World Economic Forum on Latin America
The Power of a Positive Regional Agenda
Santiago de Chile, 25-26 April 2007
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Page 2 Preface Page 3 Summary: The Power of a Positive Regional Agenda Page 6 World Trends and Issues Page 10 Changing Perspectives and Priorities in Latin America Page 14 Understanding the Mindset of Latin American Policy-makers and Business Leaders Page 18 Achieving Equitable Income Distribution in Latin America Page 22 China and Latin America Page 26 Acknowledgements
Emilio Lozoya Associate Director, Global Leadership Fellow, Head of Latin America
Latin America’s current historically high levels of electoral democracy and political stability, coupled with its recent economic success, is changing mindsets in addition to inter- and intraregional trade and investment flows. This year’s theme, The Power of a Positive Regional Agenda, highlighted the need to acknowledge and consolidate recent regional successes, as well as to re-evaluate strategic priorities and working assumptions as the region enters an era of newfound opportunities and emerging risks. The World Economic Forum’s regional activities are designed to look at the past in order to deepen our understanding of history, but also to look forward and establish priorities for the future. Viewing the past, our members agreed on their relative satisfaction with the improved regional macroeconomic stability, democratic progress and poverty reduction indicators, although not with levels of inequality. As regards the future, an agenda or common denominator as a priority for the medium term was achieved by building up a Santiago Consensus. This Consensus should help shape a clear and positive regional agenda in order to boost economic growth with more equitable income distribution. The region is growing faster than in the past, but not as fast as other emerging markets, and clearly not fast enough to tackle its dramatic socio-economic imbalances. Most countries have benefited from positive international trends, such as lower interest rates, a very benign liquidity environment and historically-high commodity prices. Higher productivity rates and therefore more economic growth will mainly derive from innovation and investments in human capital in the next few decades. Therefore, the current positive trend will only be sustainable socio-politically if the Latin American leadership is able to craft effective strategies to create more quality jobs, manage social tensions and establish clear long-term plans with national consensus across the political spectrum. No single institution can be expected to both anticipate and address the region’s evolving agenda. Therefore, the programme of the World Economic Forum on Latin America was designed to generate insight and guide action in order to improve the alignment of the region’s industrial, political, social and economic agendas. Moreover, the programme was organized under five thematic pillars to help participants make the most of the opportunity to shape the regional agenda. At the core were sessions aimed at understanding the impact of world trends on the region, the economic influence of China on Latin America and ensuing opportunities, and boosting infrastructure and energy investments in priority areas. Other sessions focused on climate change and its opportunities for Latin American countries, and workshops engaged in understanding the shifts in power within the region and the changing perspectives of the newly elected leaders. Discussions aimed to improve the investment climate, the productivity and thus the competitiveness of the region’s economies through the sharing of lessons learned. Recent data on investment flows and regional investment plans shared by Forum member companies in Santiago point to increased regional integration led by the business sector. This positive trend will slow, however, if the various regional stakeholders do not act rapidly to increase physical integration through infrastructure investments and if they do not work wisely on a pragmatic political integration plan that can help the region act in a coordinated manner and influence the global agenda, thus enhancing the prospect of improving the quality of life of the region’s population.
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Summary: The Power of a Positive Regional Agenda
More than 400 business, government and civil society leaders gathered in Santiago for the World Economic Forum on Latin America. The recent economic growth that the region has experienced – over 5% on average in the past three years – and its increasing political maturity have offered Latin American countries the opportunity to pursue real reform at a time when the risks they face appear manageable. A major challenge is to prepare the continent’s economies to withstand the shocks that have previously been their undoing. This will require creating the conditions to encourage new investment and participation by the private sector and inspire policies aimed at achieving equitable income distribution. In particular, increased investment in infrastructure, human capital and R&D, as well as accelerated institutional reforms, are needed. “Globalization is creating winners and losers,” said Jean-Pierre Rosso, Chairman, Centre for Global Industries at the World Economic Forum, referring to the emergence of dynamic global growth companies. But that assessment equally applies to countries and regions. The question is whether Latin America is prepared to take the steps to ensure that its economies and its enterprises are ready to compete in the global economy – and win. Continuing on from work done at last year’s gathering in São Paulo, participants aimed to demonstrate “the power of a positive regional agenda”, the theme of the meeting in Chile. By the end, they had shaped the Santiago Consensus, a list of priorities for change in Latin America. They include a focus on education,
environmental responsibility, investment in innovation, the creation of efficient tax systems and public spending procedures, and infrastructure development. This winning strategy, concluded Richard Samans, Managing Director, Centre for Public-Private Partnerships at the World Economic Forum, represents “a more deliberate and multifaceted effort to achieve higher growth and equity”. “The current benign international economic trend, coupled with the improved regional macroeconomic situation, offer a very important occasion to carry out the second-generation reforms that were agreed upon as priorities in the Santiago Consensus. It is clearly easier to carry out these public policies with the support of the private sector and civil society when the accounts are balanced or even in surplus,” said Emilio Lozoya, Head of Latin America at the World Economic Forum. The opportunity offered by the momentum for a positive agenda of action must be seized. The Santiago meeting was organized around five subthemes: “World Trends and Issues”, “Changing Perspectives and Priorities in Latin America”, “Understanding the Mindset of Latin American Policymakers and Business Leaders”, “Achieving Equitable Income Distribution in Latin America”, and “China and Latin America”.
