It is in the most sincere spirit of the solidarity that should reign among all Member States of our Organization that I wish to reiterate the heartfelt condolences of Panama, in which I am certain we all share, on the tragedy which has recently stricken the noble brother people of Mexico and to reaffirm our readiness to help alleviate its sorrow and assist in its reconstruction at this time of such serious economic difficulties for Mexico caused by its foreign debt. I wish to express our satisfaction at the adoption by the General Assembly the day before yesterday of a resolution in support of Mexico.
Please accept our congratulations, Mr. President, on the wise choice which the General Assembly has made in selecting you to lead it on the occasion of this historic anniversary.
Panama's commitment to the Charter of the United Nations and our national interest in abiding strictly by it are an expression of the heartfelt desire of the Panamanian people to make of this planet a place where harmonious co existence, justice and peace prevail.
The celebration of the fortieth anniversary of the United Nations is unquestionable evidence of its vitality, of the need for it and of its role. Its preventive and moderating action has prevented or contained actions detrimental to the very existence of the human race which might otherwise have proved incontrollable. However, despite four decades of vigilant efforts and tangible achievements and only 15 years from the 21st century, peace, justice and respect for the integrity of States and for human dignity are being breached or seriously endangered,
My country believes that detente and peace should reign everywhere.
In analyzing the international situation we must give a very special place to Latin America, a continent which faces an enormous challenge.
For more than three decades now Latin America has been experiencing a high population growth whose pressure on our socio-economic and political systems we were largely able to bear because it was offset by an economic take-off which incorporated considerable sectors of the people in development. Latin America presented itself as a continent with a future.
However, from the mid-1970s, Latin America began to suffer under the pendulum effects of the world economy, the drastic increase in inflation and oil prices, negative fluctuations in international trade and in the prices of our raw materials and also in interest rates. At the same time, while we lost foreign exchange through adverse terms of trade, which tended to stifle growth, there was an increase in the massive availability of international capital, opening up to our countries the road to indebtedness, which we embarked upon in the hope of recovering our rate of economic and social development after the recession of 1974 to 1976.
The results, however, were not those expected. Latin America's debt -necessary to a certain extent as a supplement to our own swings - grew at an average of 19 per cent a year between 1974 and 1981, until today it has reached the enormous level of approximately $370 billion, dangerously exceeding reasonable limits. The financing period, which averaged eight to 10 years, was extremely short, since those funds were being invested basically in long-term economic and social projects, which were slow to recover. The disequilibrium in the terms o£ trade was sharply accentuated between 1979 and 1982. The price of imports from industrialized countries - oil for the second time - and interest rates rapidly increased, while the prices of Latin American products in international markets went down. For Central America and Panama the terms of trade worsened by 25 per cent between 1979 and 1982. More than $80 billion of Latin American's external debt, 25 per cent of the total, was due to appropriate compensation for these factors.
The most significant problem of adjustment lay in the difference in the expectations of the economic policy. The developed countries decided to reduce inflation at a time when Latin America was applying an economic policy which required the persistence of world-wide inflation. In the end, cheap money became more expensive and the extent of the present crisis became clear.
This crisis in Latin America occurs in a context which makes it even more serious. At present population growth continues to be high, with an annual average rate of growth of 2.4 per cent in our countries. Half the population is under 20 years of age and it has important social needs in health, nutrition and education. The labor market is invaded every year by millions of new workers seeking jobs. Because of the rural to urban migration the population of the 80 principal Latin American cities has doubled in the past 20 years. The same phenomenon is expecting in the coming decades, thus creating extraordinary economic, social and political pressures. Although the present population pressure has begun to subside, which is good, the important needs of the existing population will continue to be felt until the end of the century.
As a result of its own dynamics, Latin America is at a turning point in its history. Some Latin Americans have attained acceptable levels of development; others are moving in that direction amidst major difficulties; one third are still living in extreme poverty and alienation. But education, communications, and transportation systems have created expectation of a better future is possible and it is for us, the leaders, to channel that aspiration with realism, but also with faith and hope.
Large-scale efforts are necessary singly to maintain this situation; in order to improve it we require economic growth of 5 per cent a year in the region and a considerable change in Latin American economic relations.
The debt problem has exacerbated the difference between the worlds of the North and the South and has made more dangerous the gap between the poor and the rich countries. Latin America owes $370 billion and developing countries owe more than $850 billion. This makes necessary urgent changes of a financial nature which place relations between debtors and creditors on a more just and realistic level. We must recognize that the problem is not one of debt and our region only; it is a global problem because of the participants - developing countries, developed countries and international banking and financial institutions - and because it encompasses all areas of the international economy. Therefore, its solution must be global.
