By the end of 2007 there will be twelve democratically elected heads of government engaged in bringing change to Latin America. The World Economic Forum on Latin America in Santiago de Chile will provide a unique setting for understanding recent power shifts in the region, identifying new business opportunities, and drawing up economic policies to shape regional development.
Opening Plenary
Added Chilean Finance Minister Andrés Velasco: "The question is how we may be able to invest more. We have to have good sound projects. And we can agree that a major priority is to reduce the costs of investment." Other panellists agreed that countries have to further reform their financial sectors to deepen capital markets, improve access to credit, and make sure that the region is not vulnerable to shocks.
"We have been successful in building a group of executives who are exposed to the international market. One advantage is that they have been exposed to volatile markets of high complexity, very big interference from government, and inflation. This has created a group of people ready to move into the international arena with good multicultural experience ready to foster growth in their companies," said Grubisich. Concluded Ricardo Villela Marino, Executive Director, Banco Itau, Brazil: "To be a global champion, you need to have the advantage not only at home but in all markets. Do we have the leadership capacity to do so? Our real assets are our people." The World Economic Forum will draw together the emerging business giants at its Inaugual Annual Meeting of the New Champions in Dalian, China, from 6-8 September.
This session sought to delineate some possible solutions for achieving a higher quality educational system, focusing on ways to stimulate cross-sector collaboration among governments, private companies and academia to boost innovation and quality.
The regional GDP growth rate is forecasted to be in the vicinity of 4.5-5%. This represents a continuation of recent economic growth in the region (which has seen an increase in GDP per capita of 16% in four years), and is more than double the region’s long-running average of 2.5% growth. The long-term energy outlook was also discussed, with agreement that recent trends in world demand represent a long-term sectoral shift due to the emergence of China and India (with China alone representing 30% of the growth in oil demand over the past 10 years). The need for huge investments to enact a suitable supply-side response was emphasized.
In a signing ceremony, which took place in the context of the World Economic Forum on Latin America, IIC Board Chairman, Luis Alberto Moreno, President of the Inter-American Development Bank, Washington DC, signed the Memorandum of Understanding with World Economic Forum Managing Director, Richard Samans, a Board member of the PACI.
While respecting the great diversity in Latin America and the fact that it has successfully consolidated democracy through the election of 13 governments in the 2005-2006 period, participants at the World Economic Forum on Latin America acknowledged the need to create more social inclusion and build consensus regarding globalization, integration and both intra and inter country free trade.
“From an investor’s perspective, the report provides a customized toolkit for investment decisions and location choices in Latin America while it guides policy-makers in the choice of the best policies to foster their national attractiveness for private investment in infrastructure and in prioritizing sectors and measures,” said Julio Estrada, Research Projects Manager for Latin America at the World Economic Forum. Quotes
Ricardo Lagos Escobar, President, Fundacion Democracia y Desarrollo, Chile "The critical issue is to think of what is necessary to encourage local and international investors to invest more and efficiently." John Lipsky, First Deputy Managing Director, IMF, Washington
Zhang Shoulian, President, China Minmetals Non-ferrous Metals, China, Co-Chair, World Economic Forum on Latin America
Javier Santiso, Deputy Director, Chief Development Economist, OECD
José Miguel Insulza, Secretary-General, Organization of American States (OAS), Washington DC
"There is a broad consensus amongst leaders of government and the private sector about the path to grow the economy while providing greater openness for everyone to participate in that prosperity" Andrónico Luksic Craig, Vice-Chairman, Banco de Chile, Chile
Co-Chairs
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Brazilian, Chilean leaders close World Economic Forum on Latin America
Two Latin American presidents called for deeper regional integration and increased investment in education, two priorities that mirrored a consensus among the 400 business, government and civil society leaders from 28 countries participating in the World Economic Forum on Latin America. "It is important that you believe in the integration of Latin America," Brazilian President Luiz Inacio Lula da Silva said. Later, Chile’s President, Michelle Bachelet, told participants that for her country and other Latin American nations to reach a higher level of growth and productivity, "the priority is to take a great leap to ensure quality education for all." Added Bachelet: "We want to grow to be inclusive and be inclusive to grow."
