ECLAC proposes strengthening productive and financial regional integration to consolidate a structural change with equality

Santiago, July 28, 2014.- The Deputy Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Antonio Prado, called for countries to prioritize the strengthening of the region's productive integration, during the 4th South American Economy and Finance Council (CSEF) held in Buenos Aires.

The senior United Nations official took part in the opening, along with the Argentine Minister of Economy and Finance, Axel Kicillof, and President of the Central Bank of Argentina, Juan Carlos Fábrega.

The meeting brought together ministers of finance and economy, presidents of central banks and other authorities from member countries of the Union of South American Nations (UNASUR), who discussed the region's efforts in terms of financial integration.

Antonio Prado highlighted the role of value chains in the world context, as a means of organizing international trade and production. He declared that intensifying the regional market is essential to gaining an international standing that will make it possible to consolidate a structural change with equality.

According to Mr. Prado "It is vital to begin with a modern notion of integration, based on the competitive creation of value chains". He also stated that the region's enterprises needed to have guaranteed full access to the broader market - not only through the removal of traditional trade barriers, but also through a regulatory rapprochement in the areas that have the most impact on trade and investment flows.

He affirmed "Promoting competitive regional and subregional value chains requires a free-flowing dialogue with business and labour sectors - the main actors in these chains".

According to the Deputy Executive Secretary of ECLAC, deepening regional integration requires a Financial Security Network for Development to enable countries to tackle the adverse effects of external volatility on the business cycle (as well as affecting long-term productive development and growth).

ECLAC proposes that this Network should be based on: countercyclical financial provision to fund the balance of payments; mobilization of resources for productive development and investment; and support for intraregional trade.

Antonio Prado explained "We must progress towards a regional reserve fund, which would make a significant contribution to providing the public good that is financial stability", while also underscoring the rapid-response capability of the Latin American Reserve Fund (FLAR) vis-à-vis countries' liquidity requirements.

At the meeting, the senior United Nations official referred to the United States Supreme Court decision to hear the case between Argentina and a minority of "holdouts", and stressed the need to set up an international mechanism to resolve conflicts of interest arising from sovereign defaults.