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From left to right: Martín P. Redrado, President of the Central Bank of Argentina; Andrés Velasco, Minister of Finance of Chile; Pamela Cox, Vice-President, Latin America and the Caribbean, World Bank, Washington DC; José C. Grubisich, Chief Executive Officer, Braskem, Brazil, and Co-Chair of the World Economic Forum on Latin America; John Lipsky, First Deputy Managing Director, International Monetary Fund (IMF), Washington DC
World Trends and Issues
Latin America is experiencing an unprecedented period of strong economic growth relative to the past 20 years and stable political development. Economic growth has been bolstered by the region’s growing trade relationship with Asia, particularly China, while political institutions have been strengthened by a series of democratic elections across the continent. • There remain real risks to Latin America’s prosperity and stability, including the potential for a hard landing in China or an economic slump in the US. As it gets more deeply integrated into the global economy, Latin America may also become more vulnerable to shocks from outside the region. • High petroleum prices and volatility in the market present tough challenges to oil-consuming countries and substantial windfalls for energy producers. • Such environmental risks as climate change could be turned into an opportunity rather than remain a threat to Latin America. • While the private sector must take a greater role in the economy, the government must take efforts to pursue policy reforms that will ensure that Latin American economies can weather the shocks that have previously been their undoing.
Changing Perspectives and Priorities in Latin America
The emergence of the Santiago Consensus indicates how perspectives and priorities are changing in Latin America. The new priorities for the region are education, innovation and institutional reform. • The only viable path for the region is towards prosperity with equity. The focus must be on greater investment and stronger growth as well as on reducing poverty. • The environment must be a priority for sustainable growth as well as a business opportunity for the region. • Tax reform and sound public spending are crucial to stimulating growth and productivity in the region. • Private investment is fundamental to addressing deficiencies in infrastructure in the continent. • Governments must aim to break their economies out from the boom-bust commodity price cycles that have marked Latin America’s past development.
Understanding the Mindset of Latin American Policy-makers and Business Leaders
The populism of Latin America’s past is giving way to a more clear-headed leadership style marked by pragmatism and innovation. The changing mindset in the region is reflected in shifting views on the environment and corruption. • In contrast to the infallible strongmen of the past, Latin American leaders are more willing to admit problems and mistakes and to take a realistic approach to solving them.
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From left to right: Alejandro Jara, Deputy Director-General, World Trade Organization (WTO), Geneva; Andronico Luksic Craig, Vice-Chairman, Banco de Chile, and Co-Chair of the World Economic Forum on Latin America; Alberto Padilla, Senior Business Anchor, CNN en Español, USA; Zhang Shoulian, President, China Minmetals Non-ferrous Metals, People's Republic of China, and Co-Chair of the World Economic Forum on Latin America; and Luiz Fernando Furlan, Minister of Development, Industry and Foreign Trade of Brazil (2003-2007)
• In the area of infrastructure development, Chile has demonstrated that a pragmatic strategy can yield results. • Forward-looking Latin American business leaders are driving positive changes in environmental policy. • The old image of Latin America as a corrupt society is being refuted by an increasing number of success stories that provide anecdotal evidence that the situation is improving.
