30 January 2005

'Globalised world needs rule of law': Interview with Ricardo Lagos, President of Chile

January 30, 2005
The Hindu

Interview with Ricardo Lagos

"Globalised world needs rule of law"

The first Chilean head of state to visit India, President Ricardo
Lagos, spoke to Siddharth Varadarajan, Deputy Editor of The Hindu,
about the anti-neoliberal mood in Latin America, the trial of the
former dictator, Augusto Pinochet, and the nee d for a world that
recognises cultural diversity and the rule of law. Excerpts:

Siddharth Varadarajan: Given the enormous distance that separates
Latin America from South Asia, what is it that India and Chile can do
for each other?

Ricardo Lagos: That reminds me of my visit to China when President
Jiang Zemin told me, `You are from such a faraway country, I assume
you have something very important to tell me!' But seriously, beyond
the historical things and the multilateral issues, India is an
emerging country, extremely important as an economic force. Chile is a
small country with only 15 million people but our path of development
has been to integrate with the world. Trade accounts for more than 65
per cent of our GDP, and if we add services, that's 80 per cent. In
other words, India has a huge internal market but when you are a small
country, you see the world. And we would like to be here.

On the other hand, the fact that you too are an open economy means the
possibility of investment in and using Chile as a springboard to go to
other countries. Quite a number of European firms are now going down
to Chile, because they can go free of tariff to the U.S.; and on the
other hand, some Americans are coming to Chile because they can go to
Europe tariff free. So Chile is offering to India the market of the
Europeans, Americans, Canadians and Mexicans, with whom we have free
trade agreements and zero tariffs for most products.

At the same time, societies are more than economies. There are
cultural issues, the design of public policies to help the poor, where
we can learn from each other. I think it is time to say globalisation
is not just about business but about some other things...

Varadarajan: There has been in India recently a certain re-evaluation
of the different dimensions of globalisation, a feeling that we tended
to ignore Latin America, Africa. In the past year, we have seen the
creation of a very promising new forum linking India, Brazil, and
South Africa. Do you see that kind of initiative as something Chile
could connect with?

Lagos: I think India, Brazil, and South Africa are part of a broader
coalition - the so-called G-20 and still counting - of countries
that went together to present similar views in the Doha round of trade
talks at Cancun. Now, there are the negotiations in Geneva and I think
the time has come to present similar views. There are the questions of
anti-dumping laws, agricultural subsidies, and intellectual property
rights. It's there that we are going to be discussing these things...
So that's an area where, if globalisation is going to be here as it
is, you need some rules. Globalisation without rules means that the
rules are going to be imposed upon us. I don't want that. And from
that point of view, India, Brazil, and South Africa are the major
countries providing some leadership in this question. We feel part of
that group.

Varadarajan: I was in Venezuela recently for a conference at which
there were a lot of scholars and artistes from Latin America. I got a
feeling of a new confidence in the region linked to the fact that
after a long period, there are five or six progressive governments in
the continent - Lagos in Chile, Nestor Kirchner in Argentina, Lula in
Brazil, Chavez in Venezuela, and, of course, now Uruguay. What
accounts for this turn to the Left? Is it because of Latin America's
negative experience with neoliberalism?

Lagos: There is a sense in the region that we tried to do everything.
That during the 1990s, under the so-called Washington consensus, we
were supposed to be open to trade, we were supposed to have an
independent monetary policy, no fiscal deficit, privatise quite a
number of firms. Now, most Latin American countries did all those
things. Nevertheless, growth didn't arrive, and in those cases where
you have growth, this didn't mean poverty was being reduced. The only
exception, to some extent, has been Chile. And you know why? Because,
in addition to the Washington Consensus, we had quite a number of very
specific policies.

Varadarajan: You mean social welfare programmes?

Lagos: Yes, for the poor. In education, for example, we discriminate.
Equal opportunity in education means you have to discriminate in
favour of those schools that are far away, in rural areas, poorer
people. There's no question. We have computers now in 90 per cent of
our schools but, needless to say, for many kids the computer in the
school is the only computer. Also, one of our programmes was to target
women-headed households. Ninety-five per cent of them are poor so to
target them is very easy. So, in a housing programme, for instance,
the priority was these households. With our targeting, we have managed
to reduce those in poverty, by our own definition, from 40 per cent of
the population to 18 per cent.

So I have a feeling that what happened in the region is that there is
a move away from neoliberal thinking that growth is enough. People
discovered that growth is not enough. And that if you don't have these
kind of very concrete - I am not talking about populist policies -
straightforward public policies that are essential. This is not to say
that in some cases, you couldn't have a privatisation or a
build-operate-and-transfer scheme. We introduced, for instance,
private money in our highways. Well, I can build a highway through a
toll system but the money could be better used to build a school or
help the fishermen, bringing water for the rural poor. Almost everyone
in rural areas has drinkable water but let me tell you, this is only
public money because the peasants cannot afford that part of the

Varadarajan: Given the ideological affinity among several of the
Governments in Latin America, is it possible to have a certain
coordination of policies? Mr. Chavez and Mr. Kirchner are talking of
building Petrosur to link South America's oil companies. How does
Chile view these kind of pan-Continental institutions?

Lagos: I think that geography will tell you need some kind of physical
integration in terms of highways, roads, and telecommunications.
Needless to say we have a tremendous reservoir of hydroelectric energy
in the southern part of Chile. If some other country has gas or oil,
and it is possible to have pipelines and trans-electric cables, that
is possible. Already, we receive a little gas from Argentina and
provide electricity.

These kinds of things are essential. But it is also necessary to have
some kind of coordination in terms of our own economic policies.
Because what is the purpose of integration and reducing barriers if
you are going to devalue your currency by 50 per cent! So I think we
need physical integration like energy, transportation etc., and
integration of macroeconomic policies.

