Secretary's Speech

U.S. Commerce Secretary Carlos M. Gutierrez Remarks to Miami Herald Americas Conference
Coral Gables, Florida

Thank you. Thank you for that kind introduction. It's an honor to join you at this impressive assembly.

Time of Great Opportunity
This is a time of great opportunity and great hope for Latin Americans. There are more governments elected by the people than ever before.

The delegates at the Summit of the Americas last November represented 34 democratically-elected governments. So far this year, there have been seven elections, with five more to come.

And, while we hear that Latin America is veering to the left, toward radicalism and populism, the majority of these elected leaders are pro-democracy, pro-business and investment, and pro-private job creation.

They have a clear understanding of the time in which we live. The radicals and populists, on the other hand, do not. They are in the minority. They are the exception.

Results Matter
In today's world, what matters most are results. Governments, like businesses, are judged by the results they deliver for their people.

Progress is being made.

• In 2004, foreign direct investment in Latin America was over $54 billion -- a 46 percent increase over 2003.
• The International Monetary Fund reports that Latin American economies grew on average, a robust 4.3 percent in 2005, fueled by demand for commodities.
• The World Bank reports that several Latin American nations are among the top reformers who are making it easier to do business for established companies, and reducing the time it takes to open a new business.

Reformers simplified business regulations. They strengthened property rights and eased tax burdens. They increased access to credit and they reduced the cost of exporting and importing.

• Peru introduced specialized courts, cutting delays in enforcing contracts. Tougher disclosure rules strengthened investor protections, and business registration was streamlined.
• Honduras and Uruguay reduced the time to start a business and revised their laws to support sharing credit information, making it easier for lenders to evaluate creditworthiness.
• Mexico has a new securities law that increases scrutiny of insider dealings. And it cut corporate income tax rates to 29 percent from 33 percent.
• El Salvador, Nicaragua, and Panama also eased access to credit by reforming their credit information laws.
• Nicaragua cut its property transfer tax to 1 percent from 4 percent.
• Brazil improved court efficiency by limiting frivolous appeals and simplifying enforcement of judgments.
• Paraguay lowered corporate income tax rates to 10 percent from 30 percent.

More To Do
The trend favors those who welcome investment and are relentlessly seeking opportunities for real job creation.

But we know there is still much more to do. All countries are competing for capital in a global market, so everyone needs to raise the bar.

What successful leaders know is that business investment brings a multitude of benefits, including jobs and more revenue for health and education.

Business investment helps an entire country. Business investment helps advance social justice.

President Bush understands this. That's why he's asked me to convene the first-ever Western Hemisphere Competitiveness Forum. The forum will be held next Spring in the United States.

It will be an excellent opportunity to work on policies and strategies that attract investment and promote free enterprise throughout the region at a time when we are facing ever-growing competition from Asia and elsewhere.

This is key: If the region is to reach its full economic potential, education needs to be a priority. Education is the region's single biggest challenge.

The United Nations estimates that poverty rates in some western hemispheric countries are as high as 40 percent.

Education is the ticket to a better life. Education gives everyone the tools to succeed. It's not about giving people charity. It's about opportunity. And education in a free society leads to the greatest opportunities.

That's real social justice.

Somehow, social justice is a term hijacked by populists.

But social justice is not about making everyone poor. Social justice is about creating opportunity for everyone.

Social justice is about ensuring that no one is above, or below the law.

Social justice, fundamentally, is about making all peoples' lives better, not making all peoples' lives worse.

Cuba
I'm always surprised when people use the term "social justice" to describe the so-called revolution in Cuba.

Think about Cuba: The Cuban government has had 47 years to improve the lives of the people of Cuba.

Today, when most of Latin America is poised to seize the opportunities of the 21st century, Cuba is stuck in the middle of the 20th century.

Costa Rican President Oscar Arias recently said that after 47 years of revolutionary government, now is the time for the Cuban people to choose their own leaders.

As we have made clear on many occasions -- the most recent being our Compact with the Cuban People -- we stand ready to assist Cuba in making a transition to democracy. Cubans will decide, let them decide. But we're not doing business with Raul, simply another military dictator.

In fact, virtually the entire hemisphere stands ready to welcome a democratic Cuba back into the inter-American fold. And they stand ready to help Cuba meet the tremendous challenges of reconstruction and modernization.

Two decades ago, Chile also had a dictatorship. And like Cuba, it was a military dictatorship.

And they made a decision to undertake a referendum to ask the people what they wanted. They were asked: A simple "yes" or "no" to dictatorship.

And the people said NO!! to dictatorship. And Chile made a very successful transition to freedom and democracy.

So I say to the Cuban regime: Why not ask the people? Let the Cuban people speak. Let the Cuban people determine their own destiny.

Let the Cuban people work with their brothers and sisters in the region, with the Organization of American States and others on a democratic referendum.

Why would a real leader be insecure about giving his people a voice?!

A democratic referendum would be a victory for social justice, and a victory for the Cuban people.

Conclusion
This conference asks: "Can Latin America Compete?" The key is continuity, a long-term commitment to a pro-growth, pro-education, pro-opportunity agenda.

Let me give you an example: Ireland.

Think about where Ireland was a generation ago. They were Europe’s poorest nation, by most any measure.

• Ireland's per capita GDP was less that 70 percent of the European Union average.

They had high taxes, high unemployment, stagnant economic growth, a horrible education system, a massive exodus of their people year after year.

How did Europe’s problem country grow up to be a Tiger?

• It cut corporate taxes on foreign multinationals to zero.
• It negotiated a free trade agreement with the United Kingdom, and later joined the EU.
• It became a magnet for foreign investors.
• And it began investing heavily in secondary and higher education, producing a pool of highly-skilled workers and investors.

And they did all of this consistently for over 20 years. And they did it regardless of the government party that was in power. They stuck to their plan.

Today Ireland is a Celtic Tiger -- the envy of Europe.

• Its per capita GDP is almost 140 percent of the EU average, and moving higher.
• Over the last three decades, Ireland's real GDP growth averaged 6.2 percent. Europe's largest economy, Germany, averaged 2.4 percent.
• Real GDP growth per capita (per person) averaged 5.3 percent. In Germany, the average was 2.1 percent.
• Ireland’s jobless rate in 1985 was painfully high at 17 percent. Today at 4.4 percent, it is among the lowest unemployment rates in the European Union.
• And extremely important for Ireland's future: the jobless rate for its youth, those under 25 years of age, is 8.1 percent, which is less than half the rate for the European Union.

I believe there are many Irelands in Latin America. This can be Latin America's time. Latin America can do it. It can embrace economic freedom and the power of entrepreneurship which have built so many strong and lasting democracies.

So, the promise of true social justice is at our grasp. I look forward to working with you to make the Western Hemisphere a shining example for the rest of the world.

Thank you and God bless you.