By Raymond Colitt
COSTA DO SAUIPE, Brazil (Reuters) - Latin America leaders pressed their case for a bigger say in world affairs on Wednesday, saying the global economic crisis was not of their making but was undermining their countries' stability.
The Latin American leaders spoke at a region-wide summit, marked by widespread criticism of rich countries as the source of the financial crisis and viewed as an effort to weaken U.S. influence in the region.
The presence of Cuban President Raul Castro at the meeting in northeastern Brazil was touted as a sign of Latin America's growing independence from the United States.
Economic activity is slowing rapidly in the region as commodity prices fall and foreign capital dries up, with several countries coming under pressure to cut social spending and investments in much-needed infrastructure.
Ecuador last week defaulted on its foreign debt, sparking fears of further defaults in the region. Venezuela may have to slash its spending if oil prices remain low, while regional giant Brazil has gone within months from enjoying stellar growth to facing a possible recession.
"It's a great threat for our people and governments, for the political stability of a continent that is just beginning to emerge," said Venezuelan President Hugo Chavez, who plans to hold a referendum next month that would allow him to extend his stay in power.
Brazilian President Luiz Inacio Lula da Silva demanded a bigger say for Latin American and Caribbean countries to help reshape the global economic order.
"We have an important part to play in building a new international economic and political architecture," said Lula.
"I'm worried. Every day the risk premium of my country rises and in the United States it's zero. Something is wrong," he added.
NEW ECONOMIC MODEL?
Bolivian President Evo Morales, an ally of Chavez, said the economic crisis had raised the chance of new "revolutionary movements" emerging in the region.
"We have two paths. To change this economic model, called capitalism, or stimulate new revolutionary movements in our countries, where equality, dignity and solidarity count."
But beyond the talk of a more unified regional stance, the summit was marked by divisions between leftists such as Chavez and centrists such as Lula and Chile's President Michelle Bachelet who are keen to maintain friendly relations with the United States.
In a final declaration, delegates called for an immediate end of the U.S. trade embargo on Cuba. Morales proposed giving the United States a deadline but Lula said President-elect Barack Obama should first be given a chance to present his policy on Latin America.
"Let's not blame all evil on the empire," said Uruguayan President Tabare Vazquez.
"We haven't been able to elaborate a project that gives our people dignity," he said, calling on countries to manage their debt responsibly.
Proposals at the summit to face the crisis included pooling international reserves, boosting regional infrastructure, and creating a regional clearinghouse for fund transfers.
Delegates pledged to draft a blueprint on the integration and supervision of the region's financial markets and the possible adoption of a common currency. They plan to forge a common position ahead of a United Nations conference on the global financial crisis expected in the first half of 2009.
"It's not the time for budget cuts, for denying the state. When the market fails, the only thing society believes in is the state," said Lula.
(Editing by Stuart Grudgings and Todd Eastham)
