Uruguay, 1998

Uruguay comes to the Assembly today with happiness,

pride and even excitement at seeing you, Sir, a

countryman of ours, representing Uruguay, as President

of the Assembly. Uruguay was a founding Member of the

United Nations and has been one of the its most active

participants ever since, in all its endeavours. It has even

contributed its best soldiers, who put their lives on the

line every day in the difficult peacekeeping operations of

the United Nations.

Our country came to this Organization at the time of

its founding with the hopes and dreams of a world that

was being rebuilt in order to usher in a time of peace,

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prosperity and stability. It certainly did not come here with

any dreams of power, which could have had no place in our

country given its small land area and relatively small

economy. But we did harbour the dream that has inspired

all our great statesmen — that of being a small, model

country which in the past century made secular education

universal, free and compulsory and built a State of well-

being with a solid middle class as the foundation of its

political democracy. Thus did our country feel that it was

a fundamental part of the democratic development of

nations.

Unfortunately, we were not exempt from the upheavals

and consequences of the cold war. As the Assembly knows,

the cold war was bloody and fierce in Latin America. The

hemispheres were locked in a state of conflict over

positions: here guerrilla wars and there coups d’état, both

manifestations themselves as part of a hellish dialectic in

which democracies were wounded and sometimes fell.

The last few years have shown Uruguay to be a

country which is making strides in its economy and

prosperity and which, as the recently published United

Nations Human Development Index states, is once again

making progress. It ranks third among developing countries,

and we can say that we have attained the best improvement

in the hemisphere with regard to poverty indicators.

However, we come to this session not only with the

concerns about its institutions and peace which always

permeate the spirit of the Assembly; we come here also

having seen the spectre of a crisis which began as an Asian

financial crisis and which today is a global economic crisis

that touches all of us. This undoubtedly deserves particular

concern. When we see stock markets carried away by a

microclimate of psychosis, and when we see so many

irrational phenomena spread, we feel like Anatole France,

who saw life as a struggle among various forces, of which

we are not always able to know which is the strongest. At

times it seems that science and intelligence predominate. At

other times it seems that lunacy and fear prevail. This is

also part of this phenomenon that started as a financial

crisis and then became a very peculiar psychological

phenomenon. The point is that, both as Latin Americans

and as a member State of the international community, we

must once again face this situation.

Shakespeare, who is often quoted in connection with

major tragedies, said that fate dealt the cards but we were

the players. That is our challenge today: how to play our

cards in this crisis which could even affect not just finances

and economies but also the democratic stability of our

countries, our social peace and the fundamental values

which inspire us.

In the 1980s Latin America went through very

difficult economic years. This is referred to — mistakenly

in my judgement — as the lost decade, for those were

also the years in which we consolidated the strongest

process of democratization in our continent, which today

allows it to have more democracies and freedoms than

ever before. Countries which had never before known

democracy are now building republics and institutions and

developing their societies.

The fact is that after that crisis our countries made

enormous efforts at transformation. They lowered their

rates of inflation, opened up their economies and began

strong processes of integration — in the Andean area, in

Mexico to the north and with us in the south, Argentina,

Brazil and Uruguay, and now with Bolivia and Chile as

associate partners, to the south. All of this meant that we

had a Latin America which was growing again and which

would once again be a place for investments; a Latin

America which was able to harmonize the return of

democracy and peace with economic growth.

We now find ourselves faced with the new crisis.

What should we do? In our view, the first thing to do is

to consolidate and support the Organization and the

international community. We should do that here, in this

institution, which is a hymn to internationalism, as well

as in the economic area. The International Monetary Fund

(IMF), the World Bank and the Inter-American

Development Bank — which is the main source of

financing for our hemisphere — are the tools we rely on

today. We must strengthen them.

Indeed, this crisis will leave behind consequences

once it is over. Somehow the debate that took place

between Lord Keynes and Harry White, at the time of the

establishment of the International Monetary Fund at

Bretton Woods, hangs over the world today. The British

economist held the view that it was necessary to have a

central bank of central banks. I shall not bring in that

debate here today, but I think that it will nevertheless

have to take place once the crucial moments of this crisis

are over, because of the need for prevention and for a

market economy which actually works.

We must all feel and know that the origins of this

crisis have been identified. First, there has been excessive

speculation, which has been clearly reflected in stock

markets. It also stems from macroeconomic imbalances in

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many States, which have not been able to correct those

imbalances, mainly their fiscal gaps, that have been

fundamental causes of this situation.

Fortunately, the North American economy and the

European economy still appear to be solid. Japan is the

country of which we are all hoping for a recovery so that

the measures under way today will allow us to view much

more calmly the future of this situation, which could very

well continue for a long time. As the Brazilian Foreign

Minister said today, the magnitude and the duration of this

crisis are unpredictable, but what should not be

unpredictable is the behaviour of States.

Therefore, it is essential that we act to bring to an end

those financial imbalances and avoid the mistakes and

temptations related to such crises. First, we should not

believe that by isolating ourselves in neo-protectionism we

will find a way out of the crisis.

In Latin America in the 1980s we had an external debt

crisis. There were those who advocated not repaying the

debt and returning in some way to more protected

economies. There were those of us, on the other hand, who

thought that the debt should be refinanced and that we

should join the international community more actively and

in that way grow again. Only by growing our economies

could the external debt be made manageable in the future.

