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Latin America

rose to call attention to recent developments in Latin America; and to move for Papers. The noble Baroness said: My Lords, I was pleased to hear the very good news last Thursday that I had been successful in the ballot for this debate on developments in Latin America. Having waited patiently for all of last year for my luck to change, I was not prepared to say no when my chance came. Nevertheless, with the State Opening having taken place only last week and the break-up for the Whitsun Recess being today, time has been short, which has meant that a number of people who could have made significant contributions have sent me their apologies instead. I shall name but a few: my noble and learned friend Lord Howe, the former Foreign Secretary, who always speaks with knowledge and authority; the noble Lord, Lord Levy, the Prime Minister’s special envoy to Latin America; the noble Lord, Lord Brennan, who is even now speaking at a seminar in Madrid on this very subject as a vice-president of Canning House; and my noble friends Lord Moynihan and Lord Ashcroft, who have considerable first-hand knowledge of Cuba in particular. In spite of the short notice, I am absolutely delighted that your Lordships’ House has not failed to produce a list of distinguished speakers and I am most grateful to all of them. Today is also the first day on which we have our major timed debates at the end of the week’s Business rather than on a Wednesday afternoon. Perhaps it is appropriate that a debate on the New World should be the one to test these new procedures. We shall be testing also our new Foreign Office Minister in the Lords. The bright spot in all this is that the noble Lord, Lord Triesman, as the Minister who is now responsible for Latin American relations, will be able to let us know his initial reactions and underline his priorities. I am most grateful to him for deciding to forgo attending the EU-Rio Group meeting in Luxembourg, important as that is, in order to respond to this debate in your Lordships’ House. I have spoken previously, on numerous occasions, about Latin America as a regional power and in relation to individual countries. I do so again because I consider Latin America to be a vitally important part of the world. Not only is it important for us on a bilateral trade basis, but it is emerging as a global player in world trade and world institutional terms. The main object of today’s debate is to ensure that the United Kingdom is aware of this fact at a political level, even if the region is no longer on the Foreign Office’s priority list. As long as I remain in a position to do so, further reforms of the House of Lords permitting, I shall continue to remind Her Majesty’s Government—of whatever political complexion—of these facts if they fail to take them into account. Perhaps I may digress with a more a general comment on how disappointed I was during the recent general election campaign that barely a mention of the United Kingdom’s international role in the world was made by any of the political parties, other than with reference to Iraq and, now and again, to the European Union. I fear that we are becoming a very inward-looking country; that is, with the exception of the world of sport and football in particular. However, if we are still a trading nation, we must focus on our best-possible trading partners and the ones we know best. To omit the Latin American countries would be a grave mistake. Even if self-interest is not at stake, one of the consequences of globalisation is that we must learn to work with other countries in a variety of ways. So it is not just about trade, but about peacekeeping, about the fight against terrorism, the fight against drugs and so on. To seek out new friends only to neglect old ones does not really get us anywhere. I intend therefore to attempt to provide an overview of the region; to consider the implications of some recent developments; and then, if time permits, to touch on some issues that highlight the part played by Latin American countries in the global economy and global institutions. I feel confident that other speakers today, from their individual experiences and points of view, will add flavour and seasoning to the debate. I am aware of the danger of generalising, even I   inevitably regionalise. I do not forget that the 19   countries of Latin America, from Mexico in the north, through the Central American countries—not forgetting Cuba and the Dominican Republic—and down to Tierra del Fuego at the southernmost tip of Patagonia, are each very distinctive and sovereign nations. However, together, they comprise one quarter of the world’s population. They represent one third of the United Nations and they have six members on the UN Security Council. They also contain two of the most populated cities in the world—Mexico City at around 22 million people and Sao Paolo at around 19 million people. Brazil, Mexico and Chile are stars, in economic and many other ways, in anyone’s terms. The region has vast natural resources: oil and gas; water; precious stones and metals; human resources; and the agricultural products which form so much of the region’s trade. When I first went to Latin America as a post-graduate law student in Ecuador in the mid-1960s, military rule and populist economic polices had created instability and closed economies throughout the region. People used to joke that a golpe or coup d’état was a cheaper way of changing the government than holding a general election. What they would have thought of our debate on electoral reform a little earlier, I am not quite sure. At that time, oil wealth was only just on the horizon, and Venezuela, with its vast resources of oil as well as of water, gold and other commodities, was a rising star. Since that time, I have been to the region on many occasions as a Minister. I was not a Foreign Office Minister; I went as a health Minister. I have led trade missions there, and, as president of Canning House, I have organised, and spoken at, conferences throughout the region. I have also gone to the region for holidays to enjoy the wonders of the environment that Latin America offers such as Iguassu—the waterfalls