Varadarajan: How are Chile's relations with the U.S.? As a member of
the U.N. Security Council in the run-up to the invasion of Iraq, Chile
surprised many by refusing to go along with America's plans to get the
U.N. to sanction the war...

Lagos: You see, everybody assumed we were going to say yes because we
were in the middle of trade negotiations with the U.S.

Varadarajan: Exactly, so did Chile incur a penalty for its opposition
to the war?

Lagos: I would say no, but our opposition to the war has to do with
something much more essential. It is not only a question of ethics,
but in this kind of world that is global, you are going to need some
kind of rule of law. It is impossible not to have that. And the only
way is by the United Nations and the multilateral institutions.

This is the reason that nine months after the non-resolution on Iraq,
when there was a resolution on Haiti, 72 hours after the resolution
asking for troops, we sent troops there. So, without the Security
Council, we say no, and within a unanimous vote of the council, we say
yes. This is the only way for small countries if we are going to be
living in a more civilised world.

Varadarajan: The U.N.'s high level panel has made recommendations
about reform, including the Security Council. There's been some
disappointment largely because they have felt the veto system cannot
be changed. India feels the expansion of permanent membership should
come with veto power but Latin American countries have tended to
favour doing away with vetoes altogether. How does Chile view the
question of reform?

Lagos: The time has come to update the U.N. Charter. It represents the
world as it was in 1945. I think it is necessary to have more
permanent members. There are two proposals and we will be with
whichever receives more backing.

I think it's improbable that countries with a veto will not veto the
proposal to abrogate the veto! In that case, why not have a system of
contra veto? One country says `I veto', and two others say, `I veto
your veto'. That could be a practical solution, but we are open to any
suggestions. What I wouldn't like is that because of the question of
the veto, we don't introduce reforms that are essential, not just in
the U.N. but also in economic institutions like the World Bank and

Varadarajan: There's a perception that Chile prefers to remain aloof
from regional integration in South America and reach its own
understanding with the U.S. on trade. In the context of the ongoing
debate, don't you think it prudent to postpone discussion on the
Washington-proposed Free Trade Area of the Americas (FTAA) till such a
time you have greater coherence of policies among South American
countries first?

Lagos: Every country has different realities. As I said, 65 per cent
of our GDP is represented by exports and imports. Do you know how much
it is in Brazil? 22-23 per cent. Argentina has something similar.
Because these countries are so huge, the internal market is very
important for development. The way you address the issue of trade is
different when you have such a huge market.

Varadarajan: So Chile does not want to become a full member of

Lagos: I'm in favour of Latin American integration. And I think this
is essential. But how are we going to integrate if you have 14 per
cent tariff and I have 6 per cent? Should I increase my tariff? That's
impossible. Should they reduce? In the long term, they are planning
that. So the question of integration has to do with what is the
reality in the different countries. Why don't we have integration in
the political arena? The Ministers of Health and Education meet twice
a year among Mercosur countries. I say if a customs union is essential
to be a member of Mercosur, then I cannot be a member. I'm only an
associate member. But if there are many other things and not only a
customs union, I will be a full member. So it is not that Chile would
like to go alone.

The decision to start negotiations with the EU was taken together by
Chile and Mercosur. The idea was to start at the same time and have
parallel negotiations, but in the end it was extremely difficult for
the Mercosur countries to agree among themselves. So we have ended up
doing the negotiation with Europe alone while the others are still
discussing. Now, there has been a decision to have discussions on a
trade agreement between Mercosur and India. Chile also now has an
agreement. I hope in this case we will be together.

Varadarajan: Turning to a domestic issue, how important for Chile is
it that Pinochet be prosecuted for the human rights violations and
other crimes committed during his dictatorship? Are you confident the
process can be followed through without negative consequences from the

Lagos: There will be no negative consequences no matter what happens
on this issue. The question of the armed forces is settled in Chile.
There is a tribunal and there are several prosecutions. Our democratic
institutions are now very strong.

Varadarajan: But how far down should legal accountability be fixed,
given that there are a large number of people who received an amnesty

Lagos: Your question is quite relevant because quite a few members of
the military are saying, `Look, I was obeying orders, so my
accountability is not as big as you think it is'. This question has
not been settled. Today, more than 60 former officers are in prison
and the number being prosecuted is much larger.

Varadarajan: I happened to be in the memorial cemetery in Santiago in
1995 when the body of one of the hundreds of young men who had
disappeared during the Pinochet years was being buried. It was a very
moving ceremony but at the time, none of his relatives or friends
really believed there would be justice. Chile does seem to have come a
long way in the past 10 years.

Lagos: I would say there are very few countries that have been able to
see what happened in the past... In November 2004, a presidential
report was issued - the result of a high-level committee's

investigation into what happened with the political prisoners, the
torture. It's had a tremendous impact on public opinion, first because
the report was released, and second that the Chilean Government will
be paying pension for life for all the 28,000 people who were
recognised as political prisoners in that report. This tells us about
the strength of political institutions in the new Chile.

Varadarajan: Is there any possibility that the drive to have full
accountability for 1973 might at some stage lead to a request from
Chile for the right to interview or interrogate officials from the
U.S. who have information on the coup, torture techniques,
disappearances. One sometimes hears calls for Henry Kissinger's

Lagos: Well there has been some talk of that but all this is up to the
tribunal. If they, if someone being prosecuted says `I received orders
or training or whatever it is, then it would be up to the tribunal to
make a decision to ask for some foreign people to appear.

© Copyright 2000 - 2005 The Hindu

No comments: