Help out democracy by improving trade, OAS ministers urge
AP, Thursday, Jun 12, 2003,Page 6
Greater access to world markets and more foreign investment is crucial to sustaining democracy in Latin America, foreign ministers from around the region said Tuesday.
In a statement prepared for the closing of the 33rd General Assembly of the Organization of American States (OAS), the ministers vowed to fight poverty and corruption and promote respect for human rights.
US Secretary of State Colin Powell opened the assembly Monday calling on ministers to "hasten the inevitable democratic transition in Cuba."
However, ministers did not even mention Cuba in the assembly's final statement issued after Powell flew to neighboring Argentina early Tuesday.
Democratic rule has spread throughout the continent, the ministers noted, but several countries "have faced serious problems, worsened by poverty" in their efforts to preserve democracy.
They urged a world economic order that promotes growth, open markets for the region's exports and increased investment in the region.
"Support by international financial institutions to democratic governments is also essential and requires the creation of creative financial mechanisms to strengthen democratic governance," the document stated.
The two-day assembly opened the way for a regional treaty against terrorism to become effective next month. Under the Interamerican Convention against Terrorism, countries commit to jointly fighting terrorism by denying asylum to suspects, increasing border controls and fighting money laundering.
Colombia, Venezuela, Cuba and Haiti are the Latin American countries that have the most worrisome records on human rights, said Marta Altolaguirre, president of the Interamerican Human Rights Commission.
In Colombia, Altolaguirre said, a four-decade civil war involving Marxist guerrillas, right-wing paramilitary groups and the Colombian army has resulted in massive abuses against the civilian population.
She blamed most of the abuses on the left-wing Revolutionary Armed Forces of Colombia.
Americans Losing In The Wealth Race
ForbesLuisa Kroll, 06.11.03, 5:47 PM ET
NEW YORK - North America's wealthiest individuals saw their accumulated wealth fall 2.1% in 2002 to $7.4 trillion, its first decline in seven years. And the number of high-net-worth individuals (defined as people with financial assets of more than $1 million) slipped slightly as well. In the U.S., the number of high-net-worth individuals fell by 100,000 to 2 million. Those are some of the conclusions of the 2003 World Wealth Report, published today by Merrill Lynch and Cap Gemini Ernst & Young.
While Forbes is the definitive source for the 400 richest Americans and for tracking the world's billionaires, Merrill Lynch (nyse: MER - news - people ) and Cap Gemini Ernst & Young have made their marks tracking the matters of mere millionaires for the past seven years. And while news from North America was rather glum, elsewhere things were looking up for the world's wealthy. All other regions saw an increase in financial wealth and all except Latin America saw the number of individuals grow, despite the tough economic environment. The ranks of the world's wealthy grew 2.1% to 7.3 million individuals while the worth of their financial assets grew 3.6% to $27.2 trillion.
This growth is a far cry from the numbers posted in 1999, when wealth expanded by 18% and is in fact the lowest growth in seven years. But it is impressive when compared with the performance of the major stock exchanges around the world, which were down 16.9% last year.
The wealthy racked up these gains in such tough economic times largely by diversifying and shifting their financial strategy to wealth preservation from accumulation. "The more affluent the investor, the more immune they turned out to be," says James P. Gorman, president of Merrill Lynch's Global Private Client group, "Clearly you are seeing the benefits of diversification."
According to the report, these individuals stashed 25% of their assets in cash/deposits, another 30% in fixed income and only 20% in equities. The 58,000 ultrahigh-net-worth individuals (defined as folks with more than $30 million in assets) are even more likely to concentrate their assets out of the equity markets.
Some other areas where these individuals increased their investments included real estate, both in direct ownership and through real estate trust funds and luxury collectibles. Auction houses such as Christie's saw increased sales in art and wine collections. A wine index, compiled by Fine Wine management, outperformed equities by 97% from 2000 through 2002.
So why did North American lag? In part, because people in the U.S. had greater faith in equity markets than their non-U.S. counterparts, retaining a larger portion of their financial assets in equities. This group also was hurt by the poor dollar. Still their portfolios did much better than the 22% drop in value of the Standard & Poor 500 index over 2002, "indicating that high-net-worth investors had strategies in place for wealth preservation," says Gorman.
Of the major regions, Asia-Pacific enjoyed the biggest gains in wealth, up 10.7% to $5.7 trillion, due to relatively high savings rates, local currency appreciation and relative strength of regional stock markets. This pace is unlikely to be repeated in 2003 as the region suffers the impact of SARS.
Interestingly, political and economic upheaval in certain countries such as Israel or Venezuela doesn't necessarily affect that country's richest individuals. There doesn't appear to be a correlation between a country's problems and this group's performance, because they move much of their money offshore and invest in many countries.