China and Latin America
The deepening of trade and investment ties between China and Latin America has turned the two sides from distant friends to strategic partners with a range of common interests. • For a real partnership to evolve, China and Latin America will have to develop a more textured relationship based on more than commodities and raw materials trading. • Latin American business must find ways to exploit the opportunities offered by China’s economic rise. Economies in the region must also takes steps to boost their comparative advantages to allow them to compete in a global economy in which China and India have become key players. • China’s emergence should inspire Latin American economies and companies to pursue critical reforms that will strengthen their ability to withstand the pressures of globalization.
Achieving Equitable Income Distribution in Latin America
The top priority of the Santiago Consensus, education emerged as the chief means to achieve equitable income distribution in Latin America. • Deficiencies and disparities in education are the root of social inequality and, as a consequence, of political risk. • High-quality education is a necessary precondition for innovation. • Throwing money at the problem is not a sufficient solution. Instead, investment in education is necessary to improve the quality of schools. Business should be encouraged to play a role in educational reform and development. • To improve the quality of education requires, better curricula, effective benchmarking and assessment, the creation of stimulating environments for learning, the professionalism of teachers, and strong participation of parents and the wider community to ensure that schools are properly funded and students are inspired to learn.
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World Trends and Issues
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.
and expanding, pulling many people out of poverty.
Alejandro Jara, Deputy Director-General, World Trade Organization (WTO), Geneva
Thomas A. Shannon Jr, Assistant Secretary, Bureau of Western Hemisphere Affairs, US Department of State, Washington DC
As the global economy has continued its best performance in a generation, Latin America has been doing its part. The region is expected to grow by up to 5% in 2007-8, the sixth year of expansion. In the past four years, GDP per capita has increased by 16%. The continent’s GDP is nearly the same as China’s, although its 550 million population is half that of the Asian giant’s. Its steady growth has seen its share of global GDP growth increase nine percent since 2002 (see Figure 1). Goldilocks is alive and well in Latin America.
Figure 1: Latin America's Steady Role in Driving Global Growth
On the political front, Latin American institutions look stronger than they did just five years ago. Despite headlines trumpeting a new left-wing nationalist wave, in more than a dozen elections in the region over the past year, populist candidates did not sweep into office as had been predicted. While the two main candidates disputed the results of presidential polls in Mexico and corruption scandals shook the campaign in Brazil, both countries – the two biggest economies of the region – emerged with their commitment to democracy strengthened. This favourable environment inspired many participants at the World Economic Forum on Latin America to hail the region’s progress. “We can look at Latin America with a positive perspective,” declared José Miguel Insulza, Secretary-General of the Organization of American States (OAS) in Washington, DC. “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.”
Latin America & Caribbean share of global GDP growth
-2 2000 2001 2002 2003 2004 2005 2006 2007F 2008F
Source: IMF; PricewaterhouseCoopers analysis
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I remain optimistic about what this region
Economies of the region have been improving
the path to grow the economy while providing greater openness for everyone to participate in that prosperity.
about a stable macroeconomic position and combine growth and investment to reduce poverty.
Andronico Luksic Craig, Vice-Chairman, Banco de Chile; Co-Chair of the World Economic Forum on Latin America
José C. Grubisich, Chief Executive Officer, Braskem, Brazil; Co-Chair of the World Economic Forum on Latin America
Yet there were certainly voices in Santiago that warned of the risks that could spoil the “just-right” outlook. The closer economic ties between Latin America and Asia, particularly China, that have been forged in recent years mean that a hard landing of the red-hot Chinese economy could have a major negative impact on the region. A slump in the US could have a similar effect. Because its economies have become better integrated with the international economy, the region has benefited from the spread of global growth but is also more vulnerable. Latin America's commodities-driven growth wave could slow down abruptly. “The business cycle is not dead,” cautioned Felipe Larraín Bascuñán, Professor of Economics, Catholic University of Chile. Expansions do not last forever.
Figure 2: Latin American Energy Imports
Energy supplies are not evenly dispersed across the region
Net imports, 2004 (million tonnes of oil equivalent) Net energy importer (>10 Mtoe) Net energy importer (<10 Mtoe) Net energy exporter (>10 Mtoe) Net energy exporter (<10 Mtoe)
The energy sector in particular presents both rewards and risks. The growth in demand from China and India has in part driven oil prices up, resulting in higher costs for many economies – notably net energy importers (see Figure 2) – but substantial windfalls to petroleum producers such as Venezuela. The rising
There is a broad consensus amongst leaders of government and the private sector about
It is not sufficient to bring growth back to our economies. We should focus on how to bring
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More interregional collaboration and networking would help that.
