Brazil, Cuba & Venezuela.
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Souza Cruz: growing alongside Brazil
• One of the five most powerful groups in Brazil, commemorates its centenary by opening in Rio Grande do Sul the largest cutting-edge cigarette factory in Latin America, and whose importance has embraced governors and entrepreneurs in a climate of confidence which, four months into the Workers Party government, ranges from the particular to the general
BY GABRIEL MOLINA
PORTO ALEGRE.- The centenary of the powerful Souza Cruz (SC) cigarette company has had an unexpected result: the coming together of the federal government and Brazilians of one state with an entrepreneurial interest, which has revealed itself as a common one, and goes far further.
Statements from key Brazilian representatives at the opening of the giant cigarette factory in this city, coinciding with the company’s centenary, opened up promising prospects. Flavio de Andrade, president of Souza Cruz; Germano Ribotto, governor of Rio Grande do Sul, from the opposition PMDB; and PT leader Jacques Wagner, minister of Labor and Employment, characterized - at least for now - a distinct dynamic in the Brazilian political process, given the chaos created in Venezuela on account of the conflict between the government and the entrepreneurs federation, allied to foreign forces and the opposition, still fresh in people’s memory.
Lula apologized for not attending as he had to receive President Chávez in Pernambuco for a six-hour meeting that day, involving 10 Brazilian and eight Venezuelan ministers; the presidents of PetroBras and the PVDSA; Jarbas Vasconcelos (PMDB), the governor of Pernambuco; and Joao Julio of the PT, the mayor of Recife.
“How I envy you,” Chávez told Lula, according to the Zero Hora daily, “because with the political radicalization in Venezuela, it’s almost impossible to meet with governors.”
The project for the new plant was initiated in 1997, in the capital of Rio Grande do Sul, with Antoni Britto, then governor of the state, who fought hard for its construction there. Ovidio Dutra, the current government minister of the cities, continued its work. The project was finally inaugurated during the term of the third governor, Germano Rigotto.
BRITISH AMERICAN TOBACCO PRESIDENT PREFERS CUBAN CIGARS
At a lively press conference given by Andrade, accompanied by Milton Cabral and Constantino Mendoca, vice president and executive director, respectively, on the eve of the inauguration, the industrialist announced that the next morning, April 26, the Souza Cruz Company would celebrate its 100th anniversary by inaugurating Latin America’s most modern tobacco plant in the Cachoeirinha municipality, 30 kilometers from Porto Alegre, capital of Río Grande do Sur.
Martin Broughton, president of the British American Tobacco (BAT), informed the press at the inaugural reception that the new plant is the world’s largest and most modern tobacco production center.
In response to criticisms concerning smoking, Broughton commented that he never smokes cigarettes, only cigars. He enjoys a Cuban cigar at night after a good meal and believes in the Group’s public statement that smoking is a personal matter.
Flavio de Andrade spoke to journalists of his firm’s plans and the difficulties he has had to confront. For example, he underscored the company’s losses due to fraudulent brands coming out of Asian countries. Since 1998, the company has also incurred losses due to contraband from Paraguay and Uruguay. A third of the 150 billion cigarettes sold annually in the country are illegal. For this very reason, not only have producers been hit hard, to the tune of $466 million USD, but so has the state. In the final analysis, smugglers have out-maneuvered the tax office and reduced its income.
On the other hand, the high taxes recommended by the World Health Organization to reduce consumption have produced a doubling of cigarette prices over the last three years. Andrade pointed out that raising taxes doesn’t really solve the health problem associated with smoking, but rather forces consumers to buy the product at lower prices on the black market. Nevertheless, Brazil has displaced the United States as the world’s main cigarette exporter. In 2002, Brazil exported 472 million tons, 26% of Brazil’s export total, in comparison with 185 million tons from the United States, also hit by price rises.
He added the counterbalance to tax increases in Brazil would be to facilitate beneficial negotiations and operations for the Rio Grande do Sul government and the S.C.
THE TREASURY AND PRIVATE ENTERPRISE NEED TO FIGHT CONTRABAND TOGETHER
Andrade also explained the difficulties the company is facing in making an complementary investment of a further 500 million reales (more than $166 million USD), along with federal and state aid, to construct a research center in Rio Grande do Sul. The institution will constitute one of the British corporation’s four most important world research centers.
The recent inauguration of the project in Cachoeirinha, an underdeveloped town in Porto Alegre, involved state participation through the now defunct Enterprises Operation Fund. A new form of investment funding is currently being debated in the Legislative Assembly, which only renounces one part of the future taxation recipe, such as rates on the circulation of merchandise and services.
That aid would serve as an example of the beneficial operations mentioned, given that the new plant’s original project, involving an increased production capacity of 80-100 billion cigarettes annually, was reduced to 45 billion due the previously discussed economic problems. Only a successful campaign against contraband, added Andrade, can bring product production capacity up to its original figure, as there are currently idle capacities in the cigarette-manufacturing complex.
SOUSA CRUZ SUPPORTS LULA PLAN TO PAY TREASURY OVER HALF OF PROFITS
Souza Cruz’s president opened the lavish celebration for 2,000 guests by describing negotiations in progress with Governor Irgotto regarding the awaited funding as “very advanced.” While he left his audience in suspense on their reach, he did reiterate his denouncement of contraband, which he called disloyal competition. He highlighted how profits garnered from the taxes collected by the Treasury could be invested in schools, housing and hospitals.
Financial statistics offered by SC on the tax issue are impressive. As one of the top five private Brazilian enterprises, SC makes over 6.1 billion reales annually (some $2 billion USD), of which 3.3 billion goes to the Treasury, over half. The firm employs 4,500 people directly, and 380,000 indirectly.
Andrade noted the common interests between his company and those of the Brazilian government, such as the fight against illegality soon be initiated by the government. He supported Lula’s calls to advance both taxation and social and educational reforms and observed that the new government’s program for combating illegalities is a positive sign that should lead to a higher income from tax, more jobs, more security for Brazilian industry and increased guarantees for consumers. He added that the Zero Hunger Program requires the backing of all Brazilians and revealed that Souza Cruz plans to donate 1,200 tons of food per year, while noting that the recent election results are renewing hopes of seeing Brazil shine once again in the international scenario.
“We going to make the impossible possible, as Lula says,” he stated emphatically.
The SC president likewise referred to the group’s concern for the environment, confirmed by the decision to use only 10% of the project surface area for actual factory space taking up only 208 hectares. The remaining area will be used for an ecological park dedicated to regional wildlife preservation.
In his speech, Germano Rigotto, the Rio Grande do Sul governor alluded to by Andrade, stated that he would not measure efforts to transform Souza Cruz’s intentions into reality in his state. He added that the decision would lend continuity to the logic of recent investments by the group in the country.
He also lauded community integration by the SC group, its social and educational programs, highlighting the chain as one of the best articulated and consolidated within the state, operating directly with 45,000 families of small gaucho farmers.
For Rigotto, one of his government’s main actions consists in strengthening existing productive chains and organizing new ones “as a way of overcoming difficulties, integrating efforts, destroying obstacles and promoting a fair repartition of operational results.”
GOVERNORS CAN HELP CONSIDERABLY IN THE TRANSFORMATION OF SOCIETY
Rigotto added that he has reinforced his defense of the tax reforms proposed by the federal government, a position to be transmitted to Lula by his labor and employment minister, present at the act. Just before, he stated to the press that state governors could play a large role in aiding the president in the transformation of society.
In his speech, he added that the tax reform mechanism would be used in terms of the investment in question as soon as possible. He also stated that actions are being integrated among federal and state public ministries, as well as both security apparatuses, to combat piracy and contraband.
In a brief interview with Granma International, Rigotto characterized as attractive economic and social relations between Cuba and Rio Grande do Sul a veritable country in extension, population and resources, and asked Andrade to arrange a possible trip to Cuba.
