MONTEVIDEO CIRCLE MEETS IN COSTA RICA

UNCLAS SECTION 01 OF 02 SAN JOSE 000277

SIPDIS

SENSITIVE, SIPDIS

DEPT FOR WHA/CEN JASON MACK

E.O. 12958: N/A
TAGS: PREL PGOV KDEM XM CS
SUBJECT: MONTEVIDEO CIRCLE MEETS IN COSTA RICA

1. (U) SUMMARY: Costa Rica hosted the Montevideo Circle, a
discussion forum for current and former presidents of Latin America,
on January 27-28, 2007. The group's topic of discussion was:
"Democratic Stability and Opening: Unpredictable Factors for Latin

America in the 21st Century," and the participants' remarks largely
coincided with USG objectives for the region, including Costa Rican
ratification of DR-CAFTA. The meeting was covered extensively in all
domestic newspapers. This cable reports excerpts of the press
coverage. END SUMMARY.
GENERAL THEMES: INVESTMENT/TRADE THE MOTORS OF DEVELOPMENT

2. (U) Former presidents Julio Mara Sanguinetti of Uruguay
(founder of the Montevideo Circle),Ricardo Lagos of Chile, and
Fernando Henrique Cardoso of Brazil promoted free trade and
investment attraction as the motor of development for Latin American
countries. "Globalization has arrived to stay," said Lagos.
Colombian president Alvaro Uribe, host Sscar Arias, and other
speakers insisted that Latin America must insert itself into the
world market. They agreed that only through global trade will
countries achieve real development and lessen domestic income
inequalities.

3. (U) Former Colombian president Belisario Betancour and former
Spanish leader Felipe Gonzlez warned of the possibility of the
region becoming "the region of the world with the most inequality."
Betancour stated that external debt, lack of social infrastructure
and schools, along with hunger and misery work against progress. He
also stressed that "education is the key to leaving hunger behind."


ARIAS - DEVELOPMENT MUST BE BASED ON EDUCATION

4. (U) As host, Arias stuck to familiar themes in his opening
address. He asked "What good is it if Latin America has regained
democracy if it is incapable of putting food in its peoples' mouths,
putting a roof over their childrens' heads? What good is it if a
peasant signs a presidential ballot if he knows nothing more than
signing his name? Democracy cannot live without food or a roof.
Human development must be based on education. One in three children
do not go to secondary school (in Costa Rica). Today's educational
failure is tomorrow's economic failure." Arias emphasized that
hunger, ignorance, and frustration fertilize the ground for a
resurgence of authoritarianism and that democracy should complement
prosperity and development. Otherwise, he warned, the task of
maintaining respect for liberties will be titanic. Using Cuba as an
example, Arias warned that Latin America runs a serious risk of
returning to dictatorship.
SANGUINETTI - INVESTMENT MEANS GROWTH AND JOBS; FREE TRADE
AGREEMENTS (FTAs) HELP COUNTRIES MOVE FORWARD

5. (U) Sanguinetti told an interviewer, "Only investment brings
growth and generates jobs. We are entering a new century, but
walking backwards with an archaic debate. Globalization is a real,
scientific fact." Sanguinetti insisted that economies must open,
given the experience of Latin American countries which have opened
their economies. "In general, I think that economies either open or
fall behind. To incorporate ourselves into the global world is not
ideology, it's a fact. Of course, a market economy assumes more
open competition, that's the challenge. One has to get used to the
vigorousness of competition."