Beatriz Nofal, Secretary of State; President, Agencia Nacional de Desarrollo de Inversiones (ProsperAr), Argentina
demand for biofuels has been a benefit to those countries such as Brazil that have moved ahead in the development of alternatives to oil (see Figure 3).
Figure 3: Renewable Energy in Latin America
Brazil ranked 12 among 123 nations around the world in terms of renewable energy use
Renewable Energy Index (REI) 7.5–10 5.0–7.5 2.5–5.0 0–2.5 No data
Note: Higher scores indicate higher relative levels of renewable energy consumption in 2001. Source: Maplecroft
But as in fast-growing China, perhaps the biggest risk to Latin American stability and prosperity remains the tensions and stresses that result from the inequalities in the region. While inequality in the region has decreased slightly over the past 17 years (see Figure 4), Goldilocks has to share more of the rich porridge. “There is broad consensus among leaders of government and the private sector about the path to grow the economy while providing greater openness
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Every country needs to find its own way, but we also need to take a look around the world at what works in countries that are successful.
for everyone to participate in that prosperity,” said meeting Co-Chair Andronico Luksic Craig, ViceChairman, Banco de Chile. The Santiago consensus spelled out that essential recipe for sustainability and confronting the challenges of globalization: investment in education, innovation and infrastructure matched with a strong commitment to reform burdensome tax systems and redress environmental misdeeds. “It is not sufficient to bring growth back to our economies,” said José C. Grubisich, Chief Executive Officer, Braskem, Brazil, and Co-Chair of the World Economic Forum on Latin America. “We should focus on how to bring about a stable macroeconomic position and combine growth and investment to reduce poverty.”
The private sector will inevitably have to play a major role in pushing forward the Santiago Consensus. But for the private sector to come to the fore will require the public sector to create the right environment and conditions to allow it. The key is governance. “The issue for Latin America is not the diagnosis but rather it is a problem of action and management,” Luiz Fernando Furlan, Brazil’s former Minister of Development, Industry and Foreign Trade, told participants. A priority for policy-makers is to address the volatility that has typified the economic development of the region, as well as its politics. The main objective of reforms, said Martín P. Redrado, President of the Central Bank of Argentina, must be to
World Economic Forum joins forces with Inter-American Investment Corporation to fight corruption in Latin America
Combating corruption on the continent came under the spotlight at the World Economic Forum on Latin America. In a bid to bolster the fight, the World Economic Forum’s Partnering Against Corruption Initiative (PACI) and the Inter-American Investment Corporation (IIC) signed a Memorandum of Understanding 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. IIC Board Chairman, Luis Alberto Moreno, President of the Inter-American Development Bank, signed the Memorandum of Understanding with World Economic Forum Managing Director, Richard Samans, a Board member of the PACI, on the first day of the World Economic Forum on Latin America. The agreement will lead to the development of a PACI framework and tools tailored for supply chain entities of multinational corporations and particularly for small and medium-sized enterprises. The two parties also intend to raise awareness on the issue in the region and engage many more companies in the active fight against corruption. In addition, the IIC is in the process of revising its internal policies on anti-fraud and corruption, and intends to do so in order to be consistent with the Principles for Countering Bribery developed by PACI. www.weforum.org/paci
ensure that Latin America can weather shocks to its financial system and achieve fiscal order and macroeconomic stability. “This is one of the biggest challenges – how to create permanent public policies that will make all cycles transitory and how to mitigate the volatility that we have suffered in past years.”
Figure 4: Inequality Across the Region Is Down Slightly Since 1990
Countries in which inequality increased
Gini coefficient, 2003/2005
Latin America (weighted ave.) Chile Mexico
faster than average GDP growth slower than average GDP growth
Paraguay Costa Rica
Panama El Salvador
Countries in which inequality decreased
0.40 0.40 0.45 0.50 0.55 0.60 0.65
Gini coefficient, 1990
Source: Economic Commission for Latin America and the Caribbean, World Bank
Latin America’s great fortune is that it is experiencing a sustained period of economic growth. “These good economic results are a starting point for reducing volatility in order to make the region more attractive for investors,” concluded Argentinean State Secretary Beatriz Nofal, President, Agencia Nacional de Desarrollo de Inversiones (ProsperAr). The question is whether the region can move quickly on the priorities outlined in the Santiago Consensus and master globalization rather than succumb to its pressures.
