Inversión Y Desarrollo Con Luis Velásquez 226 1/1 Jorge Quiroga Expresidente De Bolivia

Welcome to Investment and Development. We are in the frame of the Regional Forum of Esquipulas: "Think Central America in a New Era" with special guests and in this opportunity with Mr. Former President of Bolivia Jorge Quiroga, who has a lot of experience because he was also Vice President, Minister of Finance and because of this he has an extensive knowledge in the business and professional industry. Welcome to Guatemala. Thank you very much to you both, I am glad to be here. Thank you very much Mr. President for accepting the invitation. Which were the main achievements of the administration of your government to insert Bolivia in The Era of the 21st Century? Seems that it was many years ago, in the Pre-China periods. Today in South America we have a favorable economic situation, because what makes us different from you in Central America, is that in South America we all export energy, food and minerals, which has made us suppliers of China and that great economic growth. We export today 4 or 5 times more than other countries, than a decade ago by prices, some by increased production, but prices generally. The turn of the century was not as benevolent as what I'm describing, it was a time of crisis, they are celebrating 15 years of the Thai devaluation, the people will say: What does that had to do? As you remember: The Thai currency collapsed, spread Indonesia, Malaysia, South Korea. Asian crisis came, we all in Latin America got colds, economies began to collapse. There was a time of disastrous collapses, the Argentina impulse, Uruguayan, Venezuelan SEPAL, the United Nations economic body, called the time from 1,998 to 2,003 " The Middle Lost Decade ", they also described it, some suffer it, because it was the time of the Asian crisis, that was very hard and China was not that buyer, that is today and the U.S.A. economy was not in such a favorable position until the year 2,004 and 2,008. Were considered very hard times economically. Remember Argentina came out of its exchange rate, a terrible inclusion, A Playpen. Brazil had to devalue, very hard times economically, we had to ensure stability, globalization and safeguard financial issues. A big challenge for my small country, I do not know if you are eligible to the condonation of the foreign debt, which is something multilateral. In countries like ours, we owe to the private baking, in Bolivia we condone that, when I was the Minister of Finance to the countries, to bilateral space, we also condone that and the sacred and the untouchable was supposed to be the multilateral, the World Bank, Vid, Organizations in Bolivia we did a global forgiveness of all the multilateral debt, the first country in Latin America with the next condition: Stop paying in dollars or euros that were going to Washington or Europe and we left them in Bolivia to combat poverty in rural municipalities, that is where the poorest people is, who most need to strengthen institutions, also it was a challenge, independent institutions, Central Bank, tax collections, customs, that before were political spoil and also a fierce struggle against drug trafficking. In Bolivia this is an unfamiliar fact, it is the only country that reduced an 80% the *** production , heroine or any other drug in a lapse of 5 years and we did it in that time. My country produced each year near the 80’s and 90's around 250 tons of ***, we reduced it to a 45%. An effort of the entire country, they opened to us the textile market in the United States, they were part of an effort that was being done, but it was an environment of economic change, of Asian crisis, we had to fight against the instability, drug trafficking, throw all the resources against poverty and attract investment in the mining, that was what we did so that when the wind became favorable, for my country to export about what we do today, which is 9 times more than we exported 10 years ago, thanks to the Chinese prices. I will give you an example: The gas 10 years ago was worth US$ 1.30, now its cost is around US$11.00, the tin now costs 5 times more. The same with the lead, silver, zinc, also soy. Then to guarantee stability, attract investment, fight against the drug trafficking, go through a complex joint and be placed to take advantage of the Chinese fair weather. How interesting to hear when you started: "In South America we all export energy, minerals and food ", we agree in that scheme because also Central America has great potentials, in these sectors: Energetic, wind power, geothermal, hydroelectric plants, in the mining sector we have great potentials and of course also in the foods sector, we could produce all the food and could export it to different latitudes. But I want to point out one important issue, because you achieved all this results that you have been talking about and in the case of Guatemala and other Central American Countries also, we have a Mayan population in a very significant percentage. How have you been able to work with the Indigenous communities? To make the most of that entrepreneur spirit that the indigenous have and take advantage of the Mineral Resources, Hydro Resources to produce more and to achieve Economic and Social Development. Several things happened in that front. The first one is that we have a great amount of gas, you will find very few countries, none in Latin America, opening