6. (U) When asked how the Montevideo Circle views the new Latin
American Left Sanguinetti replied, "This is a discussion group with
free opinions. We have the common conviction about democracy and
freedom. In Latin America, unfortunately, we are living in a new
stage of fragmentation after years of seeking integration. Mercosur
and the Andean Community are in crisis. Perhaps the most effective
and efficient integration process is in Central America."
Sanguinetti stressed, "True democracy is based on dialogue and real
consensus, with the objective to find mechanisms that solve the
social and economic needs of each country." He concluded, "In
Europe the Berlin Wall fell, but not in Latin America.
Liberalization has achieved positive but minor effects. FTAs do not
substitute for development strategies, but they are necessary for
countries to enter new markets."
LAGOS - FTAs PROTECT SMALL COUNTRIES; GROWTH AND INVESTMENT CAN HELP
THE POOR


7. (U) Lagos told the media that "free trade agreements give us
market access; they are instruments that countries must know how to
use," he continued. "Technological innovation and even unique
cultural traits could be small countries' strengths. Training people
how to confront the issue of globalization with the right skills
seems fundamental to me. There was a clear conviction that we were
going to tie Chile's growth to our capacity to link to the world and
exports were to play an important role as a measure of our growth.
But the most important public policies are those that assure
economic growth reaches those most in need."


8. (U) Lagos opined that a hemispheric debate has begun over which
is the fastest and most efficient way to eliminate the huge gap
between rich and poor. "For me, the fastest way is growth and to
grow you have to invest. Once [an economy] has the growth, then
public policies can be created to help those who have less." Lagos
described the region's lean to the left as a search for political
solutions to resolve the inequality dilemma. "Now we are a middle

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1. (U) SUMMARY: Costa Rica hosted the Montevideo Circle, a
discussion forum for current and former presidents of Latin America,
on January 27-28, 2007. The group's topic of discussion was:
"Democratic Stability and Opening: Unpredictable Factors for Latin
America in the 21st Century," and the participants' remarks largely
coincided with USG objectives for the region, including Costa Rican
ratification of DR-CAFTA. The meeting was covered extensively in all
domestic newspapers. This cable reports excerpts of the press
coverage. END SUMMARY.
GENERAL THEMES: INVESTMENT/TRADE THE MOTORS OF DEVELOPMENT

2. (U) Former presidents Julio Mara Sanguinetti of Uruguay
(founder of the Montevideo Circle),Ricardo Lagos of Chile, and
Fernando Henrique Cardoso of Brazil promoted free trade and
investment attraction as the motor of development for Latin American
countries. "Globalization has arrived to stay," said Lagos.
Colombian president Alvaro Uribe, host Sscar Arias, and other
speakers insisted that Latin America must insert itself into the
world market. They agreed that only through global trade will
countries achieve real development and lessen domestic income
inequalities.

3. (U) Former Colombian president Belisario Betancour and former
Spanish leader Felipe Gonzlez warned of the possibility of the
region becoming "the region of the world with the most inequality."
Betancour stated that external debt, lack of social infrastructure
and schools, along with hunger and misery work against progress. He
also stressed that "education is the key to leaving hunger behind."

income hemisphere, but the difference between rich and poor is as
unjust as when we were a poor hemisphere. This isn't Africa, but
close."
CARDOSO - MUST OVERCOME INEQUALITY IN EDUCATION

9. (U) The former Brazilian leader echoed Arias's comments on
education. "There is an immense inequality in education," he said,
which must be reduced to "confront change." Cardoso urged Latin
American universities, which he described as "isolated" and far from
businesses that generate jobs and from the governments that dictate
policies, to better integrate themselves into this mainstream.
COMMENT:

10. (SBU) Our MFA contacts made clear this was an initiative of
President Arias's office, and not the Ministry. Hosting this event
is certainly in keeping with Arias's penchant to discuss (and to be
seen as discussing) issues of global and regional import. One San
Jose-based diplomat hinted to the Ambassador that this latest
Montevideo Circle event was intended to be not just another
gab-fest, but as a first step to developing a thoughtful regional
counterweight to Chavez-style populism. Uribe's presence (and
Arias's hosting) gave the meeting a higher and more relevant
profile, and the participants' public remarks largely coincided with
USG objectives for the region, including Costa Rican ratification of
DR-CAFTA. However, more than just a well-publicized conference will
be needed to develop a regional antidote to Chavez, Ortega and Co.


LANGDALE