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Changing Perspectives and Priorities in Latin America
world, but the priorities for the region must be innovation, education and institutions.
Felipe Larraín Bascuñán, Professor of Economics, Catholic University of Chile
Ricardo Lagos Escobar, President, Fundación Democracia y Desarrollo, Chile; President of Chile (2000-2006)
It would make a great campaign platform for some ambitious politician: better schools, cleaner air and water, equitable taxes, more public works and advances in science and technology. These themes form the core of the Santiago Consensus, the result of a survey designed for participants during the 2007 edition of the World Economic Forum on Latin America. Coincidentally or not, the list of priorities in large part reflects the region’s most glaring weaknesses according to The Global Competitiveness Report 2006-2007. Latin America ranks near the bottom in such key areas as the quality of institutions and investment in research and development. “There are many challenges in the region in order to improve our competitiveness in the world, but the priorities for the region must be innovation, education and institutions,” said Felipe Larraín Bascuñán of Catholic University of Chile. “The report shows significant deficiencies; what we need to do is find solutions in these three key areas.”
The Washington Consensus emerged in the 1990s as a free market recipe for stability and growth for countries ridden by debt, hyperinflation and worse. The formula included privatization, trade liberalization and fiscal discipline. Most countries of Latin America adopted at least part of the programme, and most improved their macroeconomic numbers significantly as a result. However, the Washington Consensus was not designed to address the region’s other grave problems – such as poverty, inequality and quality of life for the majority of citizens. “Chile has achieved high growth rates but income distribution remains a large problem,” said Ricardo Lagos Escobar, President, Fundación Democracia y Desarrollo, Chile. The Santiago Consensus aims to take up where the Washington Consensus left off. The top priority, education, is addressed in a separate section of this report (see pages 18-20). This essay will outline the thinking that emerged from the meeting on the other key issues.
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Chile has achieved high growth rates but income distribution remains a large problem.
There are many challenges in the region in order to improve our competitiveness in the
Climate change is good business. We can transform this into a business opportunity.
Julio Moura, Chief Executive Officer and Chairman of the Board, GrupoNueva, Chile; Vice-President, World Business Council for Sustainable Development (WBCSD), Switzerland
costs of financing and suffer damage to their reputations.
Karen Poniachik, Minister of Mining of Chile
But in parallel discussions in a session entitled “Business Strategies in Climate Change”, Julio Moura, Chief Executive Officer and Chairman of the Board, GrupoNueva, Chile, and VicePresident, World Business Council for Sustainable Development (WBCSD), Switzerland, noted that, “We can transform this into a business opportunity.” Outlining some of the steps his own company is taking, such as joining the Chicago Climate Exchange and investing in biomass energy, he concluded, “Climate change is good business.” Early evidence includes Brazil’s global leadership on biofuels and the use of the carbon credit mechanism by many companies. Added Olav Skalmeraas, President, Norsk Hydro Brasil, Brazil, whose company has
invested heavily in alternative energy, “I think that Latin America has a great opportunity in this area.” It’s an investment that is already paying off with the region’s share of global carbon emissions already falling (see Figure 1).
Figure 1: Latin America's Carbon Emissions
Regional share of world emissions falling
South and Central America share of world carbon dioxide emissions
4.2 4.1 4.0 3.9 3.8 3.7 3.6 2000 2001 2002 2003 2004
Source: Energy Information Administration
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In a session that focused on the Santiago Consensus, Pamela Cox, Vice-President, Latin America and the Caribbean, World Bank, Washington DC, expressed surprise at the choice of the environment as the number two priority. “Not that it isn’t important, but you wouldn’t expect to see that in a meeting of mostly business people,” she said.