The former, unfortunately, were not lucky and the latter,

fortunately, were. In that way, we were able to refinance

the external debt and return to investment, and growth

enabled us to pay off the debt effectively and thus achieve

better living conditions for our peoples.

Turmoil and speculation are not what are most needed

for the prosperity of needy peoples. To the contrary, profit-

making opportunities for speculators come at the expense

of the majority.

That is the path that we see clearly defined today for

this situation, and we must all redouble our efforts in that

direction. We will also have to strengthen anew the

international financial community so that there can exist a

real international safety net that will allow us to work in

peace.

Of course, the leading economic countries have a great

responsibility. President Clinton said last week that this was

the most important economic and financial crisis of the

second half of the century, and no doubt it is. That is all

the more reason for the major economies to assume their

responsibilities and for smaller economies, such as ours,

which basically seeks more and more equitable living

conditions, to try not to bring bad news to the world,

even while lacking the capacity and opportunity to be

those who can offer the world good news.

We should thus protect ourselves from a dangerous

neo-protectionism and continue to fight for increasingly

open and transparent markets, from which the persistent

subsidies in the large States disappear — subsidies in the

United States and the European Community, agricultural

subsidies which undoubtedly are a troublesome factor in

international economic activities and must be left behind.

If the crisis teaches us anything, it is that we must find

balance, and balance will not be found on the basis of

subsidies which continue to promote opportunity for

artificial economic sectors.

We must also protect ourselves from messianic

demagoguery, which is the political dimension of this

crisis. For that reason, warding off and resolving the crisis

through international cooperation and concrete measures

are also very important in a democratic context. When

such instabilities occur, messianic demagogues appear, all

those pyrotechnists of prosperity who have always led

peoples to misfortune and to whom we should not offer,

through instability, another opportunity.

This is therefore a financial and economic crisis, and

ultimately a crisis in political democracy. It is the

fundamental chapter through which we must continue to

work here.

Our world is living in disconcerting times. In 1989,

it seemed, with the market economy triumphant over the

socialist economy and liberal democracy triumphant over

the Communist world, that we were entering an era of

peace and stability in which the old Hegelian dialectics

would yield to a world of synthesis — what was termed

the end of history, what others called the pensée unique.

Undoubtedly, that was an oversimplification.

Today it would also be an oversimplification to

believe that we have once again entered the crisis of

capitalism. In my long political career, I have been

invited many times to the funeral of capitalism. Times

have definitely shown that the market economy, with its

dynamics and its spirit of initiative, once again recovered,

and this will happen again now because no one is

pointing to a better alternative.

Therefore, we must not fall into another

oversimplification. At one point we believed that the

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simple freeing of markets would bring about the miraculous

result of achieving growth and equity; we cannot now

return to the past and believe that through closed

economies, through stronger protectionist measures or even

through authoritarianism we will be able to resolve a

situation that, now more than ever, must be addressed with

the guidance of democratic principles.

No one has a clear road map. Thus, there is all the

more reason to reaffirm the basic principles, the first one

being political democracy, which calls on us, as President

Clinton said earlier, to fight against terrorism, which

through violence attacks democracy, in all its forms, from

the outside; and to fight against the enemies which

democracy generates from within. At times we have

suffered from excessive political passion, which sometimes

leads to divisions within countries, intolerance, racial

hatred, abuse of economic power and abuse of the media;

all of these factors are part of a democracy, but when used

without ethical limits they may weaken it.

We also have a right to ask the citizen to participate.

It is not through an alienated or indifferent citizenry that

democracy will be strengthened. Democracy will be closely

related to an efficient State, for only an efficient State can

stand united if the objective is to improve the lives of our

people, only a State which is not a mechanism for waste,

but rather a strong instrument to promote the forces of

society; to a market economy and increasingly open trade

based on standards that protect us from unfair competition;

and to a process of integration such as those being carried

out in the Latin American countries to enable us to join the

world with suitable economies to improve our production.

We must also think of the basic values of our

societies, such as the family, which is the historic nucleus

of our civilization. The weakening of the family has come

at a high price. Today, the drug trade reflects the spiritual

scourge of societies which, in their economic development,

have lost sight of spiritual values. Such societies have

weakened the family in a world where images, emptiness

and passing trends have caused a vacuum that in turn

causes the phenomenon of the search for artificial paradises

that aim to replace a meaningful life. We must enhance

spiritual factors to give democracies genuine content.

We must, of course, be pragmatical in economic

matters, but pragmatism alone will not keep alive the hopes

of peoples. We must strengthen family values, human

dignity and the universality of human rights, as our friend

President Mandela has said. We must all respect ethnic

individuality; in the final analysis we are all the same. We

must all fight against racial discrimination; we must all

respect and be very mindful of cultural diversity. But no

ethnic or cultural diversity can sanction the enslavement

of women or the killing of men: we are speaking here of

universal values that are essential to the Universal

Declaration of Human Rights and that we must not only

proclaim but must also practice.

As Toynbee said, “Civilization is a movement and

not a condition, a voyage and not a harbour” (Readers

Digest, October 1958). We must therefore clearly identify

the stars that will guide us on that voyage. It is in those

stars that Uruguay believes.