These millionaires aren't afraid to get help with their finances. Indeed, 55% use financial advisers, up from 45% last year, according to Merrill Lynch, who has the world's greatest number of financial advisers (14,000 in 2002). And it's putting more emphasis on this group; it recently invested $1 billion to improve the technology of the financial advisers' workstations. Since 2001, it has been expanding into new areas targeting wealthy niche groups including Indians, Asian-Americans and Hispanic-Americans. It faces stiff competition from other financial services giants such as Citigroup (nyse: C - news - people ) and UBS (nyse: UBS - news - people ).
US Urges OAS to Take Tough Stand Against Cuba
09 Jun 2003, 17:54 UTC
Secretary of State Colin Powell, in the Chilean capital Santiago, has appealed to regional foreign ministers to take a stand against Cuba's crackdown against dissidents. There is resistance within the Organization of American States to taking up the issue, without also dealing with the U.S. economic embargo against the Fidel Castro government.
Mr. Powell's policy address to the OAS General Assembly included some of the Bush administration's strongest criticism of the Cuban crackdown, and an appeal to OAS member countries to stand together against the "depredations of the hemisphere's only dictatorship."
Seventy-five prominent Cuban dissidents were given long prison terms in April on subversion and treason charges, and three men were executed after a summary trial for trying to hijack a ferry boat to the United States.
Deploring the crackdown by the Castro government, the Secretary of State said the Cuban people "increasingly look" to the OAS for help in defending their fundamental freedoms, and reminded delegates of their commitments under the group's 2001 declaration of support for hemisphere-wide democratization.
"The Inter-American Democratic Charter declares that the peoples of the Americas have a right to democracy. It does not say that the peoples of the Americas, except Cuba, have a right to democracy. I commend the OAS members who stood by their principles and the Cuban people in supporting the recent declaration on human rights in Cuba on the floor of the [OAS] Permanent Council. My government looks forward to working with our partners in the OAS to find ways to hasten the inevitable democratic transition in Cuba," Mr. Powell said.
The declaration condemning Cuba, sponsored by Canada, Chile and Uruguay, was presented in the OAS Permanent Council last month, but it has been signed by only half the organization's 34-member countries.
Most Caribbean member states have not signed the measure, arguing among other things, that Cuba's human rights record should not be debated, as long as the Castro government is suspended from the OAS, which it has been for 40 years.
A senior OAS official told reporters many members of the organization are ready to debate the issue of Cuba, but in a balanced way that includes the U.S. economic embargo and efforts to isolate the communist government in Havana.
In his policy speech, Mr. Powell also welcomed the agreement late last month for an August 19 referendum on the political future of controversial Venezuelan President Hugo Chavez. He congratulated OAS Secretary-General Cesar Gaviria for his months of work in mediating the accord, and said the United States is committed to working with the OAS and the so-called "group of friends" of Venezuela to bolster implementation of the agreement.
Mr. Powell announced a million dollar U.S. special grant, on top of $70 million in U.S. humanitarian aid to Haiti this year, to assist a special OAS mission trying to improve security conditions for long-delayed elections there.
He said the government of Haitian President Jean-Bertrand Aristide has failed to fulfill OAS resolutions for an electoral solution to the Caribbean country's political impasse. He said if it has not laid the necessary groundwork for elections by September, then the OAS should "re-evaluate" its role in that country.
The OAS ministers have agreed to call a special summit-level meeting of the organization, to be held in Mexico in November, to deal with threats to the region's democratic institutions posed by the protracted economic slump and financial crises in key member states including Argentina.
Powell's OAS focus: Cuban repression
Posted on Mon, Jun. 09, 2003
BY NANCY SAN MARTIN
Secretary of State Colin Powell on Sunday praised the European Union's recent decision to review its bilateral relationship with Cuba and said repressive action against dissidents on the island would be highlighted in his speech today before the Organization of American States.
Powell, who spoke to reporters in Puerto Rico while traveling to Chile for the OAS meeting, did not outline specific U.S. action in response to the crackdown.
But he said he would tell the OAS assembly today that Cuba remains out of step with the rest of the Western Hemisphere.
''I will point out once again that [Fidel] Castro's Cuba remains an anachronism in our hemisphere and it is not getting better,'' Powell told reporters, according to the news agency Agence France-Presse.
The European Union announced last week that it was reexamining its relationship with Havana in response to the recent arrests and harsh prison terms against government opponents and the execution of three men who had tried to hijack a passenger ferry across the Florida Straits.
The 15-nation bloc also unanimously approved limiting high-level bilateral government visits, reducing the profile of member states' participation in cultural events, and inviting Cuban dissidents abroad.
''The rest of the world is now starting to take note of Castro's increasingly poor human rights behavior,'' Powell told reporters.
Some analysts said Powell's speech at the OAS would result in little, if any, concrete measures.
