted by the US for its supposed failure to make every effort to effectively fight the war against cocaine and the Cali Cartel. Additionally, the US revoked Samper’s visa and thereby effectively banned him from entering the country. Then in July 2006, the present Colombia President, Álvaro Uribe, offered Samper Colombia’s ambassadorship to France. This led to the resignation of Former President and Colombian ambassador to the U.S., Andrés Pastrana, who criticized the decision. Opposition was also expressed by the media, political groups and other parts of Colombian society. In the end, Samper did not accept the offer.

Andres Pastrana was President August 7, 1998 – August 7, 2002, and 17th Secretary General of Non-Aligned Movement only between August 7, 1998 – September 3, 1998 when he was succeeded by Nelson Mandela. In 2002 he was succeeded as President by Álvaro Uribe Vélez who started out as a Liberal Party member, and is now in his second term (till August 7, 2010) as President, seemingly as an Independent.

The International Herald Tribune of May 29, 2006 wrote: “Colombian president wins 2nd term.”
By Juan Forero, BOGOTà , Colombia: “President Álvaro Uribe, considered by the Bush administration to be an unswerving caretaker for Washington’s drug war in Latin America, was re-elected Sunday in a landslide to a second four-year term. Colombians gave Uribe 62 percent of the vote, with nearly all of the votes counted. Voters were apparently satisfied that he had made headway during his first term in wresting control of this country from Marxist rebels and drug traffickers. He overwhelmed the second-place finisher, Carlos Gaviria, a left-of-center former Constitutional Court justice who received 22 percent of the vote, and Horacio Serpa, the Liberal Party’s standard-bearer, who garnered less than 12 percent. “

We wrote this lengthy introduction in order to be able to say that seemingly – the Branco-Gaviria times in Colombian recent history were probably the best days the country has seen for a long time – though, it is now the tough hand of President Uribe that is most appreciated by Washington.

Dr. ALEXANDRO TOLEDO was democratically elected President of Peru from July 2001-July 2006. He was elected by narrowly defeating former President Alan García. It was Toledo’s second presidential race in just 13 months. A year earlier he ran against incumbent Alberto K. Fujimori. Toledo dropped out of the runoff election amid widespread allegations that the election was rigged in Fujimori’s favor. Months after being reelected, Fujimori fled to his native Japan and resigned via fax after the broadcast of Fujimori’s chief spy, Vladimiro Montesinos, evidently bribing an opposition congressman to switch parties.

Toledo was born in a small and remote village in the Peruvian Andes, 12,000 feet above sea level. He is one of sixteen brothers and sisters from a family of extreme poverty. His father was a bricklayer and his mother sold fish at markets. At the age of six, he worked as a street shoe shiner and simultaneously sold newspapers and lotteries to supplement the family income.

At age 16, with the guidance of members of the Peace Corps, Toledo enrolled at the University of San Francisco on a one-year scholarship. He continued his education, obtaining a partial soccer scholarship and making up the difference by pumping gas.

In addition to two masters degrees, he earned a Ph.D. in economics from Stanford, where he met his wife, Elaine Karp, a Belgian-born American anthropologist. Dr. Toledo was able to go from extreme poverty to the most prestigious academic centers of the world, later becoming one of the most prominent democratic leaders of Latin America. He is the first Peruvian president of indigenous descent to be democratically elected in five hundred years.

Dr. Toledo attributes his academic and political accomplishments as being the result of a statistical error. His most precious dream and work now is that other men and women of the large socially excluded Peruvian and Latin American population can also become presidents of their respective countries by having access to quality health care and education.

On the stump, like the most experienced politicians, Toledo knows how to work a crowd, whether addressing peasants or potential foreign investors. Seamlessly transitioning from a buttoned-down, eloquent economist to a rebel outfitted in jeans, a t-shirt, and a bandana, Toledo is well versed in international trade and promises to give voice to the labor movement.

Mostly, though, Toledo has preached a centrist platform, pledging to award small-business loans to farmers, balance the budget, lure foreign investment, and create jobs. Toledo’s moderate campaign and carefully selected issues have found broad appeal.

President Toledo first appeared on the international political scene in 1996 when he formed and led a broad democratic coalition in the streets of Peru to bring down the autocratic regime of Alberto Fujimori. This coalition had the support of the international democratic community.