Recognizing this fact, in the last three years the world has implemented some solutions based on three fundamental premises: first of all, that Latin-American countries would adjust their economies to new realities and that this would lead to a period of economic stagnation; secondly, that this effort at adjustment would be supported by the banking and financial community with additional resources and through a restructuring of the external debt; lastly, that, in addition to recovering their economic growth levels for their own good and in order to provide for world-wide recovery, the industrialized countries would keep their markets open to the exports of developing countries to assist in the recovery of their economies and their debt servicing. This solution was envisaged three years ago in recognition of the global scope of the problem. The results? however, have not been enough.
Latin America has done its part, but it cannot continue to make adjustments in the midst of stagnation. We are all part of the problem and we are all part of its solution. It behooves each one of us to shoulder our share of the responsibility in order to achieve results.
A solution which is based only on economic formulations is doomed to failure, because only one that takes account of human and social factors will open up the way to a global solution. A good agreement must take into account the potential of Latin American material and human resources, but also the constraints of its limitations. The peoples of Latin America cannot be pressured to the limit of their capacity. To try to push our peoples beyond what they can endure is to threaten the very foundations of our societies. The feeling that the time has come for democracy and human rights is vibrant in Latin America and it would be shortsighted to frustrate it by not providing economic paths more in tune with our needs.
Latin America must satisfy the needs of its people through economic growth, and for that it is necessary that in addition to contributing, with dignity our own efforts, vie receive more co-operation from the two other major protagonists in the solution.
International banking has undertaken a major effort in refinancing, but it must be recognized that in the last two or three years sufficient resources have not been transferred to Latin America; which has made the situation worse, we cannot think that the region can continue with a negative net transfer of resources. That is not the way in which any country has achieved development. It is essential to adopt policies that reduce interest rates, which are very high in real terms and which constitute a heavy burden on our balance of payments, limiting the capacity of the economies of the region to grow. The peoples of Latin America will never understand that they are working merely to pay interest.
On the other hand, it is important for the industrialized countries to achieve a rate of economic development of at least 3 or 4 per cent per annum in real terms, and to keep trade as open as possible so that they may buy our products and we theirs; that is the only way to invigorate the world economy.
After three years of experimentation the time has come to re-define the rules of the game and to set goals which will enable us 'co resolve two crucial points: economic growth with greater social well-being, and debt payment on different terms.
We are aware of many serious studies which have examined constructive and appropriate alternatives with a view to reaching better solutions. If we must further adjust to our situation, then let us all do so, developed and developing countries alike, so that by giving free rein to new creative energies we may respond to the needs of our peoples.
Therein lies the challenge we all face, for peace and security in Latin America depend on our bringing concrete solutions to the needs of our peoples and on our meeting their legitimate demands for improved living standards, for a full exercise of democracy and for genuine respect for their freedom and dignity. We cannot think of paying the debt at the cost of our peoples believing that progress and happiness are not possible in the Latin American democracies.
We, the leaders of Latin America, will not accept being faced with the dilemma of choosing between keeping faith with our peoples and paying the debt; for we will keep faith with our peoples. Such a dilemma would affect us all, debtors and creditors alike; thus, it is obvious that it is for all of us to make the choice which will be of benefit to us all. It is our responsibility to guide our peoples along the path of progress, freedom, democracy, opportunity and solidarity.
Good economic and social health in Latin America is advantageous to the industrialized countries, in particular those of the Americas. Our interests are complementary, just as our efforts to achieve well-being, security and peace should be joint efforts.
I believe it necessary to appeal to the conscience and historic responsibility of Ministers, heads of central banks, and the organizations which will soon meet in Seoul: The time has come for new decisions on international financing, trade among countries, and development; to act now, with a sense of balance and responsibility, will result in greater success for all, with a lower political and security cost. The road to peace depends on their action now.
I wish now to speak of our efforts to contribute to peace-making in Central America. He have come a long way towards honing the Contadora Act for Peace and Co-operation in Central America to the point at which it can be signed by all parties. The Governments of Colombia, Mexico, Venezuela and Panama have received many expressions of solidarity and support from the rest of Latin America, and recently, in more concrete terms, from the Lima Group made up of Argentina, Brazil, Peru and Uruguay, from the United Nations, from the Organization of American States, from the Non-Aligned Movement, from the European Economic Community, and from the international community in general. But we have reached the point at which we need more than mere expressions of support.
In truth, very few points in the Act are still under discussion, and differences of position have been considerably reduced, to the point at which a text of the Act which could be approved no longer seems an impossibility, or even a labor of years.
However, I insist once again - and £ know that in this I am joined by the representative Governments of Colombia, Mexico and Venezuela - that in addition to the political will for peace that must soon be exercised by the
countries of Central America - with which the Contadora Group has been holding discussions and co-ordinating meetings, drafting and refining agreements, promoting and fostering conciliation - the responsibility for peace goes beyond the scope of Contadora; it extends to the Governments of countries with interests and ties in this region, where violence among brothers sows grief and desolation.
