Q. Mr. President, you're seen as a spokesman for the Third World. What should the relationship be between developing and industrialized countries?
A. First, the countries of Latin America must make concerted efforts among / themselves, then coordinate with other developing countries so as to enhance our bargaining power. There is a need for a new North-South summit that would deal with some issues involving the security of the whole world. I think we have to recognize that today's problems are global and that interdependence is both a problem and a solution. That's a central theme, and it's why a North- South conference is indispensable.
Today we can identify three problems that affect the North and the South equally: debt, drug trafficking and the environment. These are three fundamental problems about which we could have a broad and constructive dialogue.
Q. The Bush Administration has put forward the Brady Plan, whereby the U.S. Government urges private banks to provide some relief to debtor nations. Yet you've called it timid.
A. The problem is that it's not a plan -- it's an idea. What we call the Brady Plan is an extraordinary initiative. It recognizes that debt is a political problem -- one of the major issues of world security -- and not just a matter between U.S. banks and Latin American nations. The Brady Plan has as its basis the reduction of debt and the realization that the countries of Latin America cannot continue servicing their debt in the way the banks have obliged us to up to now. In the past five years, Latin America has paid back the total amount of its debt service, yet now it owes more than before. And what is the result? The economic growth of Latin America is now zero. Our countries have had to commit more than 50% of the value of our exports to debt service. That's intolerable. No country in the world can do this. If the U.S. was forced to accept these conditions to pay its debt, that would be really disastrous.
In order for the Brady Plan to be more than just an idea, in order for it to work, the decision of the banks ((to reduce debt)) must not be voluntary. The U.S. Government should modify certain banking regulations to facilitate the concessions that the debtor countries are asking for.
American public opinion must understand that we are not asking for a gift or for debt forgiveness. We want a system of economic relations that will give us guarantees so we can plan our economies and develop our countries.
Also, it's just good business. The inability of ((Latin American)) countries to pay their debt has created another problem that is even more damaging than the debt burden itself: an inability to import. Yet our countries are a market . that is indispensable to the growth of the industrialized nations. So resolving the problem of debt means opening markets to the industrialized countries.
In the 1970s Latin America imported from the U.S. significant amounts of goods. In the 1980s that flow dropped as much as 80% in some areas, such as automobiles and tractors. The decrease was a fundamental cause of the great fiscal deficit of the U.S. The recovery of Latin America's economy should have the same significance for the U.S. as Europe's recovery had during the Marshall Plan.
Q. What must the Latin American debtor nations themselves do as part of this process?