October 22, 1981

I am honored to be with all of you on this historic occasion.

In many ways, this summit is not ours alone. It belongs to the millions who look to us for help and for hope. If they could speak to us today, I believe they might tell us that words are cheap, that cooperative action is needed -- and needed now. In their name, let us join together and move forward. Let us meet the challenge of charting a strategic course for global economic growth and development for all nations.

Each of us comes to Cancun from a different domestic setting, where our major responsibilities are found. My own government has devoted much of the past year to developing a plan of action to strengthen our economy. For years, our government has overspent, overtaxed, and overregulated, causing our growth rates to decline and our inflation and interest rates to rise. We have taken bold measures to correct these problems, and we are confident they will succeed -- not tomorrow, nor next week, but over the months and years ahead.

We believe restoring sound economic policies at home represents one of the most important contributions the U.S. can cake to greater growth and development abroad. The actions we are taking will renew confidence in the dollar, strengthen our demand for imports, hold down inflation, reduce interest rates and the cost of borrowing, and increase resurces for foreign investment.

I have also had a chance to study and discuss with various leaders the domestic problems you face. I know how diverse and serious they are. For the poorest countries, more food and energy are urgently needed, while raising productivity through education, better health and nutrition, and the acquisition of basic facilities such as roads and ports represent longer-term goals.

Middle-income countries need foreign capital, technical assistance, and the development of basic skills to improve their economic climate and credit worthiness in international capital markets. The more advanced developing nations, which already benefit from the internation economy, need increasing access to markets to sustain their development.

And across the spectrum, many among you who are oil importers face acute financial difficulties from the large debt burdens resulting from the oil price shocks of the 1970's. High interest rates are exacerbating these problems, such that debt servicing and energy costs are making excessive claims on your foreign exchange earnings.

We recognize that each nation's approach to development should reflect its own cultural, political, and economic heritage. That is the way it should be. The great thing about our international system is that it respects diversity and promotes creativity. Certain economic factors, or course, apply across cultural and political lines. We are mutually interdependent, but, above all, we are individually responsible.

We must respect both diversity and economic realities when discussing grand ideas. As I said last week in Philadelphia, we do not seek an ideological debate; we seek to build upon what we already know will work.

History demonstrates that time and again, in place after place, economic growth and human prograss make their greatest strides in countries that encourage economic freedom.

Government has an important role in helping to develop a country's economic foundation. But the critical test is whether government is genuinely working to liberate individuals by creating incentives to work, save, invest, and succeed.

Individual farmers, laborers, owners, traders, and managers -- they are the heart and soul of development. Trust them. Because whenever they are allowed to create and build, whereever they are given a personal stake in deciding economic policies and benefiting from their success, then societies become more dynamic, prosperous, progressive, and free.

With sound understanding of our domestic freedom and responsibilities, we can construct effective international cooperation. Without it, no amount of international good will and action can produce prosperity.

In examining our collective experience with development, let us remember that international economic institutions have also done much to improve the world economy. Under their auspices, the benefits of international commerce have flowed increasingly to all countries. From 1950 to 1980, GNP per capita in 60 middle-income countries increased twice as fast as in the industrial countries when real purchasing power is taken into account.

Despite the mid-seventies recession, we were able to liberalize the international trading system under the leadership of the GATT. This created new trading opportunities for a number of developed and developing countries.

The IMF remains the centerpiece of the international financial system. It has adjusted its programs and increased its resources to deal with the major pressures and problems of our era. The World Bank and other multilateral development banks have dramatically increased their resources and their overall support for development.

Much remains to be done to help low-income countries develop domestic markets and strength their exports. We recognize that. But we are just as convinced that the way to do this is not to weaken the very system that has served us so well, but to continue working together to make it better.

I am puzzled by suspicions that the U.S. might ignore the developing world. The contribution America has made to development -- and will continue to make -- is enormous.