During the five years of Dr. Toledo’s presidency, the Peruvian economy grew at an average rate of 6 percent, registering as one of the fastest growing economies in Latin America. Inflation averaged 1.5 percent and fiscal deficit went as low as 0.2 percent. While markets in China and Thailand were opened, free trade agreement negotiations with the United States, Chile, Mexico and Singapore were about to conclude. These markets were generating new investments and jobs for the most poverty-stricken Peruvians.

The fight against poverty through health and educational investment was the central aim of Dr. Toledo’s presidency. As a result of sustained economic growth and deliberate social policies directed to the most poor, extreme poverty was reduced by 25 percent in five years. Employment grew at an average rate of 6 percent from 2004-2006.


Before becoming President, Dr. Toledo worked for the World Bank, the Inter-American Development Bank in Washington, and the United Nations in New York.

During his academic years, Professor Toledo was a visiting scholar and a research associate at Harvard University and Waseda University in Tokyo. He is currently an economics professor (on leave) at the University of ESAN in Peru.

1986-1991: Director, Economic Development Institute (IDE/ESAN), Lima, Peru.

1989: Leader of the PNUD/OIT mission for the evaluation of: “Impact of Macroeconomic Policies on Growth, Employment and Salaries” in six Central American countries, UNDP/ New York.

1981- 1983: Chairman of the Economic Advisory Committee to the President of the Central Reserve Bank and the Labor Minister in Peru under President Fernando Belaunde.

1981-1983: General Director, Institute of Economic and Labor Studies, Ministry of Labor and Social Development. Lima, Peru.

Current Activities:

-Payne Distinguished Visiting Lecturer at the Freeman Spogli Institute of International Studies (FSI – Stanford University) and Visiting Scholar at the Center on Democracy, Development, and the Rule of Law (CDDRL) for the 2007-2008 academic year.

-Distinguished Fellow in residency at the Center for Advanced Studies and Behavioral Science (CASBS) at Stanford for the 2006-2008 academic years.

-Founder and President of the Global Center for Development and Democracy (GCDD), which studies the interrelationship between poverty, inequality, and the future of democratic governance.

To read more about this amazing man who is an unusual giant hidden in a diminutive figure – see please: fsi.stanford.edu/people/alejandro…
Gaviria was the first to make an introductory speech. He said he was happy to be here with Toledo, because of Toledo’s attempt to bring back democracy to Peru. This is needed now in Colombia. Toledo, was first of the great number of the mestizo/Indio people to be able to head an administration that will be recognized in time as successful.

Latin American governments are – some say are from the right others from the left – but this is an oversimplification – this is true also in the US. The solutions are not only in the programs they say but in the markets.

(1) We had failed the race for growth – we had a lost decade then we saw optimism in the 90’s with 7-8% growth/year – then down to 2%. We still have many problems – do not think we are OK. A main problem is structural – the rate of saving. We had the Argentina crisis – started there – we did not solve it. The Financial Globalization – it is critical in LA.

Financial, Trade Globalization – it is useful as trade but the vulnerability in LA is from the Financial Globalization.We are all citizens of the World. The way NGOs work and bring up issues like child labor, discrimination against women – this changes us. A Colombian decision in Ecuador has disturbed the whole region.

(2) We need to understand that the political problems in LA are not just economic – they are social problems. The Quality of the Institutions – i.e. education – that is what is important – in order to enable to deal with the problems from globalization.

The US Ambassador in 1971 ( we assume he was talking about the Ambassador to Bogota) thought markets will solve the problems of LA – but political problems are more important. In India people organized themselves to supply the services that the government did not supply.

Toledo followed by saying that he had not the privilege to belong to Gaviria’s party, but he had the chance to study his leadership in Colombia and at the OAS. Now he said: “You have described the history, I will start with this as a base to build for the future.” He said upon himself that he feels he was intelligent before he got into politics, and will now take the five years of experience in his job (that is his five years as President), to look for the future.

LA has an opportunity to make a “qualitative jump” in the World Economy in the next 10-15 years. This is cautious optimism. He saw a growth of 6% LA average for 6 consecutive years . Peru had 9.1%/year. We are changing in relation to the internal composition of growth. WE SELL MANGOES TO CHINA. That is much better then the mineral commodities we used to export. These exports are much better because they are less dependent on the fluctuations of the market. We now have China & India of 2.3 billion people. The EU 500 million, our region 500 million. WE HAVE DIVERSIFIED FROM THE DEPENDENCE ON THE US.

