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Tuesday, March 26 2019 @ 07:05 PM UTC

Here's how Obama can aid Latin economies

Money MattersBY ANDRES OPPENHEIMER for the Miami Herald - When President Barack Obama meets with 33 hemispheric leaders at the Summit of the Americas later this week, most media attention will focus on whether there will be a thaw in U.S. ties with Venezuela and Cuba. But the No. 1 issue for most participating leaders will be how to prevent a Latin American economic debacle. U.S. officials involved in the preparations of Obama's trip to the April 17-19 summit in Trinidad worry that Latin America's past six years of healthy economic growth and poverty reduction could come to an abrupt end as a result of the global economic crisis and lead to a new era of economic and political instability. Despite claims by several Latin American presidents that their countries will be able to survive the crisis relatively unscathed, the region's economy will drop by 0.3 percent this year after six years of more than 5 percent annual growth rates, according to United Nations figures. (more)

The World Bank says the number of the region's poor will increase by six million this year.

What could Obama realistically offer at the summit to help Latin America avert a deeper economic crisis?

Considering that he won't be able to deliver the big U.S. aid increases to the region that he promised during the campaign -- he is already being criticized for spending too much at home and abroad -- Obama may focus on a few less grandiose but politically doable economic goals. Among them:

• Commit himself to ensuring that the $1 trillion recently vowed by the United States and Europe to the International Monetary Fund (IMF) for financial help to financially strangled emerging economies is made available to Latin American countries. U.S. officials say that half of the funds will be offered to Eastern Europe and half to Latin America, but experts fear that the money will go mostly to Eastern Europe.

• Expedite negotiations to increase the capital of the $120 billion Inter-American Development Bank (IADB), so that the regional bank can increase its loans to Latin America.

While IMF loans help countries balance their books, IADB loans go for job-generating development projects such as railroads and schools.

''This should be approved quick, this year,'' IADB President Luis Alberto Moreno told me, referring to the bank's capitalization. ``Otherwise, these talks can drag on for two or three years.''

Barring quick action by IADB top member countries, the regional bank may have to reduce its lending from $18 billion this year to $6 billion in 2010, bank officials say.

• Enlarge existing U.S. alternative energy agreements with Brazil and Central America to jointly produce sugar-based ethanol and other alternative fuels.

Rather than proposing one region-wide energy partnership program, which Brazil opposes, Obama is likely to launch half a dozen separate alternative energy plans with different countries, U.S. officials say.

• Expand the three-year $1.4 billion Merida Initiative -- a U.S. law to provide Mexico and Central America with training and equipment to fight drug-related violence -- to Caribbean countries, amid a wider partnership with Latin America to help reduce the crime wave affecting the region.

• Get Congress to approve the pending U.S. free trade agreements with Panama and Colombia.

• Help reduce America's stratospheric healthcare costs by launching a healthcare deal with Latin America, whereby U.S. citizens would be able to use their health insurance in U.S.-certified hospitals in Latin America and the Caribbean.

With more than 100 million Americans retiring over the next 30 years, Latin America could become a major destination for U.S. seniors seeking good medical care, sun and affordable prices in the region's best healthcare centers.

My opinion: Obama will make a big splash at the Trinidad summit if, in addition to saying ''I'm here to listen,'' he starts out by admitting the U.S. responsibility in the current global financial crisis.

Much like Secretary of State Hillary Clinton did during her recent trip to Mexico, when she validated a long-standing Latin American grievance by conceding that U.S. consumption is fueling the drug trade, Obama should -- and I suspect he will -- say that U.S. regulatory failures caused much of the current global crisis and that Latin America should not be punished by the world credit crunch.

If he says that, and supports most of the above-mentioned economic proposals, Obama will win over most heads of state at the summit, no matter how much Venezuela's Hugo Chávez tries to steal the show -- or how much we in the media focus on Venezuela and Cuba.

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