Latin America and the Caribbean

Presentation of the Latin American Economic Outlook 2008 in Brussels - 13 December 2007




  While the Heads of State of the 27 Members of the European Union were signing the new EU Treaty in Lisbon on 13 December 2007, the OECD Latin American Economic Outlook was being presented in Brussels at an event hosted by the European Commission.


  The European Commissioner for Economic and Monetary Affairs, Joaquín Almunia, introduced the first session of the seminar, which was chaired by Mr. Alvaro Aguiar—Advisor

to the Minister of State and Finance of Portugal, who chairs the presidency of the European Council. Welcoming the OECD’s increasing attention to Latin America, Mr. Almunia remarked that the EU is Latin America’s second largest trading partner, but “beyond trade and investment the relationship between both continents is one based on common values”. The commissioner identified poverty and inequality as being Latin America’s main challenges, highlighting the role that fiscal policy can play in addressing them. He described the EU Commission’s approach to Latin America, which focuses on fostering regional integration and promoting social cohesion.


  Following a detailed presentation of the report by the Acting Director of the OECD Development Centre, Javier Santiso, a panel discussion chaired by the Director for International Affairs of the European Commission Directorate General for Economic and Financial Affairs, Antonio de Lecea, commented on the report’s main conclusions. João Aguiar Machado, Deputy Director General of the European Commission Directorate General for External Relations, emphasised that low levels of fiscal legitimacy block fiscal reform in the region, a necessary step to improving social cohesion. He also added that increasing tax revenue remains one of the main challenges for Latin American economies. André Sapir, Senior Fellow at the think tank Bruegel, agreed with Mr. Aguiar Machado in a call for further revenue collection. He also highlighted the need to make social spending more progressive and invited the OECD to explore further the relationship between tax revenue and government revenue as a means of explaining the political situation in countries like Venezuela. Finally, Telefonica’s Director of Strategy for Latin America, Eduardo Navarro, drew on the experience of his company to discuss how the private sector can contribute to development in the region.