Argentina, U.S. Searching for New Policy Guidelines

reuters.com Wed January 29, 2003 12:26 PM ET

WASHINGTON (Reuters) - Argentina and the United States will work together to craft a new Washington Consensus, the ideological framework that marked relations between the White House and Latin America in the 1990s, a senior Argentine official said on Wednesday.

Born in the late 1980s, the Washington Consensus consisted of a cocktail of policy recommendations that went from privatizations to the elimination of trade barriers.

Many governments embraced the recommendations enthusiastically, but the Consensus failed to better the lot of most Latin Americans, which recently have shown their displeasure at the polls by electing left-leaning governments in Venezuela, Ecuador and Brazil.

Worse, the economy of Argentina, the poster-child of economic reforms in the 1990s, crashed early in 2002, plunging that country into its deepest recession ever.

Martin Redrado, the vice minister of foreign affairs, talked about the consensus during a two-hour meeting with Richard Haass, the State Department's policy director.

"We agreed that there must be a new Washington Consensus," he told Reuters in a telephone interview. "Clearly, the consensus has been insufficient to bring about a better standard of living for our people."

Redrado, who is meeting with other top administration officials during a two-day visit to Washington, said the United States "understands that the Consensus lacked a political side."

"We see that it lacked a social side."

The Consensus recommendations were also embraced by multilateral organizations like the International Monetary Fund and the World Bank. The World Bank now makes social programs a hallmark of its lending strategy.

The creator of the original Washington Consensus term, John Williamsohn, an economist with the Institute of International Economics, is working a new set of guidelines, which will be presented in March at the annual meeting of the Inter-American Development Bank, to be held in Milan.

Williamsohn said the paper, co-authored with other top Latin American economists, will carry a new name tag.

Argentina, the United States and other Latin American nations will work together to generate a "new consensus that underscores the main guidelines for development in this decade," he said.

Redrado also heads a Buenos Aires economic think tank, the Capital Foundation.