In relation to the federal giant, Brazil, Minister Jacques Wagner also evaluated for Granma International the theme of Cuba, a country he has visited various times, affirming that the relations of friendship and affection with the Cuban people open up wide-ranging prospects of increasing economic and trade relations.
Addressing the opening event, Wagner highlighted the importance of having attained such an important project, initiated by the state governor in 1997 and concluded by another governor from a different political party, which he described as a display of democratic stability.
On behalf of the Brazilian president, Wagner greeted the president of the British Tobacco Company’s administration council, thanked Andrade for his public commitment to the Zero Hunger Program and expressed his desire for greater support from the SC for this and other social programs.
He also reiterated the government’s commitment to combating contraband cigarettes, drinks and other illegalities.
“I want to give you the good news that the factory’s expansion will be necessary when the fight against contraband begins to show results,” he concluded.
TRUST REPLACING FEAR
In light of the elections four months ago, bringing to power the first leftist politician in Brazil, the events at Porto Alegre represent a tangible climate of trust, as opposed to fear, by the private sector in relation to investment.
Mainstream newspaper headlines have reported on the strength of the Brazilian currency, calling it an excellent sign. At the end of April, the real rose to three to the U.S. dollar.
On April 16, the U.S. news agency AP affirmed from Sao Paulo that hardly anyone now believes that the Brazilian economy will become uncontrollable like that of neighboring country Argentina. It added that last year, the situation in Brazil came close to doing so when investors’ fears over the possibility that da Silva would gain the presidency made the local currency fall by 35% against the dollar, encouraging national and international investors to withdraw thousands and thousands of dollars from the country. The dispatch continued by describing how even the International Monetary Fund is praising the former trade union leader.
However, the agency noted that two-digit inflation continues to be a prime problem for investors and industrial leaders in the state of São Paulo.
No matter what, Lula is facing an imposing challenge. The Economist states that the president has been obliged to modify government employees’ pensions perceived by some as the most generous in the world. Lula is seeking a consensus for tax and other reforms that some persons in his own ranks are unsure of.
Organized crime - fed by fabulous sums from drug trafficking - has declared war in reprisal for the anti-corruption measures.
The authorities have named Fernandinho Baira-Mar as responsible for planting explosives in Rio. He is running his drugs business from prison, using a cell phone. After he was transferred to a higher-security prison, two judges were assassinated in March: Antonio José Machadao Dias from Sao Paulo and Alexandre Martins de Castro, from Espirito Santo.
Meanwhile, observers note how Brazil has taken on a role that corresponds to its importance, filling the vacuum that others have left empty. It is to be hoped that entrepreneurs and the opposition comprehend what the Souza Cruz president described as “a new government that is prioritizing important structural and social reforms that are creating an environment of hope of living better days for millions of Brazilians, when all sectors of society appreciate and act on the calls being made of us by the President of the Republic.”
It should not be forgotten that the South American giant is saddled with a foreign debt of $230 billion USD. This year, Brazil has to pay $45 billion USD in exorbitant interest rates that were originally set at 6.2% but have now reached 24% per year. The steps that Lula takes have to be balanced ones. This Souza Cruz centenary, in the words of its president Flavio de Andrade, “born in Rio de Janeiro but with a Gaucho heart,” was impressive and I admired the organizational level, free from any failings. The only thing that I missed was not having seen and heard any samba. Not even that created especially for the occasion by Gilberto Silva. I had to settle for seeing good Irish rock Beatles-style at the Cardápio Cherry Blues. I hope that this isn’t symbolic.
• SOUZA Cruz is one of the five largest private groups in Brazil. Its work not only encompasses cigar manufacture but also the production and marketing of cigarettes. Since 1994, it has been associated with international group British American Tobacco (BAT), the world’s second largest cigarette company. BAT has branches in more than 180 countries, leading the field in 50 of them. Its portfolio includes over 300 brands and the group has 80,000-plus employees worldwide.
