The Secretary-General's remarks came at a meeting with the former Presidents of Bolivia, Chile, Colombia, Honduras, Mexico and Uruguay on the future of democracy in the region, as the UN Development Programme (UNDP) released a new study on the needs and vulnerabilities of Latin American democracies.

According to UNDP, the region faces serious institutional problems affecting governance and the rule of law, as well as the independence of the three branches of government, the functioning of the electoral systems, and the organization of political parties and political practice.

The Secretary-General noted in his remarks that all of the 17 countries in continental Latin America have elected governments, but at the same time, many of those countries are home to the most unequal income distribution in the world. According to UNDP, more than 40 per cent of Latin Americans lives below the poverty line.

"The hope that political and economic freedom would provide a formula for meeting the region's massive social demands has in some instances given way to questions about the strength of democracy," Mr. Annan said. "Democratic development in Latin America seems to have reached a critical moment - a moment when it is important to consider its strengths and weaknesses, and to identify the needs and risks for the future."

UNDP's project is an attempt to meet this need, the Secretary-General noted, by seeking to promote dialogue and debate among political, academic and civil society actors. It also hopes to help democracy in the region grow and improve.

"Democracy can only function when it adequately reflects the aspirations of all groups in society," Mr. Annan stressed. "No State could be truly labelled democratic if it does not offer its people a way out from poverty. And no country can truly develop if it excludes its own people from power."