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1 Jan 2004 the business climate for microenterprise development and provide assistance to participate in higher profit international market chains.


    GRIC inf 13/04

    October 18, 2004

    Original : English







    Executive Summary

    Leaders at the 2001 Third Summit of the Americas and the 2004 Special Summit of the Americas committed to promoting growth with equity and poverty reduction across our hemisphere. The United States is dedicated to fulfilling this shared commitment. The following report provides highlights of U.S. Government efforts to implement the Summit agenda, including:

    ; The U.S. Government remains committed to a high-quality Free Trade Area of the Americas,

    and has agreed to establishing programs for cooperation, and supporting a range of assistance

    programs to help all countries benefit from trade. The U.S. has also concluded free trade

    discussions with many other countries in the region.

    ; The U.S. Government has supported research and a number of programs on lowering the cost

    of remittances and activities on using new technologies in order to do so throughout the

    Western Hemisphere.

    ; The U.S. Government supports the Inter-American Development Bank in its strategy to

    advance Small and Medium-Sized Enterprise funding and facilitate SME access to Credit.

    ; The U.S. Government organized the Inter-American Alliance for Accountability on Property

    Rights to bring together technical experts, academics, and implementing agencies to build

    momentum for change in strengthening property rights. The United States continues to give

    technical assistance toward implementing the Summit property rights mandates throughout

    the region.

    ; With its steering Committee partners, the U.S. helped create the SME Congress of the

    Americas, which promotes the participation of small businesses in international trade.

    ; Through the Inter-American E-Business Fellowship Program announced by President Bush

    at the 2001 Summit, U.S. companies have contributed over 7,000 hours of training to Fellows

    from the region over the last three years. The U.S. Government plans to fund as many as 20

    new Fellows over the coming year.

    ; To support microenterprise development, the U.S. Government supports activities that

    improve the business climate and provide assistance for microenterprise to participate in the

    global market, with an emphasis that microenterprises benefit from expanding free trade.

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    ; For the shared commitment related to providing social safety nets, the U.S. Government,

    along with Florida International University, hosted a workshop on Unemployment Insurance

    Systems in the Americas.”

    ; In promoting the economic contributions of women, the U.S. Government will participate in

    an examination of the gender perspective of labor policies in order to increase the integration

    of women into labor markets.

    ; As part of the U.S. commitment to support development finance, the U.S. Government has

    established the Millennium Challenge Account to provide development assistance to those

    countries in the region that rule justly, invest in their people and encourage economic

    freedom. Bolivia, Honduras and Nicaragua are among 16 countries eligible to tap the first

    $1 billion in MCA funding. In addition, the U.S. Government provided over $1.5 billion in

    bilateral assistance in the region in fiscal year 2004.

    Through these and other initiatives, the United States is working with our partners in the hemisphere to realize our common goal of prosperity and opportunity for all.


    Broad-based economic growth and poverty reduction remain key challenges for our hemisphere. To meet these challenges, all governments must to take steps to implement sound macroeconomic policies, strengthen the foundations for growth, spur private sector-led development, and work towards the eradication of poverty. International cooperation plays an important supporting role in these efforts, and the U.S. government is committed to fostering both national responsibility and international cooperation through the Summit process. Our focus is on working with hemispheric partners to share best practices, advance free trade, offer technical assistance, and support development financing. The following report highlights the challenges in Summit implementation, U.S. government progress in meeting our commitments, as well as the steps ahead.

    Challenges and Obstacles

    Governments have made substantial progress in meeting the economic mandates from previous Summits of the Americas. By agreeing to concrete, measurable commitments, our leaders have deepened hemispheric cooperation and set a higher standard for success. For many of these economic commitments, governments agreed to report on progress by the next Summit in 2005, so governments must work at implementing these commitments as soon as possible. Coordination between Foreign Affairs and Finance ministries, along with coordination between governments and multilateral development banks, is essential to fully complying with Summit mandates.

    - 3 -

    Implementation of Summit Mandates

Advancing Free Trade:

    ; The U.S. Government remains committed to completing a high-quality Free Trade Area of

    the Americas (FTAA) that benefits all countries. With U.S. leadership, trade ministers

    agreed in 2002 to establish a Hemispheric Cooperation Program to help ensure that small and

    developing countries-- such as those in the Caribbean-- benefit from free trade. The United

    States actively supports a range of trade-related assistance programs. In 2003, the U.S.

    Government contributed $150 million to Latin America and the Caribbean in trade-capacity

    building activities.

    ; Beyond the FTAA, the U.S. government is pursuing free trade on multiple fronts. The U.S.-

    Chile Free Trade Agreement entered into force on January 1, 2004, and the U.S. government

    recently concluded negotiations on the United States-Central America-Dominican Republic

    Free Trade Agreement. We are also in free trade discussions Panama, as well as with three

    Andean countriesColombia, Ecuador, and Peruwith Bolivia participating as an observer.

Lowering the Cost of Remittances:

    ; The U.S. Government organized an October 7-8 conference in Atlanta on “Payments in the

    Americas.” The conference surveyed remittance patterns across the region and discussed

    experiences with automated clearinghouse (ACH) systems. Over 130 participants attended

    the conference, including officials from multilateral development banks, the commercial

    banking community, credit unions, and wire transfer operations. Representatives from 11 W.

    Hemisphere countries were also in attendance.

    ; As part of the U.S. Government Summit Speaker Program, a U.S. Government official

    visited El Salvador, Honduras, Nicaragua, and Guatemala in September 2004 to discuss

    options for lowering remittance costs and expanding access to the financial system. ; Through programs in Mexico, Jamaica, Colombia and our regional program, the U.S.

    Government is implementing activities that focus on improving remittance receivers’ access

    to financial services and lowering costs of transmission through use of new technologies and

    formation of new business partnerships.

    ; In Haiti, El Salvador and elsewhere, the U.S. Government is working to link the efforts of

    immigrant groups in the U.S. with development projects in their home countries (education,

    health and rural enterprise development).

    ; The U.S. Government has supported research on remittance markets for Guyana and is

    preparing an issues paper on remittances for Guatemala.

    ; The U.S. Government participates in a donor task force on remittances to improve data

    collection and policy and project coordination.

Facilitating SME Access to Credit:

    ; With U.S. Government support, the Inter-American Development Bank’s MIF and IIC

    recently signed a Memorandum of Understanding (MOU) for the promotion of SME finance.

    MIF and IIC management are currently working on their coordinated strategy to advance

    SME funding in support of Summit goals. Recent transactions include:

    o Approval of a $10 million loan from the IIC to Banco BAC San José, S.A., in

    Costa Rica, to provide short-, medium-, and long-term financing mainly to small

    and medium-size enterprises in Costa Rica.

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    o Approval of a $900,000 loan from the IIC to Financiera Nicaragüense de

    Desarrollo S.A. (FINDESA) to finance Nicaraguan micro-, small and midsize

    enterprises in need of funding for working capital or purchases of equipment,

    machinery, or other fixed assets.

    o Approval of $7.5 million in renewable credit lines and $700,000 in technical

    cooperation resources to help four microfinance institutions in Bolivia, Ecuador,

    El Salvador and Nicaragua expand financing for small businesses and offer less

    expensive remittances services. The IIC expects to provide $7.5 million in

    additional lines of credit to the four participating institutions.

    o Approval of loans up to $40 million from the IIC to Banco ABN AMRO Real S.A.

    to support the medium and long-term financing of small and medium-size

    enterprises in Brazil.

    Supporting the SME Congress of the Americas:

    ; The U.S. Government, along with its Steering Committee partners, spearheaded the creation of an SME Congress of the Americas. The SME Congress is a hemispheric network of public and private sector SME service providers that promotes the participation of small business in international trade. The first full SME Congress occurred October 5-6 in Reñaca, Chile. Nearly 100 participants from 12 countries were in attendance.

    o At the SME Congress, U.S. National Summit Coordinator Amb. John Maisto and

    representatives from Chile and Argentina discussed the importance of SMEs in

    the Summit process. A U.S. government-sponsored session focused on

    opportunities for fulfilling the Special Summit commitment to lower the time and

    cost of starting a business.

    o Other panels at the SME Congress discussed SME success stories and the roles of

    governments and non-governmental organizations in SME trade promotion.

    Launching the Inter-American E-Business Fellowship Program:

    ; At the Quebec City Summit, President Bush announced the Inter-American E-Business Fellowship Program. The program gives professionals from across the Americas the opportunity to learn about information technology by spending time with U.S. companies. In the last three years, U.S. host companies contributed over 7,000 hours of training.

    Strengthening Property Rights:

    ; In response to Special Summit commitments, the U.S. Government has organized an Inter-American Alliance for Accountability on Property Rights. The first meeting of this alliance occurred on July 22 in Washington, DC. The Alliance brings together technical experts, academics, and implementing agencies from over 10 countries to focus on benchmarks for success and build momentum for change. The first meeting of the Alliance led to a draft blueprint for monitoring the reform process and 6 activity profiles, proposing action in priority countries were produced.

    ; The U.S. Government continues to implement the Inter-Summit Property Systems Initiative (IPSI):

    o U.S. technical assistance to Colombia has led to new projects to improve property

    taxation, provide land titles and cadastre in pilot municipalities and improve land

    markets participation by the poor.

    o Strategy and project design work is underway in Paraguay, Mexico and Nicaragua.

