Source: http://worldcityweb.com/home/MIA/publications/magazine/49/837/

(1) Opinion - The Left-Behinds

by Mary Dempsey

Perus business sector is bustling, yet the country is beset with political fragmentation and strikes, most recently by teachers and miners. Colombian President lvaro Uribe, who saw his popularity soar when violent crime plummeted, is scrambling to appease an unhappy electorate clamoring for more jobs. Despite growing trade, crime and violence continue to escalate in Central America.

Latin Americas treasuries are jammed with international reserves, foreign debt is paid down and hyperinflation is but a memory. Commodity markets continue strong and democratic processes have gained greater footholds. Then why cant the region shake its old problems?

The most complicated issue is that most countries are not doing enough to counter high inequality, says Guillermo Perry, the World Banks chief economist for Latin America and the Caribbean. Too many people are neither benefiting from the regions newfound economic growth nor contributing to it.

Perry was among the participants at this years Conference on Trade and Investment in the Americas, an annual gathering sponsored by Caracas-based development bank Corporacin
Andina de Fomento, the Organization of American States and the Inter-American Dialogue, a Washington, D.C., think tank. CAF President Enrique Garca, OAS Secretary General Jos
Miguel Insulza, Inter-American Development Bank President Luis Alberto Moreno and Inter-American Dialogue President Peter Hakim were joined by U.S. Congress members and Latin American policymakers, as well as economists, policy makers, journalists and corporate and financial leaders.

During two days of discussions, participants lauded the regions boom, which shows little sign of ending. Then they furrowed their collective brow and debated the downside.

For starters, even as trade flourishes throughout the region, relevant jobs are not being created, meaning that, for the large part, workers remain in the underground economy. Even in places where poverty levels are falling, notably Venezuela and Brazil, government subsidies, rather than sustainable solutions, are the reason. Bolivias swelling reserves and GDP growth have more to
do with renegotiated energy contracts with Argentina and Brazil than with real reforms.

Theres more. The regions productivity lags that of Asia. There is no upward mobility for workers. The poor are still poor. Michael Shifter, vice president of policy at the Inter-American Dialogue, offered Perus robust economy as a compelling argument that economic growth and poverty reduction are simply not enough in Latin America. There must be a commitment to justice and other issues, he said.

Back to basics

If Latin America is to be a global player, it needs smart workers. And that means boosting the commitment to education. One of the most powerful lifelines for poor children is education, Marcelo Neri, director of the Fundao Getlio Vargas Center of Social Policies in Brazil, told the trade and investment conference.

Certainly, there have been educational advances in the region in recent years, but they have been limited and scattered. And even if school books and teachers can make their way to the rural backwaters for rural children are the most isolated education no longer means the Three Rs. It now must include computer literacy, financial literacy and science literacy.

Some executives, disillusioned or impatient with government sluggishness on the education front, have stepped up to the plate behind private sector initiatives. In Miami, Diego Stecchi, Ferragamos director of Latin America and the Caribbean, along with Roberto Cavalcanti, the former Latin America president for American Express, sits on the board of Libros Sin Fronteras, which takes books to children in Nicaragua.

Caterpillar, frustrated by the dearth of skilled mechanics to support its booming business in Latin America, bankrolled a vocational school in Peru. Microsoft has partnered with the Bradesco Foundation to sponsor information technology training centers in poor areas of Brazil. And the Riecken Foundation, my new employer, invests in human capital development by opening community libraries in Honduras and Guatemala.

Because the foundation believes access to information is crucial to in the 21st century, the 60-plus libraries now in operation are being equipped with free Internet connections. The libraries also loan books, support youth clubs and schedule classes customized to their communities.
Most are run by local volunteer boards. All of them are staffed by trained librarians.

Allen Andersson, the Washington, D.C.-based venture capitalist who started the Riecken Foundation, is a social entrepreneur who believes knowledge is the tool that will carry Central America into the future. Already, workers in remote villages are using their libraries computers to
do electronic banking, teens are learning about global warming on the Internet and adults are researching online correspondence classes.

Anoop Singh, director of the Western Hemisphere Department at the International Monetary Fund, has called for Latin America to become more active in improving access to education, adding that the region has the resources it needs, but it does not use them equitably.

Now, while economies are thriving, is the time for the business community to make a dynamic commitment to end Latin Americas long legacy of left-behinds. Knowledge brings strengthened democracies and, thus, better governments and institutions. Education is the petri dish for better
workers, better consumers and better business.

Mary Dempsey was editor of WorldCity Business from July 2005 to February 2007. She moved to Washington, D.C. early this year and, in September, joined the Riecken Foundation, as director of communications. Mary can be reached at mdempsey@riecken.org.