BRASCUBA’s operations continue to grow
• AT a press conference on April 24, Granma International asked about Souza Cruz’ joint venture with Cuba. Flavio de Andrade, president of the Brazilian consortium since 1996, explained that BRASCUBA is an important cooperation project for companies in both countries and was initiated in 1998. The quality of raw material - Cuba’s famous tobacco - is responsible for a large part of the project’s success.
Brazil guarantees the quality, quantity and price of these black tobacco cigarettes, he affirmed.
De Andrade expressed his satisfaction with these business arrangements, during the course of which he has visited the island on various occasions. He informed that operations in Cuba associated with established brands such as Popular, Romeo y Julieta and Hollywood are continuing to grow and Cohiba and Vega have recently joined the list of brands.
The BRASCUBA board of directors was represented at the celebration by a delegation comprising José Berikes, Adolfo Suárez, Brazil and Cuban vice presidents, respectively; Osvaldo Encarnación, vice president of the Tobacco Entrepreneurial Group (TABACUBA); and this Granma International correspondent.
The Brazilian press highlighted the participation of the group, which traveled especially from Havana for the celebrations. •
Venezuelan-Brazilian refinery
• IN the third meeting this year of Presidents Chávez and Lula, they agreed to establish a refinery in northeastern Brazil and undertake oil prospecting in the South American giant.
Brazil’s National Economic and Social Development Bank is to finance exports of goods and services to Venezuela, with a credit of one billion U.S. dollars, guaranteed by importing Venezuelan oil. An additional $50 million USD credit guarantees the purchasing of food and medicine for Venezuela.
At the bilateral summit, Lula announced that there would be a meeting on the Free Trade Area of the Americas (FTAA) with neighboring countries, adding that it was necessary “to move ahead, taking into account the level of development found in the hemisphere’s countries.”
Powell: Realizing the Hopes of a Hemisphere
Scoop
Tuesday, 29 April 2003, 4:49 pm
Press Release: US State Department
Crisis and Opportunity: Realizing the Hopes of a Hemisphere
Secretary Colin L. Powell Remarks to Council of the Americas' 33rd Annual Washington Conference Loy Henderson Conference Room, Washington, DC April 28, 2003
(2:05 p.m. EDT)
SECRETARY POWELL: Well, thank you so very much, ladies and gentlemen, and thank you, David, for that very kind, generous and very warm introduction.
I want to thank you, David, of course, for all of your efforts throughout the course of your distinguished career in business and philanthropy to increase understanding among the people who call our hemisphere home. And I thank you especially for the leadership you have brought to this Council for so many, many years. And I also want to take this chance, David, to thank you for being such a great mentor to me over so many years and to so many different capacities and jobs that I have occupied in Washington. And I deeply appreciate knowing of your support from a distance, from New York, and it is a great sense -- with a great sense of humility that I thank you for that support.
And Bill Rhodes and Miles Frechette, I am delighted to see you both again this year and to thank you for all you have done over the years to bring our region together.
I would also like to take this opportunity to recognize two members of my State Department team who are here, Curt Struble, who has done a wonderful job as Acting Assistance Secretary for Western Hemispheric Affairs -- wherever you are, Curt. He left already? (Laughter.) And also Roger Noriega, who I hope is in the audience. Roger, are you? There you are. Our talented Ambassador to the OAS who has been nominated by President Bush to be the new Assistant Secretary, and I'm looking forward to Roger being confirmed in the very near future and coming on board.
Your Excellencies, distinguished guests, ladies and gentlemen, all of you, welcome to the State Department. I am pleased to look out over the audience and see so many friendly and familiar faces. And I won't even begin to identify people one by one, but there are many friends here today, and a special welcome to my good friend Soledad Alvear from Chile. I look forward to seeing you later, my dear. And it is other -- there are other distinguished members here from throughout the hemisphere, and welcome to all, welcome to all.