With globalization, companies must modernize in order to compete, and this includes improving performance on the environmental front. Laggards will be penalized by insurance companies, banks and investors that perceive them as risky. This will require hefty investments, but if companies don’t invest they will lose competitiveness, be faced with higher
Panellists of the update session on China's development and challenges
Vitor Hallack, Chairman, Camargo Correa, Brazil, and L. Enrique García, President and Chief Executive Officer, Corporación Andina de Fomento (CAF), Venezuela
Taxes are a more obvious choice. Business people love to gripe about them. But in Latin America, they really do have a point. The informal economy, defined as activity that does not generate tax revenues, accounts for nearly half of GDP in the region. Not only does this put those who play by the rules at a competitive disadvantage, but informality also generates greater income inequality, reduced worker training and lower R&D investments. As half of economic actors escape scot-free, many of the region’s governments lean extra hard on those who do file returns. This problem is particularly acute in Brazil, where the tax load reaches Scandinavian levels of nearly 40% of GDP – without corresponding benefits in public services. Luiz Fernando Furlan, Minister of Development, Industry and Foreign Trade of Brazil (2003-2007), remarked that taxes are a major impediment to growth and productivity. “We have a tax burden which belongs in the first world,” he said. Infrastructure development also ranked high on the list of priorities in the Santiago Consensus. There seemed to be agreement among participants that private investment is fundamental to growth in this area. “When resources are scarce, the public sector should invest only where the private sector is unable or unwilling,” said L. Enrique García, President and Chief Executive Officer, Corporación Andina de
Fomento (CAF), Venezuela. Many participants called upon elected leaders to create a longterm vision for infrastructure development that would include a clear definition of the roles of the public and private sectors. “Companies have stepped up to the extent that governments have allowed them to,” stated Vitor Hallack, Chairman, Camargo Correa, Brazil. “If there were a long-term vision, there would be greater possibilities.” In the latest Global Competitiveness Report, only Brazil and Chile scored respectable grades for efforts to spark innovation. Just 2.5% of R&D spending worldwide takes place in South America. Andrés Velasco, Minister of Finance of Chile, argued that Latin America must break out from the boom-bust commodity price cycle by finding new sources of growth, productivity and stability. “The challenge for us is to grow regardless of the cycles” and the key is innovation, he said. Noted Horst Paulmann, Chairman, Cencosud, Chile, “The success of our companies is due to innovation. Education and training are therefore important.” Some high profile figures notwithstanding, none of the above will come as much of a surprise to Latin American leaders or students of the region. “The issue for Latin America is not the diagnosis but rather one of action and management,” said Furlan. “We know what to do and need to get down to it before we lose momentum.”
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The Santiago Consensus
Percentage of Participants that selected the topic as one of their top 10 priorities
1. Macroeconomic management, fiscal discipline and counter-cyclical responses Balanced budgets and counter-cyclical policy 40% Efficient tax collection and transparency in spending 60% 56% Strengthening of Institutions 2. The role of the state and the private sector More investment in education with a focus on quality 46% Targeted poverty reduction and minimal social safety nets 6% Access to housing through schemes that support demand 56% Coordinated and focus efforts to fight against crime and corruption 25% Investment in and Profesionalization of the Civil Service 3. Financial System 12% Strengthen banking regulation and adherence to international financial 29% Promote greater central bank independence 15% Greater liberalization of cross-border capital transactions 38% Expand for SMEs access to Financial Services 8% Improve creditor rights and credit bureaus 17% Risk mitigation instruments to help SMEs access long-term finance 4. Infrastructure and Energy 19% Greater Regional cooperation on energy 60% Increase Private and Public Investment in Infrastructure Regional infrastructure promotion and dispute resolution 17% 5. Competitiveness Labour and Capital Productivity enhancing reforms 54% Stricter enforcement of Corporate Governance Laws 25% 6. The Labour Market 21% Reducing informality and promoting decent work Increase the Supply of skilled labour A balanced improvement in Flexibility of Labour market 7. Innovation Governments and Business Increase R&D investments 19% More stringent protection of intellectual property 8. International Trade Greater encouragement and promotion of Free Trade 9. Environmental Sustainability Environmental sustainability policies
33% 46% 63%
World Economic Forum on Latin America reaches the “Santiago Consensus”
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 productivity and growth with equity. They include education, the environment, R&D investment, efficient taxes and infrastructure. The so-called Washington Consensus – the set of policy prescriptions promoted in the 1990s to support the restructuring of crisis-hit economies – proved to be a set of necessary albeit insufficient conditions to achieve sound and equitable growth. However, with the region’s countries growing by over 5% on average in the past three years and the incidence of poverty falling below 40%, a new set of common priorities is needed to guide the relevant stakeholders. The Santiago Consensus is thus aimed at taking Latin America to that next level. “The familiar agenda of structural reforms to boost productivity is still essential,” John Lipsky, First Deputy Managing Director, International Monetary Fund (IMF), Washington DC, told meeting participants. He added that it is also important to achieve a measure of macroeconomic stability and to open up markets to trade. Chile is the best example of a country that has combined all three factors to achieve the highest per capita income growth in the region in the past 25 years.