    - 5 -

    o Prior IPSI support for policy dialogue lead to significant new legislation in

    Honduras and legislative and institutional reform plans in Nicaragua.

    o With IPSI assistance, the Central American Network on Training in Land

    Administration held five problem-solving workshops for member countries and

    introduced a distance-learning course.

Supporting Microenterprise Development:

    ; The U.S. Government supports activities to strengthen microfinance institutions, improve the

    business climate for microenterprise development and provide assistance to participate in

    higher profit international market chains. For example, Aid-to-Artisans, a U.S. Government-

    supported non-profit organization, is helping microenterprises in Haiti and Guatemala sell to

    U.S. buyers.

    ; The U.S. Government is supporting new alliances between microfinance institutions and U.S.

    financial service providers to both improve micro-lending services and to introduce new

    products related to migrant remittances.

    ; Through the Department of Labor, the U.S. government is working with Argentina's Ministry

    of Labor to develop an activity related to the promotion of microenterprise registration.

Providing Social Safety Nets:

    ; The U.S. Government, in cooperation with Florida International University, hosted a

    technical workshop on “Unemployment Insurance Systems in the Americas,” where

    governments from throughout the hemisphere examined features of selected unemployment

    insurance systems (UI) in the Americas, and the potential role of unemployment insurance in

    promoting a more adaptable labor market.

Supporting Development Financing:

    ; The U.S Government has established the Millennium Challenge Account (MCA) to provide

    development assistance to those countries that rule justly, invest in their people, and

    encourage economic freedom. The Millennium Challenge Corporation, which administers

    the MCA program, has received $1 billion in initial funding for 2004. President Bush has

    pledged to increase funding for the MCA to $5 billion a year starting in 2006, roughly a 50%

    increase over then-current U.S. core development assistance.

    ; In May 2004, the Millennium Challenge Corporation selected the 16 countries eligible for

    MCA assistance in FY04. Three of the eligible countries are in the W. Hemisphere: Bolivia,

    Honduras, and Nicaragua.

    ; The United States continues to support the development efforts of governments throughout

    the region. In FY 2004 the U.S. Government provided over $1.5 billion in bilateral

    assistance to Latin America and the Caribbean, and the President has requested

    approximately the same amount of assistance for the region in FY 2005.

    - 6 -

    Next Steps

    SME Development: The U.S. Government is sponsoring trips by technical experts to discuss SME development in the region. Dr. Sharon Freeman, President of Lark-Horton Global Consulting Ltd. will discuss SME export opportunities in Uruguay in Brazil in late-October 2004. Dr. Roger Leeds, from Johns Hopkins University, will join Dr. Freeman in Brazil to address financing and regulatory challenges for SMEs. The U.S. Government will also host an

    upcoming best practices workshop on the process of streamlining business registration.

Inter-American E-Business Fellowship Program: The U.S. Government will continue to

    support the sharing of e-business best practices between U.S. and Latin American companies through the Inter-American E-Business Fellowship Program. For 2005, the U.S. Government plans to invite approximately 15-20 fellows from the region to learn how U.S companies use technology to enhance their productivity.

    Property Registration: The U.S. Government will work to deepen cooperation through the Inter-American Alliance on Accountability on Property Rights. Within this framework, outreach events are being planned for Trinidad and Tobago (Nov. 2004), Ecuador, Paraguay and Honduras. Working with its partners in the Alliance, the U.S. government will test a draft blueprint for monitoring progress in Bolivia and work with the IFC “Doing Business” project to obtain indicator data available already and to include relevant questions in future surveys. The LandNetAmericas web page will develop a special section for Alliance information and an interactive version of the blueprint. The U.S. Government is also planning a roundtable on indigenous land tenure.

Microenterprise Development: The U.S. Government will continue to provide support for

    microfinance and microenterprise development. Our emphasis is on ensuring that microenterprises benefit from expanding free trade and improved investment climates.

Promoting the Economic Contribution of Women: Working through the Ministries of Labor

    starting in April 2005, the U.S. Government will participate in an examination of the gender perspective of labor policies. The aim of this examination is to increase the integration of women into labor markets and incorporating recommendations to Labor Ministers from the OAS Inter-American Commission on Women (CIM).

    Creating Jobs: A central element of creating growth with equity, job creation is also the theme chosen by Argentina for the Fourth Summit of the Americas to be held in that country in 2005. The U.S. Government, in coordination with the Government of Argentina, is hosting an expert seminar in October 2004 on job creation in the hemisphere, with the goal of informing discussions among governments on the subject and, in particular, of highlighting policies and best practices that can help foster more and better jobs for people throughout the region.

    October 2004

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