a valve to export almost 20% of the GDP. Opening a valve, without even lifting a cup of coffee. The gas that goes to Brazil and Argentina, that is the product of a work of decades, the key of that is that the resources that are attracted are designated in a decentralized way to municipalities, regional governments, meaning the local space, regional, universities and also bonuses are being paid, for example: The mothers of the families have a guarantee that the children in rural areas and indigenous towns can go to school, can have freedom, can have education and they see the direct transference of the resources. Are programs that began in Brazil, Colombia and Mexico. As long as we have money to pay, because the gas has allowed us to pay bonuses for the children to go to school, for the pregnant mothers to have a good labor and get support. For all the retired people to get good pensions and that has allowed minimizing poverty and to channel the resources into the rural area, including that program that I mentioned, the debt that the country had that was forgiven in return. Not for us to forget to pay, but that the internal debt not the external channeling the resources to the rural areas for them to have more development. An intensive program of educational reform, fostering and promoting a bilingual education. We went from not having bilingual teachers to 6 thousand of bilingual teachers, for the child that speaks, Keisha, Wama or Guarani, to start going to school, and do not happen that if the child does not understand Spanish left school to clean shoes. The key is to get his attention, teaching in its language, getting him to the Spanish and the bilingual education with native language that is the focus of this educative reform. President in all Latin America we have that challenge, of taking the people in the rural areas to the cities but you changed that paradigm and decentralized it. How did you make that policy? First and second you fomented the Rural Economic Development. How can we apply this for the different countries in Latin America, Central America and specially in Guatemala? There is a rule that applies in the international level and at an internal level of the countries: "If the resources do not persecute the poor people, the poor people will seek the resources ". If one lives in Guatemala, in Nicaragua and in Honduras and doesn’t have a job one migrates to Arlington, Virginia, California or Texas. In the Bolivian case they go to Argentina or Spain. Well Spain now it is difficult to go there, the same with the intern countries, "If the resources doesn’t pursue to the poor, the poor have to seek for resources". How? Going to the Peruvian regions, making poverty belts in urban spaces, if the allocation of the resources is not decentralized. We have had a rural urban migration, we have seen it in Bolivia too, but since more than 15 years there is a system: First the distribution of Tax Revenues to municipalities, not on where the legal entity taxed, not based on if the company is in Guatemala, but based on the population. This means: "The resources pursue the people ", the resources of the remission of the debt that was done in the same way with an added value, was given in terms of the population qualified for poverty indicators. If you had people up to 3 times poorer than other places, with the same amount of people, 3 times more money was given to the rural municipality that had more poverty. Something important that we did in the country a long time ago, we didn’t wait that the poor people came to the urban zones or that they went to Spain to pursue an income, a salary, but to channel the resources so the resources can get there where the necessities are. There is the importance of the Local Economic Development, involving the Governors, the Mayors, the District Congressmen and of course to Community Leaders. We are going to a commercial brake and then we will continue with Investment and Development with the interview to Mr. President of Bolivia Jorge Quiroa. We continue with Investment and Development and the interview with the President of Bolivia Jorge Quiroga. Mr. President, How can we involve the Community Leaders to bring productive projects, to get them out of subsistence, The central part of this is to open doors to civil society participation. far distances and is not in contact with the population. I will give you an example of what happened to us in Bolivia: There was an oil spill in a rural area of the Bolivian highlands, there was an environmental fine for the damage and the spills, the company had to pay a great amount of resources and started the dispute that always has been done, Who gets the money? obviously the regional government wanted it, the mayor wanted it, council members wanted it and people in the community said "These government agencies give the resources to the community " and recognize the community as an organized civil society, as a subject of public fact that can receive transfer of resources, helps tremendously and is applied The establishment of public communities that could receive funds Development and Personal Development and not to mention if we want highly competitive companies, going through, the Integral Development. Your country has the 96% of literate population it is said to be the country in all the American Continent that has less illiterate people. What has been the policy, that has given