Addressing the students – In the last 60 years we got a stock of human capital dispersed in the diaspora -if you do not lose your heart to Merrill-Lynch or JP Morgan. All we need is intelligent policy to recuperate. In the next 10 -15 years the region could become a player in the economy.

Today the G8 talk BRICs (Brazil Russia, India, China). I disagree: May be LARIC (Latin America, Russia, India, China). It is our responsibility to take in our hands the construction of the investments.

1. if we are capable we do not have to see 110 million people trying to survive on $1/day. This is not the environment that assists investment for growth and we do not reduce poverty.

2. Poverty and inequality of institutions – democratic government is in danger.

3. Cheap empty populism is the danger – it can emerge.

Toledo said that he has too much respect for the left to believe that Hugo Chaves is on the left. These types (the populists) were not able to obtain Sustainable Growth and distribute the gains to build up the countries.

Lack of access to clean water, medication, education … are the indicators. 122 million people included in the production cycle will buy more bread, socks and more yahoo – make a market. This besides the inclusion.

INVESTING IN REDUCING INEQUALITY IS GOOD FOR BUSINESS AND PROFITABLE FOR THE MARKET. You in the business school are tempted by Wall Street. A modest suggestion – don’t lose the opportunity, the region is waiting for you. Colombia, Peru are waiting for you. It is a regional opportunity – if you don’t do it – nobody else will do it.

Toledo, before politics he was teaching econometrics. Don’t stay in the US – he repeated. I know you will forgo 20-30% of salary if you made a difference in your country.

Free Trade Agreements are of enormous importance. I sent a letter of Congratulation. I decided to work for the Colombia, Panama FTAs. This all makes sense if you integrate this with the medium and small companies – not only the big ones.

The busines of inclusion is god for democracy and business. Toledo goes now to Kiev to talk about democracy.

LATIN AMERICA HAS THE SIZE OF THE US MARKET.

Answering to a question from Ocampo about the US in LA?

Toledo said that there is check & balances in Venezuela. True – there was significant set-back in the country.

On Bolivia – yes it had a good economic policy for years, but it collapsed because of lack of representation of indigenous people. Morales was very important in Bolivia.

When the Argentinian crisis came – the devaluation – the US was disengaged. The Argentinians never got a visit from the US treasury, IMF. They got an Anti-Americanism that was not there before.

The American government supported the coup in Venezuela.

The crisis in Brazil came from the Asia Crisis. The US did not show interest.

There were great mistakes on the US side. Mistakes in US foreign policy.

On the US elections?

We Need A New Relationship Based On Respect Of LA Governments And Public Opinion.

This is not a question of left – but of mistakes.

I think NAFTA was good. But Mexico is going bankrupt even with NAFTA. It should grow 6%. It is like Portugal, Greece, Spain.

Brazil had last year the first good year 5%. Colombia had 7%, Peru 8%.

Globalization & Trade do not check with distribution of income. One must look into that. We need to do a lot more about these people.

Ocampo summing up:

(1) Hugo Chaves? He is not a problem – he is a consequence. Try to confront poverty by giving official aid.

(2) Professionally, going back to Colombia is a great opportunity.

(3) The need for strong democratic institutions and a just judiciary institution, Freedom of the Press, a strong curriculum – and these strong democratic institutions will solve the accountability problem. Lack of democracy thus lack of accountability.

Clean Water is strongly associated with poverty and democracy.

WE NEED MORE LEADERS THEN PREDICTIONS. Leaders that have the capacity to do investments.

The difference between leaders and politicians? Politicians make a decision for next election and profitability is not in the next 3-4 years. In LA one must make decisions so that accountancy is not dependent from selling mineral commodities.

We need an economy of knowledge that depends on other products.

THE EMERGENCE OF POLITICAL PARTICIPATION OF INDIGENOUS LEADERS IN THE LAST 25 YEARS IN LA.

TOLEDO WAS THE FIRST DEMOCRATICALLY ELECTED INDIGENOUS PRESIDENT IN 500 YEARS.

atoledo.jpg
Peruvian President Alejandro Toledo.

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Colombian President César Gaviria

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Columbia University Professor José Antonio Ocampo, Former USG at UNDESA

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