We are close to peace, but we are also close to increasingly dangerous and serious risks of a general conflict, whose unforeseeable consequences could have an impact on the entire world. We are in the twilight between night and day; at this historic time for Central America, it is of fundamental importance that we opt for the dawn.
As an active Member of the United Nations, Panama energetically condemns the arms race, which continues to grow.
The rivalry between the super-Powers is of deep concern to us, as are the violent actions which threaten world peace on the various continents.
*!e support the peaceful settlement of the problem of the Korean peninsula through direct dialog between its two parts. We also wish to express our wish that the Republic of Korea and the Democratic People's Republic of Korea may soon join the United Nations as fully fledged Members, so that both parts of the Korean peninsula may be present in this Organization.
It is our wish that General Assembly resolutions on the withdrawal of foreign troops from Afghanistan be faithfully implemented, and we support the Secretary-General's efforts to bring about a negotiated political settlement of the problems of that nation.
We reaffirm the need for respect for the rights of the Palestinian people and of the people of Israel, as well as those of the other States and peoples of the region, to live in peace within secure boundaries.
We stress that the war between Iran and Iraq must come to a halt, along with the foreign occupation of Cyprus and the tragic situation in Lebanon.
We believe a solution satisfactory to Argentina should be reached in the situation of the Malvinas Islands.
The alarming situation in Africa is of great concern to us. We recognize Africa's vital need to develop and to free itself from the servitude which has condemned millions of Africans to hunger.
We support African nations in their struggle to free themselves once and for all from all systems and forms of domination, exploitation and racism. We support the efforts of the front-line countries against colonialism in the region and stand in solidarity with the desire of the people of the Saharaoui Arab Republic for self-determination and independence.
We are outraged at South Africa's policy and practice of racism and apartheid which shocks all civilized nations and all those who believe in the dignity, equality and the inalienable right to justice and happiness of the human person. We strongly condemn its illegal occupation of Namibia.
Terrorism in all its manifestations is a practice which our country rejects and condemns because it violates the fundamental principles governing coexistence in societies and because it affects innocent men and women the victims of crimes which have been found reprehensible by all mankind.
We must promote peace and justice. I. am convinced that we can without delay take advantage of the possibilities which are opening up towards the realization of our own destinies and towards the elimination of inequality and imbalances in development that divide countries in two traditional blocs. We are convinced of the capacity for communication among men, of the wish of peoples to coexist and of the real possibility to achieve peace in the world.
Everyone can make a contribution towards enhancing communication between men and between peoples. We are especially proud to have had such an historical noble responsibility for almost 500 years, in facilitating the passage of goods and men between the oceans through the isthmus of Panama. Hence we have opted for peaceful negotiation in the highest spirit of consultation and mutual respect in our dealings with the United States of America over the thorny problem of the Panama Canal. The Torrijos-Carter treaties of 1977 show that both countries are well disposed to an orderly and harmonious transition of the primary responsibility for administering and defending this waterway until the last day of 1999, when it will be fully Panama's. Panama asked for and received international support for its cause. It pledged itself before the world to act with a great sense of responsibility, and it has done so. Today we continue to develop our democracy, our national independence and our economy. We are vigilant to ensure that those Canal pacts are adequately implemented, to resolve through bilateral negotiations
any pending problems of interpretation of the treaties and to bring about the work of widening the canal in the Corte Culebra, which is necessary in order to maintain the efficient operation of the present canal in accordance with the needs of international navigation. At the same time, we are preparing to meet the long-term future. To that end, within the symbolic framework of the United Nations Headquarters, a few minutes ago my country signed with the United States of America and Japan arrangements to undertake studies on alternatives to the Panama Canal so that the people of Panama may be as well informed as possible when the time comes to decide, in sovereignty, its options to continue to offer on a long-term basis an efficient and safe service for international trade and transport.
Panama is on its way to becoming a major inter-American center of international trade, as envisaged by the great liberator Simon Bolivar, always faithful to our history and Latin American heritage.
We are at a crossroads: to offer our peoples answers to find the path to peace and progress or to prepare ourselves to face violence which would go beyond our region and also affect the richer and more developed countries, We cannot go back to the path of inflation and to the draining of the scarce resources of our countries for the benefit of the rich nations. We cannot remain in stagnation, which brings about disenchantment and frustration. We have the technology and the know-how; we have leaders capable of seeing things within a true historical perspective; we have peoples who desire peace, freedom and progress. It is now our role to offeL-, with optimism, creativity and perseverance, the individual and collective leadership which history has placed upon us all.
On this new anniversary of the United Nations, let us renew the original commitment of mankind to win the war against hunger, poverty, disease, racism and inequality, for that is the true path to peace and the destiny God offered man when He endowed him with freedom and with creative force.