results and mainly for having a majority of population of indigenous people? What have you done to reach those results? There are a number of elements, 1°: The elementary bilingual education, because the biggest disappointment is that the boy or the girl in rural areas, doesn’t understand Spanish, at the third day the kid is frustrated and ends washing clothes or shining shoes or working the land instead of being educated and the biggest difference in possibilities for progress and welfare comes if he has or not education. The issue of the bilingual education is one case. 2°: Surely if you check you will be aware of one thing it really is a crime worse than a crime and is not complying the 200 days of school in public education. In the private education they comply, in public education they don't because of the strike, after strike and the conflict in ministries and teaching authorities the children and the parents end up paying the bill, there are countries in Latin America where there are only 120, 130, 140 days of school instead of 200. What does this mean? That a child instead of being in third grade must be in second grade, to a child that is in sixth grade, must be in fourth grade. It is being removed the future, as well as they must meet the 200 days of class. Education must be reinforced and incentive programs must be guaranteed in rural areas, bilingual teachers, having always that motivation to work the same in the capital, and in the rural zone, that kind of incentives, payment and compensations to allow education to get to the rural zone and finally that system that has been used in Brazil, Colombia or Mexico. As "the Family Bag" of transferring the resources directly to the mother, that is more responsible than the father. Sometimes the father likes to go for drinks. To the mother according in if the son is taking his first year, second year, third year and with a notebook, channeling resources directly to the mother, that the mother doesn’t have to choose between making her daughter or her son go to work to bring home some resources instead of going to school. Important the impact that creates education and the quality that they receive at the end. For example Guatemala has many similarities with Bolivia in the issue of resources, you mentioned the gas, the mining, the water resources, to make the most of all this resources and generate Economic Development, to create investment attraction and above of all the Community Development. We in the gas issue, we had the great advantage of having a giant as Brazil, our border all along is with Brazil. It was made an endeavor with President Cardoso of making or argue it, the North American are very good friends to do creative things, of initiative, they have created seismic systems and geology of transversal drilling, plus hydraulic fracturing of rocks, which has allowed the combination of these elements, discovering great amounts of natural gas in the United States. What does this mean in the United States? Today one can illuminate this room with natural gas, with the 5th part of what it would cost to generate the electric lightning, based on diesel, it means, the 5th part of the cost and less carbon emissions to preserve the environment. supply that generates half the carbon emissions", 2/3 the entire geopolitical equation, energetic, regional, of economic industrialization and it is a huge competitive advantage they have in the United States. Today natural gas gives you the 5th. part of the energy than liquids, United States will start exporting and Trinidad and Tobago which supplies with extremely competitive prices, so that the gas from Trinidad and Tobago Because it will increase the price of the taxi, it will increase the cost of the bus, because it will increase the cost of the public transport. If you have cheaper energy, then the consumer pays less, public transport, reliable, cheaper that allows to compete with the Chinese, that the Central American maquilas can compete with the Chinese, because the advantage of the cheaper energetic cost that can have United States and Central America, in the next years is something that as Central Americans I would take advantage of to relocate all that is industrialization, manufacturing competitiveness and the progress and development that generates many jobs for the region. our water resources, of which we have enough to lower the energy costs we are in a process of Free Trade Agreement. with the President of Bolivia Jorge Quiroga. Jorge Quiroga of Bolivia. our geographical region requires much that boost to the micro, small and medium enterprises apply it in Central America and push forward the development of micro, small and medium enterprises, In Bolivia we achieved a lot in the issue of the micro credits, first we started in the decade of the 90´s with nonprofit organizations and international cooperation that captured a lot of resources, that were destined to reinforce these organizations. I remember one of the first operations that I did two decades ago, as a young Vice Minister, I was channeling the help of USAID and the VID to these organizations to make Microcredit, where we have a sense of solidarity and joint efforts in our countries that maybe does not exist in other States or in Europe where they say: This is me, my house, my family, this is yours and you are over there. Well we have a sense of community, where we are all together and the cross-guarantee