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DE RUEHSJ #0277/01 0432157
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P 122157Z FEB 07
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 7224
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY
RUEHMD/AMEMBASSY MADRID PRIORITY 0593

UNCLAS SECTION 01 OF 02 SAN JOSE 000277 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
DEPT FOR WHA/CEN JASON MACK 
 
E.O. 12958: N/A 
TAGS: PREL PGOV KDEM XM CS
SUBJECT: MONTEVIDEO CIRCLE MEETS IN COSTA RICA 
¶1. (U) SUMMARY: Costa Rica hosted the Montevideo Circle, a 
discussion forum for current and former presidents of Latin America, 
on January 27-28, 2007.  The group's topic of discussion was: 
"Democratic Stability and Opening: Unpredictable Factors for Latin 
 
America in the 21st Century," and the participants' remarks largely 
coincided with USG objectives for the region, including Costa Rican 
ratification of DR-CAFTA. The meeting was covered extensively in all 
domestic newspapers.  This cable reports excerpts of the press 
coverage.  END SUMMARY. 
GENERAL THEMES: INVESTMENT/TRADE THE MOTORS OF DEVELOPMENT 
¶2.  (U) Former presidents Julio Mara Sanguinetti of Uruguay 
(founder of the Montevideo Circle), Ricardo Lagos of Chile, and 
Fernando Henrique Cardoso of Brazil promoted free trade and 
investment attraction as the motor of development for Latin American 
countries.  "Globalization has arrived to stay," said Lagos. 
Colombian president Alvaro Uribe, host Sscar Arias, and other 
speakers insisted that Latin America must insert itself into the 
world market.  They agreed that only through global trade will 
countries achieve real development and lessen domestic income 
inequalities. 
¶3.  (U) Former Colombian president Belisario Betancour and former 
Spanish leader Felipe Gonzlez warned of the possibility of the 
region becoming "the region of the world with the most inequality." 
Betancour stated that external debt, lack of social infrastructure 
and schools, along with hunger and misery work against progress.  He 
also stressed that "education is the key to leaving hunger behind." 
 
 
ARIAS - DEVELOPMENT MUST BE BASED ON EDUCATION 
¶4.  (U) As host, Arias stuck to familiar themes in his opening 
address.  He asked "What good is it if Latin America has regained 
democracy if it is incapable of putting food in its peoples' mouths, 
putting a roof over their childrens' heads?  What good is it if a 
peasant signs a presidential ballot if he knows nothing more than 
signing his name?  Democracy cannot live without food or a roof. 
Human development must be based on education.  One in three children 
do not go to secondary school (in Costa Rica).  Today's educational 
failure is tomorrow's economic failure."  Arias emphasized that 
hunger, ignorance, and frustration fertilize the ground for a 
resurgence of authoritarianism and that democracy should complement 
prosperity and development. Otherwise, he warned, the task of 
maintaining respect for liberties will be titanic.  Using Cuba as an 
example, Arias warned that Latin America runs a serious risk of 
returning to dictatorship. 
SANGUINETTI - INVESTMENT MEANS GROWTH AND JOBS; FREE TRADE 
AGREEMENTS (FTAs) HELP COUNTRIES MOVE FORWARD 
¶5.  (U) Sanguinetti told an interviewer, "Only investment brings 
growth and generates jobs.  We are entering a new century, but 
walking backwards with an archaic debate.  Globalization is a real, 
scientific fact." Sanguinetti insisted that economies must open, 
given the experience of Latin American countries which have opened 
their economies.  "In general, I think that economies either open or 
fall behind.  To incorporate ourselves into the global world is not 
ideology, it's a fact.  Of course, a market economy assumes more 
open competition, that's the challenge.  One has to get used to the 
vigorousness of competition." 
¶6.  (U) When asked how the Montevideo Circle views the new Latin 
American Left Sanguinetti replied, "This is a discussion group with 
free opinions. We have the common conviction about democracy and 
freedom.  In Latin America, unfortunately, we are living in a new 
stage of fragmentation after years of seeking integration.  Mercosur 
and the Andean Community are in crisis.  Perhaps the most effective 
and efficient integration process is in Central America." 
Sanguinetti stressed, "True democracy is based on dialogue and real 
consensus, with the objective to find mechanisms that solve the 
social and economic needs of each country."  He concluded, "In 
Europe the Berlin Wall fell, but not in Latin America. 
Liberalization has achieved positive but minor effects.  FTAs do not 
substitute for development strategies, but they are necessary for 
countries to enter new markets." 
LAGOS - FTAs PROTECT SMALL COUNTRIES; GROWTH AND INVESTMENT CAN HELP 
THE POOR 
 
