New EU Development Cooperation Strategies with Latin America and the Caribbean

 

Opening Remarks by Angel Gurría, OECD Secretary-General delivered at the EU-LAC Foundation Event

Paris, 30 June 2014, 15h00

 

President Waldner, Ladies and Gentlemen:

 
It is a great honour to be here today to discuss “New EU development cooperation strategies with Latin America and the Caribbean (LAC).” President Waldner, it was, and always is, a pleasure to coordinate with the EU-LAC foundation. Bringing together our expertise and knowledge only enriches and adds weight to our discussions on the EU and Latin America – two longstanding partners.
 

The EU and LAC: A Historically Fruitful Partnership
 
Bonded by solid cultural, historical and economic ties, the two regions are in fact “natural allies”. The EU is today the first aid donor, the second trade partner and the second foreign investor in Latin America.
 
 
Since 1999, regular summits between the two regions have shaped EU-LAC relations at bi-regional, sub-regional and country levels. This cooperation has been focused on social cohesion, regional integration, good governance and institutional capacities. The regional programmes established at these occasions were well received by beneficiaries, who recognised the importance of bringing actors in the two regions together.
 

Despite this strong foundation, the future of this partnership is facing several challenges. Severe austerity measures in Europe, resulting from the global economic crisis, have adversely impacted trade flows, some Member States' ODA to Latin America, and remittances from Europe to the region. China's emergence as a new actor in Latin America, the Asia-Pacific region’s dynamic rise, and the successive EU enlargements have also become a challenge.
 
 
Additionally, EU and LAC have experienced diverging trends.  Although growth is slowly coming back, at 1.4%, Europe is still recovering from a devastating economic and social crisis. Unemployment in the euro area remains high, at almost 12%. Youth unemployment is at a record 24% and surpasses 50% in Spain and Greece.
 

In contrast, Latin America has enjoyed an average GDP growth of 4% between 2003 and 2013.Many countries took advantage of this dynamism to make important progress in combating poverty and consolidating their middle classes, their market economies and their global trade networks. 
 

Latin America is now at a decisive moment; it must implement the reforms needed to maintain growth, now that the global environment is changing and the commodity price boom is over. There is an energy revolution in the US, and China is set to grow at a slower clip.
 
 
Additionally, the development cooperation between the two regions cannot be constrained to the traditional provision of aid flows and technical assistance from Europe to Latin America. This cooperation has to develop in new ways, with new horizons and a new sense of reciprocity and mutual learning.
 

Time for New Ways of Cooperation
 
For example, the EU can offer valuable insights for Latin American’s regional integration efforts. Regional and sub-regional integration is regaining momentum with the Pacific Alliance process. Trade and Investment are also benefiting from a renewed impetus with the development of ‘mega-agreements’ such as the Trans-Pacific Partnership “TPP” and the European Union-North America agreement “TTIP.”
 
 
There is a lot to be learned from the European integration experience, especially in building the necessary networks – communications and transport, logistics, SME’s common regulation, academic integration, etc – to strengthen LAC’s intraregional informal integration and make the most of trade liberalisation. The EU’s experience in regional development and structural funds to prepare the most backward regions to reap the benefits of integration is another area where new development cooperation projects can bloom.
 

Latin America can offer a great deal of insight on dealing with severe crises and bouncing back with stronger institutions and better policies. Countries like Brazil and Mexico have ample experience in moving ahead after massive and successful debt restructuring. And Chile and Peru have lessons to share in developing fiscal rules and improving the balance between growth and macroeconomic stability. These unique experiences can provide useful orientations for some European countries.
 
 
I’d like to note, however, that the regions also share many challenges. Both Europe and Latin America must place greater emphasis on education and social cohesion; enact measures to improve productivity; unlock potential growth; create more inclusiveness; and become more competitive in the global economy. 
 

The OECD is Ready to Support this Renewed Partnership
 
We greatly welcome calls for a more strategic relationship that is based on regional cooperation and the participation of non-traditional players. For example, EUROsociAL introduced for the first time operations targeted primarily at national public administrations and is now transforming the dialogue into concrete actions. New partners, such as foundations, and non-traditional countries, can also benefit from a more strategic exchange with Latin America.
 
 
The OECD stands ready to facilitate this exchange. Peer-to-peer learning has been part of our modus operandi for more than five decades. 
 

Furthermore, of the 11 LAC Middle Income Countries which “graduated” from traditional EU donor-recipient support, nine of them are either members of the OECD (Mexico and Chile) or have close ties with the Organisation. They are members of our Development Centre; Brazil is also one of our Key Partners; Colombia is in the process of accession; Costa Rica is advancing towards a decision on accession in 2015, and we are just starting a Country Programme with Peru.
 
 
 
Tools such as the Latin American Economic Outlook - produced jointly with ECLAC and the CAF - and our policy dialogue networks on taxes, budget, competition, corporate governance and investment are helping to strengthen the dialogue on policy reform. We are also looking forward to the upcoming Ibero-American summit in Veracruz later this year and the EU-CELAC summit in 2015.
 

Ladies and Gentlemen,
 
Europe and Latin America have a rich and vibrant history of partnership and collaboration, and as the global economic landscape shifts, there is a great opportunity to deepen the scope of their work. I wish you great success in your exchanges today, and encourage all our Latin American and European participants to see each other as partners. Thank you.