*{Geopolitics: Political Trends and Economic Orientations [http://www.weforum.org/site/knowledgenavigator.nsf/Content/Geopolitics%3A%20Political%20Trends%20and%20Economic%20Orientations?open&topic_id=300250000&theme_id=300] 07.05.2000 Mercosur Economic Summit 2000} Moderator Wolf Grabendorff, Director of Irela - Instituto de Relaciones Europeo-Latinoamericanas in Spain, conducted the session by posing three questions to the panellists: How can we describe post-economic reform in Latin America and where is it heading? Is there still a concept of reform and which countries are providing examples in the region? Do strong economic relations with the US and/or Europe have a direct impact on the pace and direction of reform in the region? Responding to the first question, all panellists agreed that implementing economic reforms in Latin America is a relatively easy process accomplished through political will and administrative backing in most countries of the region. The real issue, said Grabendorff, is whether these reforms are heading in the right direction and promoting a more equitable distribution of wealth. Edward Luttwak, Senior Fellow, Preventive Diplomacy, Center for Strategic and International Studies (CSIS), USA, pointed out that economic reforms such as privatization and deregulation have not resulted in the breaking up of local monopolies nor in freeing competition from bureaucratic restraints. Economic reforms have also not influenced political reform. "Public opinion is ahead of the political class and wants accountability from government", said Luttwak. "The public will no longer accept the gap between the advancement of the political class and the lack of democratic reforms." Félix Peña, Director, Institute for International Commerce, BankBoston Foundation, Argentina, echoed these concerns, enumerating four demands for political improvements: efficiency from public organs to deal with problems, ethical public conduct, transparency and greater representativity. "The majority of the people do not feel they are adequately represented by their elected officials", he said. Luis Rubio, President, Center of Research for Development (CIDAC), Mexico, added that Latin Americans need to create a more effective government and "expand the economic reforms so that they will benefit the people at large and not just a few". There was also consensus among the panellists concerning the second question as they noted that the neo-liberal system which has been imported from the United States to Latin America is not an ideal one and has produced inequalities in the region. "The neo-liberal model did not raise the standard of living in the United States, where there were no wage increases for 20 years, and will not raise the standard of living in Latin America either", said Luttwak. "The real question is whether Latin America can survive 20 years of declining wages", he added. Peña noted, however, that despite the drawbacks of neo-liberalism, "there is strong demand for economic stability. No one wants to go back to the past, even if the people are not happy with the reforms." Peña's concern is that "the economic system is not obtaining resources to practice solidarity and to include those excluded from the reform packages." Responding to the third question concerning the impact of the US and Europe on reform in the region, Luttwak made a case for closer ties between Mercosur and Europe, since the US model is very different from the social and cultural context of mostly-Catholic Latin America, where there are strong concerns for wealth distribution and solidarity. "The United States is a Calvinist society and an arena where individuals compete - something very different from the Latin American view of the world." Rubio noted that geography still plays a big role: "while Mexico, Central America and the Caribbean look to the United States and NAFTA as a trade model, South American countries are closer to Europe culturally and have established Mercosur along EU lines to a certain extent." àQuestions from Latin American participants reiterated the concerns for greater solidarity and wealth distribution in the region, now that there is an overall consensus that globalization and neo-liberalism are here to stay. Peña noted that the "challenge is not to open up economies but to establish real impulses for growth and distribution." A Brazilian participant pointed out that the private business sector is currently spearheading reforms and is the real "fast-track" behind political change, as businessmen push for more efficient governments and less controls. Rubio seconded this remark, noting that the private sector is becoming increasingly influential in Mexico. Cesar Alba, Spanish Ambassador to Brazil, made an appeal for greater solidarity with Latin America in order to compensate for the harsh realities of globalization where "the rich get richer and the poor get poorer". Peña challenged the Spanish ambassador to practice this solidarity by suggesting that Spain and Europe in general could make a contribution, a "solidarity tax" of a certain percentage of their trade surplus with Mercosur to help eliminate the gap between the rich and the poor in Latin America. The session ended with a warning from Grabendorff: "No economic models can be applied to Latin America, but policies which produce social exclusion create ungovernability and are breeding grounds for populist regimes. All free trade agreements will go down the drain if there is no just distribution of wealth in the region." *{Contributors: Grabendorff Wolf Luttwak Edward Peña Félix Rubio Luis}