between Argentina and Brazil—and the Galapagos Islands, not to mention the beauties of Latin America’s cultural heritage. Since that time, of course, things have changed. All Latin American countries now have democratically elected governments, most with strong presidencies, and there is undoubtedly more openness, transparency and freedom of expression, which in turn give rise to more accountability, if only through the media. Although, as in many parts of the world, confidence in institutions and the political class has fallen during the past decade, that is a result of economic underperformance, falling living standards and the ever-widening gap between rich and poor. That has been the cause, for example, of the recent problems in Bolivia, Ecuador and Venezuela. In this context, the role of parliamentarians is very important. I wish to endorse the work of the Inter-Parliamentary Union, in particular the United Kingdom branch, in welcoming delegations from Latin America and sending UK delegations out to enable exchanges of views and to explain different ways of doing things so that we understand each other. But the parliamentary role—or the congressional role—in many countries of Latin America is not as good as it should be. However, we look forward to the coming elections in Argentina, which are due to take place in October. On the trade front, the region remains heavily dependent on primary commodity exports, which leave it vulnerable to fluctuation in the terms of trade. As far as foreign trade goes, however, the region has become much more open in the past decade, with exports rising from 15 per cent of GDP in the first half of the 1990s to more than 20 per cent since 2000. The United States is the most important trading partner for Latin American countries. Proximity and   communications are factors, although trade diversification has increased. China is the current phenomenon; it is becoming an increasingly important market for the region’s metal and soya producers. I hope to be able to return to the subject of China, as it is also involved in much direct investment in Latin America and is entering into trade agreements. In the context of foreign trade, Mexico shines out because it accounts for around 50 per cent of the regional trade. At the same time, as part of all these changes, we have seen the rise of trade blocs such as Mercosur for the southern cone countries, the Andean Community for the mountainous regions of the south-west and the NAFTA agreement between Mexico and the other North American countries. We have also seen bilateral and multilateral agreements with the European Union and other international bodies and there are moves towards a free trade area of the Americas. The trade situation looks good. In terms of growth forecasts, the OECD considers that Latin America has increased its growth above world levels, having enjoyed a few years of very robust export performance and improved terms of trade, against an OECD prediction of world growth that is revised to 2.9 per cent for this year. Brazil, for example, which grew by 4.5 per cent in 2004, is likely to grow by 3.5 per cent for this year. Indeed, Brazil has been the beneficiary of one of three country-specific OECD programmes, the others being China and Russia, and this has been highly successful. It looks very probable that Brazil will follow Mexico as a full member of the OECD. I recognise that there is much more that I could and perhaps should say, but time does not permit. I also recognise that this is not just a government issue. We are fortunate in this country to have institutions such as bilateral chambers of commerce, cultural societies and Canning House, the Hispanic and Luso Brazilian Council. We also have the Economist Intelligence Unit, to which I am most grateful for some of my facts, and which provides a wonderfully comprehensive service. I refer also to the Institute for the Study of the Americas and, of course, the excellent group of Latin American ambassadors and our representatives in the region. Although diminishing in number, they are first class in quality. As a former president of Canning House, I should like to refer to just a few of the programmes, seminars and information services that it has provided in the past few months. There was a conference on the opportunities in PPP in Mexico and one called ““The Dominican Republic: Opportunities for Foreign Direct Investment””. There was a seminar on ““Politics & Poverty Reduction: DfID Experiences in Peru””—where, sadly, the programme has been closed down. There are also events covering growth   sustainability in Latin America and, most importantly, one in collaboration with the Inter-American Development Bank, called ““The Emergence of China: Opportunities and Challenges for Latin America and the Caribbean””. That probably is a subject worthy of a completely separate debate, and I look forward to that possibility. Apart from the size and potential of these countries for the future and the added reasons why investment in and collaboration with those countries is becoming more reliable, let us not forget in our approach to the so-called modernising of our relations with them the significant historic and traditional links dating back virtually to 1492. In the period of the first Elizabeth, a lot of the booty which was won by her sailors came from the Americas—Latin America, the new world. Through George Canning, there was support for the   liberation movements in the early part of the 19th   century and recognition for the new nation states. In 1853, we were the first country in the world to recognise Paraguay as an independent country, yet one month ago, we closed the embassy there, which in fact operated at negligible cost. We have just celebrated the UK recognition of Colombia’s independence 180 years ago. Again, we were the first country to do so. Last week on its Navy Day, the Chilean Navy recognised that Admiral Lord Corcoran was its founder. In conclusion, I wish to contend, as forcefully as I can, that a policy of benign neglect in our relations with Latin American countries, which is what I believe we are seeing from the Government through the FCO and the DTI, is wasteful and ignores the facts. I beg to move for Papers.