Transcripts

China's Economic Growth May Take Root In Latin Nations

PAUL KANGAS: It looks like there could be a big deal in the works when it comes to trade and Latin America. NIGHTLY BUSINESS REPORT has learned the government of China is in talks with the Inter-American Development Bank for a seat at the bank's table. The move would spotlight China's growing presence in Central and South America and bolster the bank's influence there, as well. Jeff Yastine reports.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It is just one more marker showing how much influence China is gaining these days when it comes to Latin American trade and economic growth. China would be the 48th member or shareholder in the Inter-American Development Bank, which also includes the 26 so-called borrowing countries of Latin America, Central America and the Caribbean. Jorge Arrizurieta is a former U.S. representative to the IDB.

JORGE ARRIZURIETA, FORMER US REP., INTER-AMERICAN DEVELOPMENT BANK: The inclusion of China which is about to happen at the Inter-American Development Bank, as a shareholder the U.S. government has actually formally approved it. It was intended to be announced at this meeting. Regrettably, the negotiations broke down on the price of a share of stock, if you will the investment, but soon to be announced, is a good thing.

YASTINE: A good thing because it brings China into more contact with fair trade and environmental rules in developing Latin America's commodity markets and a good thing for Latin America itself, where China's growth in commodity imports has acted as a counterweight to a slowing U.S. economy. All that has contributed to a sense of satisfaction in the air as government delegations from South and Central America gather in Miami for the IDB's annual meeting. With a few exceptions, national economies are humming and lenders like the IDB and its president, Luis Alberto Moreno, are looking to boost the dollars sent to the region.

LUIS ALBERTO MORENO, PRES., INTER-AMERICAN DEVELOPMENT BANK: We have today a Latin America that is far more sophisticated, a Latin America that is growing, that is increasingly more assured of itself and because of not only the impacts on the economy but I think, at the end of the day, because democracy begins to deepen in our countries.

YASTINE: The numbers tell the story. Gross domestic product or GDP rose 5.2 percent in Brazil last year; in Peru, 9 percent; Argentina, 8.7 percent. Colombia's economy grew 6.8 percent as the nation began to emerge from decades of civil and military strife.

CAROLINA RENTERIA, COLOMBIA NAT'L DIRECTOR OF PLANNING: We are recuperating the confidence in Colombia. There are democratic security policies that have returned to Colombia (INAUDIBLE) the territories and that was a big effort in terms of macro-economic policy has allowed us to get these rates of growth which are with no precedent in Colombia.

YASTINE: Challenges remain, especially in making sure the region's poor benefit from economic growth. That's something U.S. Treasury Secretary Henry Paulson will address when he speaks to the bank group Monday. Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.