June 19, 2013
Global partners for the 21st century
By Herman Van Rompuy and José Manuel Durao Barroso, for the Herald
BRUSSELS — The Santiago summit, to be held this weekend between the European Union and the new Community of Latin American and Caribbean States (CELAC), will bring together leaders from 60 countries in the two regions. The summit comes at a pivotal moment for both sides. The global economy has been going through difficult times and both regions can play a key role in restoring strong and sustainable growth worldwide.
We are turning a corner in the financial crisis which has seriously affected the European Union’s economy. Our response to the crisis has been decisive and competitiveness and confidence are being slowly restored. We have taken the tough but necessary decisions to prevent similar problems from occurring in the future. Countries are undertaking unprecedented structural reforms and we are overhauling our economic governance at the Union level. Despite this crisis, the European Union remains the largest economy in the world and an indispensable partner for the international community in promoting peace, democracy and the respect of human rights as well as development, eradication of poverty and the protection of the global common goods such as climate. The way forward is for more integration and this is the path we have been charting for the last two years.
Latin America and the Caribbean are also living through profound changes, albeit of a different nature. Governments and citizens are facing choices which will shape their countries’ future development path for decades to come. For much of the region, the last few years have brought robust economic growth. Nearly 50 million people have been lifted out of poverty. Democracy has been further consolidated and the region’s voice in international affairs has also been strengthened. Yet there are still huge challenges in terms of poverty, inequality, security or environmental issues. Abundant natural resources have proved an asset for some countries but only a more diversified economic model will sustain growth in the longer term.
Against this backdrop, the Santiago summit comes at a time when the relationship is more important than ever. Its central theme is both a challenge and a call: an “alliance for sustainable development: promoting investments of social and environmental quality.” This focuses attention on a crucial pillar of the relationship. The European Union accounts for no less than 43 percent of the total stocks of Foreign Direct Investment (FDI) in Latin America and the Caribbean. And despite the difficult economic situation, in 2011, annual FDI flows from the European Union to the region reached record levels. How many people realize that European FDI in Latin America and the Caribbean is in fact higher than in Russia, China and India combined?
But it is not just about quantity. It is also about quality. For development to be sustainable, it must be inclusive — creating decent jobs. For Latin American and Caribbean countries pursuing a more sustainable and inclusive growth model, European investment stands out in terms of quantity and quality. It is already contributing in various ways to more competitiveness and social development. Highly diversified, it is certainly not confined to the resources sector. European companies are at the origin of almost two-thirds of all R&D investment projects in the region. Investments in sectors like electric power help deliver essential public services to large parts of the population. European companies in the region often lead the way in terms of private-sector commitment to environmental protection and labour standards. And ways of promoting further co-operation on Corporate Social Responsibility will be an important aspect of the discussions in Santiago. But the summit in Santiago will also cover other issues beyond investment. This reflects the fact that our long-standing partnership has always embodied a genuine community of values — in terms of human rights, democracy and social cohesion. Gender equality will be discussed, and become a new pillar of the common action plan guiding our co-operation between our biennial summits. We will seek ways to work more closely together on security challenges — for instance, how best to support the regional strategy developed by Central American countries. European and Latin American or Caribbean partners also have a common interest in finding ways of working together more closely and more effectively in multilateral organizations, for instance on climate change and sustainable development.
The European Union remains strongly committed to supporting economic and social development in Latin America and the Caribbean. The region’s impressive economic progress means that with some of its more dynamic economies, we will be discussing new forms of co-operation to replace the donor-beneficiary relationships of the past.
Mexican poet Octavio Paz famously once said that (Latin) America is “not so much a tradition to be continued, more a future to be made into reality.” This saying also neatly captures the potential and dynamism of our partnership between the European Union and the new Community of Latin American and Caribbean States.
This partnership also reflects a shared conviction that, in today’s inter-dependent world, on a range of common challenges both sides benefit from working together and can learn from each other. This should be the guiding principle of our discussions in Santiago, whether on investment, economic and social models, democracy or development.
Herman van Rompuy is president of the European Council and José Manuel Barroso the president of the European Commission.