Fernando Valdez

Instituto de Investigación y Autoformación Política (INIAP), Guatemala

    Mr. Valdez cited a recent study stating that in spite of the structural adjustments made in Latin America, “the fact that many Latin American and Caribbean countries have been unable to speed up the elimination of poverty in a uniform manner in the 1990s seems to suggest that various factors are affecting the growing link between the state of the economy and poverty reduction. We cannot, however, validate this statement because the issue has not been closely analysed.”

    A critical review by the International Monetary Fund, the World Bank and the Inter-American Bank of their respective activities in the sub-continent, shows that the extent of the devastation caused by Hurricane Mitch was primarily because the poorest people in Central America live in highly vulnerable conditions and that the government and society were ill-prepared to handle a natural disaster of this calibre.

    The Guatemalan government reviewed its national income and expenditure budget as part of its strategy to deal with the crisis. In the framework of the Peace Accords signed in 1996, signatories agreed to increase expenditure in the social sectors of education and health care by 50% between 1995-2000. This is directly linked to the 1995 WSSD Summit, all the more so because the government confirms it is keeping the commitments made in Copenhagen by implementing the Peace Accord.

    These commitments imply a sustained increase in public spending; however it will be difficult for the government to reach that goal because of high levels of tax evasion. Since the tax issue is the government’s Achilles heel, it will be necessary to conclude a tax agreement for Guatemala and the rest of the region. The most recent statistics show that the concentration of wealth in Latin America has increased and is the highest in the world.

    The advances include:

• efforts to decentralize health-care services;
  
• approval of constitutional reforms linked to the summit (ethnic issues, participation, equity of indigenous people, the status of women);
  
• human rights issues;
  
• Central America, is making major progress to institute a democratic system that guarantees access to power as well as improved relations between institutions. Progress on issues pertaining to the economic and structural conditions of its respective societies has been inadequate.

    All the documents signed by Central American countries in the past five years on social issues recognise the fact that the public must get involved, however, in practice there is little evidence to show active participation. Nicaragua, Costa Rica and Guatemala are working on creating a legal framework that would encourage public participation in government.

    Social organizations still have time to prepare a firm and documented message on the new social policy needed in the region before the next social development summit. The recommendations should use agreements on tax to make a strong link between economic and social issues.

    Mr. Valdez stated that it is time for the people of Central America to benefit from the effects of the economic growth. Unfortunately, the people have not benefited from the results. Instead, poverty is on the rise. He hoped that the international consensus reached through the experiences of the past few decades will herald the beginning of a new era for Central America.



Fernando Valdez is from the Instituto de Investigación y Autoformación Política (Institute for Research & Policy Development) in Guatemala.