''The OAS meeting will be full of declarations that aren't going to mean much,'' Eduardo Gamarra, director of the Latin American and Caribbean Center at Florida International University, told The Herald in a telephone interview. ''The United States is probably trying to secure a more universal policy'' against Cuba, Gamarra said, but Latin American nations would not be swayed to take such action.
Latin America has only limited bilateral relations with Cuba, compared to the European Union, which is Cuba's largest trading partner and foreign investor. Canada leads the hemisphere in foreign investment in Cuba, but in Latin America, Venezuela has the most significant partnership.
The main theme of the OAS meeting will be the strengthening of democracy in Latin America.
Free Trade Area of Americas is NAFTA on a grand scale
SLDispatch, By REPPS HUDSON Post-Dispatch
updated: 05/22/2003 06:06 PM
January 2005 is the date that trade negotiators for 34 Western Hemisphere nations have set to create the massive framework for the Free Trade Area of the Americas, from the tip of South America to the Arctic Circle.
"The FTAA is the big game," Assistant Commerce Secretary William H. Lash III said during a luncheon Wednesday at the Frontenac Hilton attended by representatives of small and mid-sized businesses, which are interested in expanding trade with Latin America.
The concept is similar to the North American Free Trade Agreement between the United States, Canada and Mexico - but on a grander scale.
The key to getting the FTAA framework ready for congressional approval is bilateral trade talks with Brazil, Lash said. Discussions are continuous, he said, "like a floating crap game" held in various sites throughout the hemisphere.
Brazil is South America's largest nation and economy, with 170 million people and a gross domestic product of $1.32 trillion. The 34 nations involved in the FTAA talks have a combined 800 million people and a total gross domestic product of $12 trillion.
The GDP of the NAFTA nations is $9.6 trillion, with 400 million people.
Now, Lash said, the focus is on cementing a trade pact between the two largest economies in the hemisphere: Brazil and the United States.
"You don't bully Brazil. You educate them," Lash told about 50 people at the luncheon, part of World Trade Week.
He said the United States and Brazil, with other nations following the talks closely, can be expected to hammer out a trade pact that will lower tariffs and other trade barriers over roughly a 10-year period. It will be patterned along the lines of NAFTA, which dropped barriers among the three participating nations.
While NAFTA continues to be a sore point with some environmental, human rights and labor groups, many economists and politicians say it is raising the overall standard of living for residents of the three countries.
Much of Latin America south of Mexico is being grouped into three customs unions or trade zones: the Central American Free Trade Agreement (Honduras, Guatemala, El Salvador, Costa Rica and Nicaragua); Mercosur (Argentina, Brazil, Paraguay and Uruguay), and the Andean Community (Bolivia, Colombia, Peru, Ecuador and Venezuela).
Lash, who is assistant secretary for market access and compliance, is a lead administration official in the effort to ensure that U.S. trading partners live up to their trade-pact commitments.
He said when Brazilian and U.S. negotiators resolve their differences, other Latin American countries, which already have begun to harmonize their trade policies through the regional agreements, can be expected to get on board.
He said Congress could ratify the pact as soon as 2005 under the new up-or-down trade promotion authority, or fast-track trade authority.
Congress gave the administration the power to negotiate trade agreements without later amendment during the ratification process. This authority gives other nations more confidence when they negotiate pacts with the United States, Lash said.
Key among the issues separating the United States and Brazil, Lash said, are protectionist measures for citrus fruits and juices and for sugar. They are global commodities, but both countries have vested interests that want to keep out citrus and sugar imports. Another big issue is intellectual property rights, particularly regarding compact discs, DVDs and computer software.
During a panel discussion on doing business in Latin America, Stewart Dahlberg, manager of the one-man department of export sales for J.D. Streett & Co. Inc., told how he spent hours searching the Internet and using the Commerce Department Web site to locate niche markets. His company, a privately held oil-products wholesaler, has been in business since 1884. But in recent years, it has begun to search for markets abroad.
Dahlberg said he spends a lot of time preparing for sales trips, and he worries over the details that can spell success - or failure.
"I don't want to travel without getting something back," he said.
If the Free Trade Area of the Americas materializes, Dahlberg said, it will be good for his business. At present, among his biggest concerns are the exchange rate and tariffs. He said not being able to speak Spanish or Portuguese is not a problem. He always asks for payment or a letter of credit "up front."
"The scariest part is losing someone (a former business partner) and never knowing why," Dahlberg said in an interview.
Sponsors of the trade meeting included the Commerce Department, Missouri's Office of International Trade, the World Affairs Council, the Regional Chamber & Growth Association and the University of Missouri at St. Louis' Center for International Studies, as well as US Bank and Webster, St. Louis and Southern Illinois universities.
Reporter Repps Hudson: