Planning for Growth After the Peso Crisis

Finance ministers from the Americas began two days of intense talks Friday designed to spur economic growth in the region now that the impact of the Mexican peso crisis has largely passed.

Treasury Secretary Robert E. Rubin, who spoke with reporters upon arrival at the meeting, said economic growth was essential to regional political stability and that he hoped to get a commitment to a pro-growth policy during the talks.

Rubin also made clear that Mexico must continue to reform if its economic revival was to stay on course.

“Mexico is now coming back, and it is time to press on with reforms,” Rubin said.

Officials have said it is clear that the region’s weak links are regulation and supervision of its banking system, which has exacerbated recessions and other economic problems, often causing difficulties in one country to spread to others.

The United States and its hemispheric neighbors, from rich to poor, agree that governments must beef up their capacity to keep closer tabs on the activities of domestic banks at a time when weakness as well as economic strength easily cross borders.

Some of the largest Latin American economies are still dealing with festering banking crises brought on by either a lack of skilled supervision or by foot-dragging on clearly needed reforms to rein in political influence.

Many of these problems have been around a long time. But the Mexican peso crisis, which required an international rescue package led by the United States, showed just how serious they were.

Venezuelan Finance Minister Luis Raul Matos Azocar, whose country went through its worst-ever banking crisis in 1994, said all countries in the region should endorse a plan to improve the quality of banking supervision.

Representatives from the 30 participating countries are also expected to tackle the issue of money-laundering, a problem that infects both developing and emerging financial systems.

The International Monetary Fund has estimated that Latin America could grow by about 3.1% this year, after sinking to 0.9% in 1995 as a result of the Mexican crisis. In 1994, the region’s economy grew 4.7%.