I am always pleased to meet with the Council, and I'm pleased that this is the third straight year that I've had such an opportunity, because this Council embodies within its collective presence all the values that we hold dear -- free markets, democracy and the rule of law. By trading and investment, that which you are so interested in, you create jobs, you expand opportunity, and you promote development for the people of our hemisphere, so that the people of our hemisphere can see that democracy and the free market system is for them. It is not just for business, it is not just for the purpose of making a profit, but for the purpose of bringing hope into their lives and putting food on their tables, and to giving a better future to each and every one of their children.
And I am also sure that you would agree with me that we meet here today in a time of peril, but also in a time of great promise. David touched on some of the issues in our mind today. He touched on some of the problems we are having here in our own hemisphere. He gently touched on some disagreements we have had with some of our closest neighbors in the hemisphere in recent months.
But the one thing I am absolutely sure of is that these disagreements come and these disagreements go; and that which binds us together, that which makes us one, that which makes us a part of this hemisphere is so strong -- all of those elements are so strong that they will give us the wherewithal to come through these periods of disagreement to build a better hemisphere as part of a better world for all of the people of our hemisphere and the people of our world.
In Iraq, we have just come through a time of great peril. You have all joined with me and people around the world watching the brave young men and women of the American, British, Australian and other coalition countries, who came together and liberated the Iraqi people from the yoke of Saddam Hussein and his thugs. I am so proud of those young men and women and I know that you are so proud of them as well.
And who among us will ever forget some of the scenes that came across our television sets, the scene of unbridled joy when together, Iraqis and Americans, toppled that huge statute of Saddam Hussein, which dominated Baghdad's central square. As I watched it on television, I was in the outer office of the President; the President was in his office. I had just come out of a meeting, and there on the television set in his assistant's office was this scene.
And the President came out, and we all sat transfixed by this image of the statue slowly being pulled over after a great deal of work by two American Marines and the Iraqi people. And as a soldier, I kept looking at it, and I was nervous because these two soldiers were by themselves on their personnel retriever with the crane up. And I kept saying, "Where is their security?" (Laughter.) "Isn't there a war going on?" (Laughter.) And they were just two Marines who would not miss this opportunity.
But at that moment, they had help, not from fellow Marines, not from fellow soldiers in the Army, but from the Iraqi people who were there in the square, who welcomed them, who saw they were having trouble, so helped them as, together, Iraqis and Americans tore down this statue, the statue that celebrated despotism, terror, weapons of mass destruction.
Who will forget the photographs of tens of thousands of Iraqi Shiites marching on a pilgrimage to their holy city of Karbala for the first time in a quarter century -- peacefully? For 25 years, they had been prevented from practicing their faith in this noble way by somebody who claimed to be faithful, somebody who claimed to be a believer, somebody who claimed the faith of Islam, said he was a Muslim but would not let Shiites practice their faith. And here, in this one moment, suddenly they were free to assemble by the tens upon tens of thousands, without a bunch of soldiers guarding them. We kept our distance so that they could peacefully participate in this important pilgrimage.
This all may seem faraway and distant. Baghdad may seem far from Bogotá and the cares of Iraqis far removed from the daily struggles of Argentines. But the countries of our hemisphere have had and continued to have an important role in eliminating the threat from Iraq's weapons of mass destruction and bringing new hope to the Iraqi people. Seven of our Latin American friends are members of the coalition of the willing that President Bush assembled to free Iraq.
And I want to thank President Maduro of Honduras, who is here with us in the building today and will be participating in this conference, as long as he is able to. I hope he will be here for most of the day.
And I also want to thank the Presidents of Colombia, Costa Rica, the Dominican Republic, El Salvador, Nicaragua and Panama for their courageous stand for what is right, what is necessary, and what is just.
And now we are counting on the Latin American members of the United Nations Security Council to join us in making sure that the Council can -- the Council can fulfill its vital role in the reconstruction of Iraq. Security Council membership brings important responsibilities and requires tough decisions, and it is no secret that there was disappointment when some ofour friends did not agree with us on the need for a follow-on to Security Council Resolution 1441, which gave the Iraqi regime one last chance to disarm peacefully.
