Microcredit lending is a very efficacious tool for developing the countryside and incorporating professionals and artisans into the productive activities of the country.

1. People say that of all those who have been European heads of government, you are the one closest to the Latin American countries. How come? From when I was very young, I was always interested in what was going on across the Atlantic. It was a region where many Spaniards had found refuge after the civil war, especially in Mexico and Argentina. Several of our most prestigious intellectuals took shelter there and were doing successful work in education, medicine, philosophy and law. They were really putting something into those countries’ development. Modern Mexico couldn’t conceivably be what it is now without the contribution of the top-class professionals taken in by Cárdenas’ government.  My own relationship with that part of the Atlantic was so intense that when I stood for the first elections in 1977, people had seen me more on television in Mexico than in Spain.

2. What advantages are there in strengthening the relationship between Latin America and Spain, on either side? What aspects of that relationship do you consider to be most necessary? There is a community in which, despite there being multiple distinct identities, there are also common realities and overlaps. Such a community can become an association of interests, a cultural community, in the sense of an identity of identities, similar to others that have achieved significant results in international circles and in cooperation between our countries. Cultural and social exchange and trade between all the countries of the Ibero-American community have increased considerably and have much potential for further growth. Movements towards greater integration will become stronger when the trade among the countries of the region is as intensive as their overall regional trade is with other regions of the world.

3. What led Latin America to open up to the idea of human rights? How do you think the conquest of these rights can best be preserved? From the moment I came into government, I had the idea of strengthening relations with Latin America as one of the priorities in Spain’s opening up to the world. I must say that right from the outset there was the goal that, once the relationship was on track, there should be a process of democratisation, of accepting pluralism. I thought a period of normality would be initiated after the terrible dictatorships and socio-economic situations that had devastated some of the countries in the lost decade of the nineteen-eighties, which I lived through as prime minister of Spain, almost in its entirety. You ask how best to preserve the conquests made. By strengthening the democratic institutions. Democracy needs to be looked after, day in day out, and its institutions need to be regenerated. The legislature must lay down fair laws bearing in mind the welfare of the citizens. The justice system must be independent and efficient in protecting rights and enforcing obligations. And the executive must defend the interests of the majority and respect legal standards. Democracy does not guarantee us good governance, but it does give us the chance to throw out a government that has not done things well and since politicians do not want to lose their jobs, they will try to cater to people’s interests.

 

4. Democracy has been a cornerstone of economic development in the Latin-American countries. But has it contributed in the same way to the development of greater social equality? Without a doubt. But I do think we should insist on one of the strategic variables necessary to drive this development and spread it further: education, education, education. The formation of human capital. Failing to establish education as one of the priorities has helped inequality persist. That is really what concerns me as a citizen on both sides of the ocean.  In Latin America the situation has improved whichever way you look at it, although maybe there is too much specialisation in the export of commodities. Taking advantage of a moment like this to reindustrialise and to tap into the knowledge society would be critical to achieve greater equality. And Spain also needs to do something along these same lines.

5. Latin America is the region with greatest economic and social inequality. Despite economic growth, the reduction of poverty and inequality has stagnated, according to the latest ECLAC report “Social Panorama of Latin America 2014”. What do you think are the causes behind such stagnation? What recommendations do you have to encourage more equitable distribution of wealth?

I would recommend the formation of human capital. With a very young average age throughout the region, that would make development more egalitarian. As to the causes of the stagnation, it is clear that the world-wide economic crisis has hit very hard. The countries in this area suffered it less to start with, in part because Latin America had the advantage of a regional economy that is relatively under-banked, so it did not suffer the implosion of the financial system as much as some other places. However, it was impacted by the consequences of the crisis. Spanish financial institutions in these countries made a serious contribution to the way the financial system behaved with respect to the Latin-American economy. However, the consequences of world-wide economic stagnation are making themselves felt and have put the brakes on the growth of some big countries, such as Brazil and Argentina.

The solution lies in increasing redistribution of incomes, above all indirect income, such as through education and health. It is not a matter of growing so that the leftovers can flow down to the poorest in society, but rather to grow with a model that prospers and redistributes. When this cannot be done through wages, because the south is competing with the south through wage levels, the redistribution should take place through indirect mechanisms, such as access to education or access to health, which gives additional income and enhances human capital.

6. The Foundation, through its Group members, has developed its own method, Productive Responsible Finance. Its goal is to fund productive projects and activities among the sectors of the population seen as most vulnerable, and to offer them advisory services and training. To what degree do you think that microfinance helps the economic and social inclusion of the most disadvantaged classes?

A lot. And for those of us who followed Brazil’s experience under Lula da Silva’s government, even more. President Lula granted property rights to the slum-dwellers in the favelas of Rio de Janeiro and Sao Paulo. That turned them into citizens with rights and duties. As owners of property rights, they ceased to be on the fringes of the economy and could access bank loans. Microcredit loans for productive activities propelled the development of the most depressed areas and incorporated citizens from outside the circuits of production into economic consumption. If we want to pull the greatest number of citizens in from the fringes of the economy, we must find imaginative methods to make them productive and incorporate them into consumption. Microcredit loan are a very efficacious instrument for developing the countryside and incorporating professionals and artisans into the productive activities of the country.

7. The Foundation holds workshops on corporate governance on a non-profit basis in Latin America, to encourage the implementation of formal, transparent governance frameworks in the sector. What influence do you think establishing best corporate governance practices has on the economic development of a country?

Latin America must make an enormous effort to improve decision-making processes. The public and the private sectors must work together to sustain development in the medium and long term. But there is one thing that must be given top priority: institutions need to make decisions in a more efficient, more predictable manner. Good corporate governance practices are absolutely vital at all levels. It is not possible to make entrepreneurs accountable when there is no predictability about their future, if when they project their investments, they are just making speculative, short-term bets. To sustain investments in the medium and long term, investors need to know that what they do has predictable outcomes; that they do not have to go for an immediate killing because there is enough space for them to recover the investment and take part in the development of the countries where they are investing. There is a lot more argument over legal certainty, which is really implicit in what I am saying. We need foreseeability and efficiency in the decision-making process. I suggest we require an enormous effort to enhance institutions (both businesses and the government) so that they can process decisions well and provide visibility of the future in the short, medium and long term.

8. How does a statesman like you conceive of equality between men and women? Have you observed significant progress in the role of women in business?

I see it as an urgent need that all governments must support. I sometimes say that they should do this even if only out of self-interest. What business can afford to miss out on fifty per cent of its workers for reasons of gender… or any other difference, come to that? It would be ruinous! In society we have to become aware that we cannot write off 50% of our citizens with all their qualities and their value and potential.  It is very likely that we are seeing a fight of power. Men fear losing their pre-eminence and fight desperately to avaid an equality that becomes more unavoidable with every day. In the business world, equality is a long way off, especially at senior management level. But that is not the case in politics, where equality is more visible in this region of the world, with three women heads of state.

9. We know you read law at university in Seville and subsequently practiced as a labour lawyer there for a time. During your very long professional career, have you ever missed being involved in law?

Quite honestly, I have never been that far from the world of law, because when you are in government you have to be very aware of the rights of all the people you are representing and the obligations your position imposes on you. I had a very intense life as a politician, because there was much to do in a country that had just emerged from being a dictatorship. Right now, moreover, I am very deeply involved in the defence of political prisoners in Venezuela, imprisoned for their political views. My job is to advise the defence lawyers, as permitted by Venezuelan law, and I propose to help establish a dialogue between all the stakeholders to find a way out of the social and economic crisis the country is in. This is not the first time I try to get freedom for political prisoners, but it is the first time I try to get freedom for political prisoners in a democratic country.

10. You are a great Nature lover. Within the American continent, which landscape has impressed you most?

It is very hard on such an enormous continent with so much variety to choose just one landscape. From the highest peaks of the Andes to the Patagonian plains in Argentina or the Chilean Antarctic or the Sierra Nevada in Colombia or the Caribbean islands or the Barranca del Cobre in Mexico, the Angel Falls in Venezuela, the Amazon forest in Brazil, Machu Pichu in Peru…. We are talking about unique landscapes you will never find anywhere else in the world. Why choose just one?

11. Given your outstanding role in the recent history of Spain, if you had to choose a moment in history in which to live, when would it be?

I think the life I have lived and am still living is very gratifying whichever way you look at it. Bear in mind that I was given the trust of my fellow citizens to govern this country for many years, for which I am extremely grateful. What governor does not want citizens to vote for him and give him the freedom to do what he has proposed to them? I have had various absolute majorities and have even come across citizens who did not vote for me but were in agreement with what we were doing. I think the time I happen to have been born into suits me fine and there is still so much more to do…