system, allowed to create these concepts a great amount of remittances that capture what is exported. The Guatemalan citizens that have gone to the United States and send remittances and as submitted by Western Unión or any other system it costs an eye of the face and the other to send it. The world of today will make congruence of the debit cards incrusted in the cell phones because of the necessity of micro credits, what we need to work and develop is with the companies that work with cell phones. How much money they are sending and capitalize the remittances, so that the remittances don't fall once a month, but for this to be a permanent flow of resources. Because if someone sends resources, sends it each month and to be able to use it as a mechanism guaranteeing home loans, small business development, production projects in different regions and how to make remittances be channeled, so instead of being a leaking money, become a capital that allows development, matching cell technologies, debit cards and the huge Incredible the impact that is reached by combining the technology and economics more microclimates than municipalities. You with key policies medium and long term developed the agriculture. What must we do to follow this development model? I think it's clear that the State has a key role with the soybean, for example it was part of a public project that was called: "Low Evidence of the east " An operation of credits with the World Bank it was given irrigation systems, product strengthening, seeds technology, they brought people from Brazil, they brought better technology and now Bolivia is self sufficient practically in food, but lately it has fallen, but we are good exporters of soy, as it is today Paraguay, the neighborhood in general is doing well. I think Guatemala, unlike smaller countries has as you have shown, a greater potential than others in energy, hydropower, so that you can bring other sources or in agriculture for what you can do, channelizing these resources. There is where the natural gas is playing an important role. What happens? Often hydroelectric sources, which can make electricity generation to illuminate the houses in urban areas or can be irrigated, depends on the way one is channeling them. What do they do in California? They generate energy using other sources and using water to irrigate, to have those beautiful vineyards. So to say, having natural gas releases water potential of the country, to use it not only for electric generation, but also to potentiate the irrigation part and the agriculture potential that one has and it is essential to generate jobs and opportunities. Because I assure you that if you don’t do it, there are 3 ways in which the young people looks for employment and when they don't find it, they generate an illegitimate economy, informality, crime or mobility. Informality in energy submerged, criminality joining a gang. Drug trafficking or mobility, going to the United States and therefore it is essential you are a Systems Engineer, you have a career in public administration, not all the people achieve to have this important career as a very responsible Latin American citizen. What is that final message of hope that you can give to us to this Central America that we are projecting again in this Era and that wants to find that Economic, Social and Human Development Path? There is a lot to put on the table, but I want to focus in one issue that is the one that concerns me the most, that is the fight against the organized crime and the drug trafficking, that when they talk they could take Mexico and I want to tell you this is false, the drug trafficking of Mexico, a big country with institutions that are far from perfect, but finally they have them. They never could take over Mexico, Brazil, or Colombia but they could take over Guatemala or Bolivia or Honduras. Smaller countries more helpless, with weaker institutions against the business of the Mexican cartels, or FARCS in Colombia or Brazil Pieces Seitler Melons. We are very vulnerable countries against and this distresses me so deeply and I am never tire of emphasizing that it is required a strategy and a joint proposal, but with feet on earth. In the sense that they can be discussed many types of proposals on the matter, but I think the first thing We want to make legal, that discussion is long but legalize what, what phase? I quoted all legalizers from Barkley, to Newton, Freemann, little bit of drug and there are severe penalties and in the United States in the Latin American trade it will never be ***. Then we must know that we have to change strategies, as how to control guns, maybe there will be a decriminalization of marihuana, a concrete proposal that is what we are talking about. The marihuana is one thing, but *** is another very different. Security Strategies, How do we capture countries funding But how can we help countries? Financing education, health, roads make a fight against drug trafficking and a joint strategy. this Esquipulas forum that has 25 years, "the Silver Anniversary" coincides deservedly to President Arias, a Nobel Prize, unfortunately there is no silver in this deservedly to our host President Vinicio Cerezo, whom I thank in this home, for being in Investment and Development experiences that definitely leave us lessons for the development that we all desire See you next week in an interesting program as the one of today.