But that's behind us now. Saddam and his regime are gone. The statues lie in the dust and we now have an opportunity to come together to make sure that the Security Council lives up to its responsibilities. We all join together to help the Iraqi people build a better nation, to give Iraqi children hope, just as we wish every child in our own hemisphere to have hope and a brighter future.
Iraq is very important and it has certainly dominated the headlines and dominated political life, not only in Washington but around the world for a number of months now, but President Bush has a foreign policy agenda that goes well beyond Iraq or the particular military crisis of the moment.
Last fall, the President issued a documented called "The National Security Strategy of the United States of America." And in that short, simple document of 30-odd pages, he laid out his agenda for all to see. Many people saw that document and they jumped at just a couple of sentences that talked about the tactic of preemption, a way of taking military action, and suggested that this whole document was about preemption.
But nothing could be further from the truth. Preemption is just a small section in the document, and not a strategy. If you really looked at the whole document, you would see a strategy emerge, a strategy that talks to the role of the United States in helping people around the world to meet their aspirations, and the role that we intend to play to help them do that. The President's agenda, you would see from that document, is focused on people's desire for human dignity and well-being.
The document talks about working with friends and allies. It talks about building up our alliances. It talks about economic development. It talks about sustainable development. It pledges cooperation with our friends and allies, not only to meet today's security threats, but also to boost trade, conquer infectious disease and strengthen democracy. That's an agenda that is directly relevant to our hemisphere, and that is the agenda of President Bush and all of the members of his cabinet.
None of our goals is more important than the war against terrorism, of course. Barely a year and a half after the attacks of September 11th, the world is still at war with terrorists in Iraq and Afghanistan and everywhere that they plot their crimes. There can be no respite, no rest until the terrorists are defeated, and they will be defeated.
From day one to this day, the nations of our hemisphere have stood together against terrorists. It was on 9/11, on the very day when we were struck, that my colleagues in the Organization of the American States, when we were all together in Lima, were the first to come together to condemn the attacks on the Pentagon and the World Trade Center.
Since then, in word and in deed, the democratic countries of the region have cooperated to search out terrorists, dismantle their networks and freeze their funds. We must continue to cooperate with equal vigor to meet the many other challenges confronting our hemisphere, from the danger to Colombia from terrorists and narcotraffickers to the peril to Venezuela from political upheaval.
We must do a better job of reducing the threat to our citizens from trafficking in drugs and arms, and trafficking especially in people. We have an opportunity to come together and defeat HIV/AIDS, the greatest weapon of mass destruction on the face of the earth today, putting millions of lives at risk right now, as we sit here, throughout the world.
Our human ties are our most precious bonds. Over 33 million Americans proudly trace their heritage and their descent from the nations of Latin America. Our challenge is to work together on borders and immigration to make sure that we continue to welcome legitimate travelers while screening out terrorists. We must remain and we will remain an open, welcoming nation. We are a nation of nations. We are touched by every nation and we, in turn, touch every nation on the face of the earth, every nation in this hemisphere.
And so in the post-9/11 aftermath, there was a need for us to know who is coming into our country, and we're doing better at that. We're putting in place better systems to check the backgrounds of people who want to come here. We will speed it up, we will make it easier, because we understand that America has to be an open place, has to be a welcoming nation.
History has taught us that no country, not even a superpower, can meet challenges such as the challenges we face alone. Solutions must be hemispheric solutions. So, too, with opportunities. The spread of democratic and economic freedom has opened unprecedented opportunities to lift millions of men, women and children out of misery.
Trade is the most powerful engine for development, and neighbors are natural trading partners. The North American Free Trade Agreement shows how freeing trade across borders helps people. In less than a decade, trade among the NAFTA partners has more than doubled, bringing more and better jobs. In Mexico, the export sector has created over half of all new manufacturing jobs, and these are jobs that pay, on average, 40 percent more.
To expand this circle of prosperity, we are working toward freer trade at every level and every day. Bilaterally, we have concluded a free trade agreement with Chile that will remove the disadvantages American companies currently face while helping Chile grow, grow even more than it has in the past. It's had a remarkable record of growth and development, and with this free trade agreement it can do even better.
We also support strengthening economic relations with groups of countries in our hemisphere. We have implemented an expanded trade program with the Andean nations that provides duty-free access to the U.S. market for some 5,600 different items. In addition to stimulating trade and development, this program also provides incentives to Andean farmers to find alternatives to illicit crops.
We are working with the Central American nations to finish free trade talks with them by the end of this year. At the same time, we have launched programs to help the Central American countries compete in the modern, global economy. The 50 projects included in this program include funding for computers to make government agencies more efficient, projects to help increase civilian and citizen involved in trade negotiations, and assistance to strengthen food safety inspection systems.
This may all sound rather mundane, rather down to earth, but these are the everyday details, the everyday programs that can determine whether a country can attract the capital and investment that it needs to grow.
At the regional level, we place a high priority on linking our entire hemisphere in a Free Trade Area of the Americas. Two years ago at the Quebec Summit of the Americas, our presidents and prime ministers committed themselves to creating, by January 2005, a free trade area that would create greater prosperity for nearly 800 million people in 34 countries of our hemisphere. To move negotiations forward, the United States has announced a bold, comprehensive offer to eliminate tariffs and trade barriers.
All of this activity is taking place against the backdrop of our efforts to expand global openness, growth and development through a successful Doha development round of World Trade talks. The next World Trade Organization ministerial meeting will be held in this hemisphere in Cancun, Mexico. Bob Zoellick, the U.S. Trade Representative, is leading the charge to make that meeting a complete success.
We will do our part to open the hemisphere to the benefits of freer trade and investment. But our friends, public and private, must also get involved to ensure that the final agreements give the biggest boost to our economies and offer the greatest benefit to our citizens.
We need other governments to negotiate in good faith, with the well-being of their citizens uppermost in mind; and we need businesspeople, like you assembled here today, to advise us and push us to conclude and ratify strong agreements. We can combat terrorism and trafficking, we can fight disease, we can strengthen human ties, we can expand trade, but none of our efforts will be enough if men and women lack confidence in their democracies and their prospects for a better future.
Last year, standing before this group, I warned of a lingering dissatisfaction with the quality of democracy and the results of economic reform. Despite some progress over the past year, dissatisfaction remains. In part, such feelings are a measure of how far our hemisphere has come, politically and economically.
I remember vividly back in the 1980's, the late 1980's, when I was National Security Advisor to President Reagan, too much of the hemisphere was ruled by generals and dictators. We were worried about infiltration from other parts of the world of communist influence that would cause nations on a path to democracy to reverse course and go the other way.
But today, every country but one has a freely elected president or prime minister. Former adversaries compete in the democratic arena of electoral politics.
The sole exception is the well-known exception, Cuba. The Castro regime is cracking down on Cuban citizens who dare ask for a voice in how they are governed. Far from offering liberty and hope, the regime is turning to arrests and harsh prison sentences, 10, 15, 20, 22 years for speaking out, all in a vain effort to stamp out the Cuban people's thirst for democracy. We applaud the nations of Latin America that introduced and supported the recent resolution in the United Nations Commission on Human Rights, insisting that Cuba accept a special human rights envoy. The Castro Government's refusal to accept the UN inquiry only condemns it further, proves the case against it.
Why would Castro reject scrutiny if he has nothing to hide? We know the reason. He has everything to hide.
Now the OAS is taking up Cuba's human rights practices. We look to our friends in the OAS to live up to the ideals we share and take a principled stand for freedom, democracy and human rights in Cuba. We look to them to join us in developing a common hemispheric approach to supporting Cubans dedicated to building a democratic and free Cuba. We can do no less, for our hemisphere will not be fully free until the Cuban people are free.
Political progress in the region has gone hand in hand with the economic reforms. Although many countries face severe economic challenges, the old demons are gone: inflation is largely tamed; countries are increasingly open to foreign trade and investment; economic setbacks occur but no longer lead inevitably, as the night follows the day, to economic crises affecting the whole hemisphere.
These improvements have created increased expectations for good government and broader responsibility and prosperity. People have sacrificed and they want to see the results in their pocketbooks, in their pay packets and in their polling places.
But too many people still suffer from weak governments and ineffective institutions. In too many places, rule of law and property rights are honored mainly in the breach of those rights and the breach of the law. Children are not adequately educated for jobs in a globalizing world or citizenship in a democracy; health care systems are failing; corruption still saps the marrow of democracy and, like terrorism, it is all too widespread; economic stagnation and even deep recession retard development.
So the challenge to the governments of the region, of the hemisphere, are clear. They must meet their people's just expectations for a better future. To do so, they must see political, institutional and economic reforms through to completion, no matter how difficult. To do so, they need support from friendly governments, but also from friendly businesses. The election of President Lula in Brazil is a powerful example of voters using the democratic process in search of better lives.
It is important for the hemisphere that this experiment in reform, this experiment in reform through democracy, succeeds to be an example for the entire region and the entire world.
The people of Argentina are also seeking an electoral route to better lives. Yesterday they voted in first round of presidential elections. We all hope that the new government, when selected and in place, will be able to move that great nation forward. Paraguayans, too, have elected a new president, and we wish the president all the best in his efforts to strengthen Paraguay's democratic institutions.
The challenges that our hemispheres confront -- our hemisphere confrontsand the solutions to those challenges are intertwined, totally intertwined. Political stability and security require and reinforce economic growth. Good governance is essential to all. The problems are difficult, but they are not insufferable. The coming years can and should be a time of progress, a time of success.
Hemispheric progress requires continued American engagement in trade, in security, in support for democracy, and across the board we are deeply involved in expanding peace, prosperity and freedom in this hemisphere. These are the essential elements of the President's foreign policy agenda and these will not change.
Progress also requires the deep commitment of the countries of the region. We are seeing commitment, but more needs to be done to complete the reforms needed to give new generations new hope. And progress requires business activity, investing, trading and doing business where good policies are in place; spreading best practices where they can make a difference; and supporting responsible policies that free entrepreneurs, educate children and improve the health of all.
In the final analysis, progress relies on partnerships between different governments, between governments and their citizens, and between governments and business. In the Council of the Americas, the governments of the Americas have a wonderful partner for progress.
I want to thank you for all that you are doing to achieve our mutual goals. I congratulate all of you for your energy, your commitment and your impact. And as I have said to this group on previous occasions, never lose sight of who we are doing this for -- not for those of us assembled in this room, but for the poorest of our citizens, who will not read any of these speeches, who will not watch any of this on television, who will go to bed, perhaps, a little hungry, who will wonder about whether their child will be clothed and whether their child will go to school or whether their child will have a better life than they are having. They are what it's all about.
We told them that democracy would work. We told them that if they went down this road, there would be a better life for them. We told them that the free market economic system would work. We told them that if they moved in this direction, if they were not afraid of globalism, they would find a better life. We told them that there would be opportunities to educate their children for the kind of jobs that are going to be out there. We told them there would opportunities to improve their infrastructure so that they can convert their countries into more fertile ground for investment because there is an adequate infrastructure.
We told them many things. We made them many promises. And now they look to us here in this room and to political leaders throughout the hemisphere to deliver. And if we collectively do not deliver, then democracy has no meaning, the free market system has no meaning, and it is possible for us to go backward. But I'm not worried about going backwards. I'm only thinking about moving forward because I believe we are committed to doing all of the things that'll be necessary to make sure that the hope that we have put in their heart is realized in the better life that they will see in the future.
Thank you so very much.
(Applause.) [End]
Released on April 28, 2003