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Friday, October 06, 2006

Rafael Correa in Cuba, Feb 9, 2006 - "'Free trade' means inequality in Latin America"

February 9, 2006.

José A. de la Osa

The idea that the free trade is always beneficial, and benefits all, is simply a deceit or extreme naivety and does not stand up to a deep theoretical, empirical or historical analysis, maintained Dr Rafael Correa, former Ecuadorian Finance Minister, yesterday, on the third day of VIII International Encounter of Economists on Globalisation and Problems of Development that closes tomorrow in Havana. He indicated that while suitable specialization and commerce between countries with similar levels of development can be of great mutual benefit, trade liberalisation between economies with greater differentiation in productivity and competitiveness poses serious risks for less developed countries.

It can even destroy the productive base, destroying jobs while remaining unable to create new ones, a situation constituting “a true social explosion”.

In the case of Latin America, for example, evidence already exists that the “opening-up” of trade has produced de-industrialisation in the region and greater difficulty in generating jobs in manufacturing. Correa, in his contribution on the topic “The Sophistry of Free Trade”, clarified that in a book that he is writing he will replace the term “sophistry” by the one of “deceit” because it is more in tune with reality, and pointed out that wherever there was more evidence of free trade and “opening-up”, all across Latin America in recent years, poverty has not been reduced and inequality has increased.

They want to take us deeper into a model that has been tremendously harmful for the region and that is extrapolated from the supposed competence of the markets, which is already quite questionable concerning economic factors inside a country, and is an absurdity between countries.

The plenary session began yesterday with a contribution from Osvaldo Kacef, official in charge of the Economic Development Division of CEPAL, who spoke of the perspectives for growth in Latin America and presented the challenges that face the economies of our countries.

Better, sustained, distribution aids growth, and it has been demonstrated that a more equitable society grows more also.

Increased expenditure on education and health increases human capital and allows, therefore, an increase in the productivity of lower income sectors and the incorporation of more available resources for meeting growth targets.

In reference to the growth cited by Kacef in his contribution on the area, a Bolivian delegate asked, why, if economic growth had taken place in the region, was there so much poverty, so much misery in Latin America and the world?, and he recalled that one hundred thousand children die every seven seconds of hunger and disease because the so-called “Washington consensus” denies them the right to the food.

The plenary session also included a panel on multilateral commercial negotiations being put before problems of development, in which Jaime Estay, of Mexico, and Gladys Hernández, of Cuba, castigated the recent agreements of the ministerial meeting of the World Trade Organisation (WTO), carried out in Hong Kong, that clearly accelerate the process of liberalisation that the WTO is promoting the creation of on a planetary scale.

Translated from Granma.Cubaweb.

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