We have provided $57 billion to the developing countries in the last decade -- $43 billion in development assistance and $14 billion in contributions to the multilateral development banks. Each year, the U.S. provides more food assistance to developing nations than all other nations combined. Last year, we extended almost twice as much official development assistance as any other nation.

Even more significant is the U.S. contribution in trade. Far too little world attention has been given to the importance of trade as a key to development.

The U.S. absorbs about one-half of all manufactured goods that non-OPEC developing countries export to the industrialized world, even though our market is only one-third the total industrialized world market. Last year alone, we imported $60 billion worth of goods from non-OPEC developing countries. That is more than twice the official development assistance from all OECD countries. Our trade and capital markets are among the most open in the world.

The range and breadth of America's commitment extend far beyond concessional assistance. We believe in promoting development by maximizing every asset we have.

As the world's largest single market, we can be a powerful conductor for economic progress and well-being. We come to Cancun offering our hand in friendship as your partner in prosperity. Together, we can identify the roadblocks to development and decide the best ways to stimulate greater growth everywhere we can. We have yet to unleash the full potential for growth in a world of open markets.

The U.S. is here to listen and learn. And when we leave Cancun, our search for grogress will continue. The dialog will go on. The bonds of our common resolve will not disappear with our jet trails.

We are prepared to carry out the commitment in the Ottawa summit declaration to conduct a more formal dialog -- bilaterally, with regional groups, in the United Nations, and in specialized international agencies. We take seriously the commitment at Ottawa ``to participate in preparations for a mutually acceptable process of global negotiations in circumstances offering the prospects of meaningful progress.''

It is our view that ``circumstances offering the prospect of meaningful progress'' are future talks based upon four essential understandings among the participants.

-- The talks should have a practical orientation toward identifying, on a case by case basis, specific potential for or obstacles to development which cooperative efforts may enhance or remove. We will suggest an agenda composed of trade liberalization, energy and food resource development, and improvement in the investment climate.

-- The talks should respect the competence, functions, and powers of the specialized international agencies upon which we all depend, with the understanding that the decisions reached by these agencies within respective areas of competence are final. We should not seek to create new institutions.

-- The talks should take place in an atmosphere of cooperative spirit, similar to that which has bought us together at Cancun, rather than one in which views become polarized and chances for agreement are needlessly sacrificed.

If these understandings are accepted, then the U.S. would be willing to to engage in a new preperatory process to see what may be achieved. I suggest that officials of our governments informally confer in the months ahead as to appropriate procedures

But our main purpose in coming to Cancun is to focus on specific questions of substance, not procedural matters. In this spirit, we bring a positive program of action for development, concentrated around these principles:

-- stimulating international trade by opening up markets, both within countries and among countries;
-- tailoring particular development strategies to the specific needs and potential of individual countries and regions;
-- guiding our assistance toward the development of self-sustaining productive activities, particularly in food and energy;
-- improving the climate for private capital flows, particularly private investment; and
-- creating a political atmosphere in which practical solutions can move foward, rather than founder on a reef of misguided policies that restrain and interfere with the international marketplace or foster inflation.

In our conversations, we will be elaborating on the specifics of this program. The program deals not in flashy new gimmicks, but in substantive fundamentals with a track record of success. It rests on a coherent view of what's essential to development -- namely political freedom and economic opportunity.

Yes, we believe in freedom. We know it works. It's just as exciting, successful, and revolutionary today as it was 200 years ago.

I want to thank our hosts for arranging this historic opportunity. Let us join together and proceed together. Economic development is an exercise in mutual cooperation for the common good. We can and must grasp this opportunity for our people and together take a step for mankind.

Note: The President read the statement at the 2-day meeting which began at 10 a.m. at the Cancun Sheraton Hotel. In the inaugural session, President Jose Lopez Portillo of Mexico, host and Cochairman of the meeting, made welcoming remarks, Prime Minister Pierre Elliott Trudeau of Canada, honorary Cochairman, also made introductory remarks.

The first plenary session began at 10:30 a.m. The leaders of the 22 participating nations and Secretary General Kurt Waldheim of the United Nations made statements.