Economic Decline Threatening Latin Democracies, Leaders Say

The stability of Latin American democracies is being threatened by a dramatic economic decline that has driven per-capita incomes below 1978 levels, the presidents of the region’s major democratic countries said Saturday.

Concluding a three-day summit, the seven presidents--four of whom represent reborn democracies--appealed in a communique for an urgent dialogue with industrialized countries to negotiate a reduction in the region’s $420-billion foreign debt and to search for ways to emerge from economic stagnation.

The presidents said after their summit here that the Latin American economy in the 1980s has shown negative growth, with incomes falling below that of 1978 and a net outflow of more than $100 billion in the last five years.

Threat to Stability

“The stability and the social and economic development of Latin America are threatened by the grave problems of the debt and the unfavorable development of international commerce, which in great measure are the product of external factors outside the region,” they added.

The summit brought together the presidents of Argentina, Brazil, Colombia, Mexico, Peru, Uruguay and Venezuela, with a total population of 320 million people. Panama, a member of the Group of Eight, was suspended in February when Gen. Manuel A. Noriega ousted President Eric A. Delvalle.

President Julio Sanguinetti of Uruguay said the return of democracy to much of Latin America during the 1980s needs to be anchored with economic progress that will demonstrate to the region’s people the value of political freedom.

“The challenge of development is the challenge of democracy,” he said. “We want a new dialogue with the world--a mature dialogue between equal partners.”

The communique noted that “every one of our countries has adopted programs of profound economic reform, aimed at transforming productive structures and becoming part of the world market. However, we do not see a corresponding effort on the part of developed countries.”

President Alan Garcia of Peru, buffeted by inflation in September of 114% with resultant shortages, strikes and rioting, told a news conference that democracy in Peru is not under immediate threat, as suggested by some news reports of coup plots. But he said the long-term democratic future of the region depends on its economic stability.

The presidents expressed satisfaction that the group has won recognition as a voice for Latin America since the first summit in Acapulco last year. They declared their determination to use their influence in meetings with other political blocs, especially those representing the creditor countries.

“The goal in Acapulco was to talk among ourselves. The goal now is to start talking with the rest of the world,” Garcia told reporters.

President Raul Alfonsin of Argentina said the response of the United States to the call for dialogue would be especially significant. He said that when the Group of Eight was founded, the United States expressed concern that the goal was confrontation with northern countries.

“Today, we all feel this position has changed. This is the moment to sit down and talk, with maturity and responsibility,” he said.

Dante Caputo, Argentina’s foreign minister and the newly elected president of the U.N. General Assembly, told reporters that he is almost certain that the new dialogue will bear fruit in the form of a meeting between presidents of the developed countries and the developing countries early next year. He said the North has realized that its security is linked to economic growth and stability in poorer countries.

The finance ministers of the seven nations will meet in December in Rio de Janeiro to study options for reducing the debt burden other than merely delaying repayment.