¶7.  (U) Lagos told the media that "free trade agreements give us 
market access; they are instruments that countries must know how to 
use," he continued.  "Technological innovation and even unique 
cultural traits could be small countries' strengths. Training people 
how to confront the issue of globalization with the right skills 
seems fundamental to me.  There was a clear conviction that we were 
going to tie Chile's growth to our capacity to link to the world and 
exports were to play an important role as a measure of our growth. 
But the most important public policies are those that assure 
economic growth reaches those most in need." 
 
¶8.  (U) Lagos opined that a hemispheric debate has begun over which 
is the fastest and most efficient way to eliminate the huge gap 
between rich and poor.  "For me, the fastest way is growth and to 
grow you have to invest.  Once [an economy] has the growth, then 
public policies can be created to help those who have less."  Lagos 
described the region's lean to the left as a search for political 
solutions to resolve the inequality dilemma.  "Now we are a middle 
 
SAN JOSE 00000277  002 OF 002 
 
¶1. (U) SUMMARY: Costa Rica hosted the Montevideo Circle, a 
discussion forum for current and former presidents of Latin America, 
on January 27-28, 2007.  The group's topic of discussion was: 
"Democratic Stability and Opening: Unpredictable Factors for Latin 
America in the 21st Century," and the participants' remarks largely 
coincided with USG objectives for the region, including Costa Rican 
ratification of DR-CAFTA. The meeting was covered extensively in all 
domestic newspapers.  This cable reports excerpts of the press 
coverage.  END SUMMARY. 
GENERAL THEMES: INVESTMENT/TRADE THE MOTORS OF DEVELOPMENT 
¶2.  (U) Former presidents Julio Mara Sanguinetti of Uruguay 
(founder of the Montevideo Circle), Ricardo Lagos of Chile, and 
Fernando Henrique Cardoso of Brazil promoted free trade and 
investment attraction as the motor of development for Latin American 
countries.  "Globalization has arrived to stay," said Lagos. 
Colombian president Alvaro Uribe, host Sscar Arias, and other 
speakers insisted that Latin America must insert itself into the 
world market.  They agreed that only through global trade will 
countries achieve real development and lessen domestic income 
inequalities. 
¶3.  (U) Former Colombian president Belisario Betancour and former 
Spanish leader Felipe Gonzlez warned of the possibility of the 
region becoming "the region of the world with the most inequality." 
Betancour stated that external debt, lack of social infrastructure 
and schools, along with hunger and misery work against progress.  He 
also stressed that "education is the key to leaving hunger behind." 
 
income hemisphere, but the difference between rich and poor is as 
unjust as when we were a poor hemisphere.  This isn't Africa, but 
close." 
CARDOSO - MUST OVERCOME INEQUALITY IN EDUCATION 
¶9.  (U) The former Brazilian leader echoed Arias's comments on 
education.  "There is an immense inequality in education," he said, 
which must be reduced to "confront change."  Cardoso urged Latin 
American universities, which he described as "isolated" and far from 
businesses that generate jobs and from the governments that dictate 
policies, to better integrate themselves into this mainstream. 
COMMENT: 
¶10.  (SBU) Our MFA contacts made clear this was an initiative of 
President Arias's office, and not the Ministry.  Hosting this event 
is certainly in keeping with Arias's penchant to discuss (and to be 
seen as discussing) issues of global and regional import.  One San 
Jose-based diplomat hinted to the Ambassador that this latest 
Montevideo Circle event was intended to be not just another 
gab-fest, but as a first step to developing a thoughtful regional 
counterweight to Chavez-style populism.  Uribe's presence (and 
Arias's hosting) gave the meeting a higher and more relevant 
profile, and the participants' public remarks largely coincided with 
USG objectives for the region, including Costa Rican ratification of 
DR-CAFTA.  However, more than just a well-publicized conference will 
be needed to develop a regional antidote to Chavez, Ortega and Co. 
 
 
LANGDALE