Participants at the World Economic Forum on Latin America agreed on five top priorities for the region - an action programme for achieving and sustaining higher growth and productivity. They include education, the environment, R&D investment, efficient taxes and infrastructure. "It is not sufficient to bring growth back to our economies," said José C. Grubisich, CEO, Braskem, Brazil, and a meeting Co-Chair. "We should focus on how to bring about a stable macroeconomic position and combine growth and investment to reduce poverty."
To take on the world, high-growth companies need to have the human resources to compete internationally. Latin America's skilled executives have become a major competitive advantage for global growth, said José Grubisich, CEO, Braskem, Brazil and Co-Chair of the World Economic Forum on Latin America. Business leaders in emerging economies are reshaping industrial sectors and creating new dynamics in the global competitive landscape, panelists agreed.
Latin American companies are well-placed to create profitable ways to help the world reduce carbon emissions. We can transform this into a business opportunity, said Julio Moura, CEO and Chairman of the Board, GrupoNueva, Chile; Vice-President, World Business Council for Sustainable Development (WBCSD), Switzerland. Moura outlined some of the steps his own company is taking, such as joining the Chicago Climate Exchange and investing in biomass energy. Climate change is good business, he said.
There is continuing concern about the quality of education in Latin America. While enrolment is up, the quality of learning remains sub-standard, one of the key factors retarding the competitiveness of Latin countries, according to panellists of an education-dedicated session at the World Economic Forum on Latin America.
Despite a relatively upbeat outlook of strong economic growth into 2007/8, there are a number of dark clouds on the horizon that threaten the Latin American Goldilocks scenario. Panellists in a session at the World Economic Forum on Latin America listed them as a potential overheating in Asia; a further deterioration in the US housing sector which could cause a sharp slowdown in US consumer spending; and a global re-appreciation of risk.
Latin America must break out from the boom-bust commodity price cycle by finding new sources of growth, productivity and stability, Chilean Minister of Finance Andrés Velasco told participants in the opening plenary session of the World Economic Forum on Latin America in Santiago. "The challenge is for us to grow regardless of the cycles," Velasco said. A key priority is to promote innovation, which would lead to increased productivity.
The World Economic Forum’s Partnering Against Corruption Initiative (PACI) and the Inter-American Investment Corporation (IIC) signed a memorandum of understanding today aimed at countering corruption and bribery. The agreement will encourage corporations to take a "zero tolerance" stand on corruption and to implement effective anti-corruption programmes in the region. The joint activities will concentrate on Latin America and the Caribbean.
"I remain optimistic about what the region can accomplish and I believe that we have the people, resources and institutions existing now to address the big problems it faces but it is a question of working together. So an agenda focusing on dialogue and cooperation is going to be essential," said Thomas Shannon, Assistant Secretary, Bureau of Western Hemisphere Affairs, US Department of State, at the World Economic Forum on Latin America in a session on inter-American relations.
Chile, Brazil, Colombia and Peru lead the region with respect to the attractiveness of their private investment climate for infrastructure. Covering 12 economies in Latin America and the Caribbean, the new study assesses the main drivers of private investment in infrastructure projects for ports, airports, roads and electricity. Released at the start of the World Economic Forum on Latin America, taking place in Santiago de Chile, this is the first time that the Forum has developed an index specifically analysing the investment environment for infrastructure.
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Chile has achieved high growth rates, but income distribution remains a large problem. Chile and Brazil do not face the question of a rich or a poor country, but an 'injust' society."
“Global companies are looking to India and China which gives our local companies the opportunity to restructure and to prepare a strong platform to move into the international market."
“We see our clients expanding and globalizing especially our corporate clients, which is why we decided to have branches in the US, Europe and Asia.”
"The trade and investment relationship between Latin America and China is a long term strategic partnership."
"China and Latin America are two faces of the same coin. China represents an opportunity. It is a wake up call for Latin America to pursue reforms."
"We can look at Latin America with a positive perspective: democracy is working in most territories and the economy is growing. In comparison with other regions and the past, the region is growing more than it has in the past 30 years."
"Brazil will be one of the major players in some areas like agribusiness, biotechnology and software, for instance, in the coming years."