Infrastructure is the key priority, said meeting co-chair José Grubisich, Chief Executive Officer, Braskem, Brazil. If Latin America is to secure its place in the global supply chain, it must invest in upgrading its infrastructure. “If we want to be successful, we need to make it easier to move capital and products to and from the region and inside the region,” he stressed. More generally, the priority has to be to boost investment. “The question is how we may be able to invest more,” said Andrés Velasco, Minister of Finance of Chile. “We have to have good sound projects. And we can agree that a major priority is to reduce the costs of investment.” This means reforming capital markets, ensuring that the banking system is sound, bringing interest rates down, and promoting innovation and venture capital. All of this will then drive new growth. “If we accept the idea that growing means to innovate, then to innovate means to be daring and to do something different,” Velasco said. www.weforum.org/latinamerica
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Understanding the Mindset of Latin American Policy-makers and Business Leaders
Democracy is strong and stable. Stability is what the people require.
Luiz Inacio Lula da Silva, President of Brazil
The first thing you have to do is admit that there’s a problem. Then you can confront it.
The modern political history of Latin America could easily be written as one of regional populism. Sometimes elected, sometimes rising to power by force, strongmen like Getúlio Vargas, Fidel Castro, Augusto Pinochet and Omar Torrijos managed to personalize power and policy-making. Some, like Juan Peron, created legacies of personal “ismos” – as in the term “peronismo,” which describes a movement that survives more than three decades after the Argentinean politician’s death. Populism is of course far from dead, but in recent years a more clear-headed leadership style has begun to emerge and even prosper. Rather than fall back on dogma, the new brand of leader understands that the world is not a simple place and thus eschews simplistic formulae. He or she favours pragmatic yet innovative solutions to those persnickety old problems. Perhaps best exemplified by the bold urban reformers Enrique Peñalosa, former mayor of Bogotá, and Jaime Lerner, former governor of Paraná and exmayor of Cutitiba, this exclusive club includes national figures like Chilean President Michelle Bachelet and her predecessors of the post-Pinochet era. This new way of thinking served as a foundation for the debates during the World Economic Forum on Latin America in Santiago.
Jorge A. Uribe Echavarria, Partner and Director, DeLima Marsh, Colombia; Minister of National Defence of Colombia (2003-05)
For starters, refreshingly, nobody professed to have all the answers. On the contrary. Talking about crime, Eugenio Burzaco, Founder, Fundación Fundar Justicia y Seguridad, Argentina, a Young Global Leader said, “There is no single solution. There must be integrated policies.” Likewise, on education, Jeffrey Puryear, Vice-President, Social Policy, Inter-American Dialogue, USA, remarked, “There are no magical solutions to this problem; it’s more than just buying better technologies – action is needed in a variety of areas.” Also refreshing, in contrast to the infallibility of the strongmen, was the willingness to recognize problems and admit mistakes as part of a process of problem resolution. Addressing the region’s inability to ride the current global economic wave to more investment in infrastructure, Vitor Hallack of Camargo Correa, noted, “It is too bad that we Brazilians and Latin Americans have not capitalized on this opportunity as well as we could have.” Recalling his country’s much touted antidrug campaign, Jorge A. Uribe Echavarría, Partner and Director, DeLima Marsh, Colombia, and Minister of National Defence of Colombia (2003-05), said, “The first thing you have to do is admit that there’s a problem. Then you can confront it.”
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Susan L. Segal, President and Chief Executive Officer, Council of the Americas, in the session entitled "2007 Update: Global Risks and Regional Response Strategies"
In the crucial area of infrastructure development, Chile has taken the lead in developing a new approach. “Since there are clear rules, Chilean and foreign businesspeople are willing to accept risk,” said Ramón Aboítiz, Chairman and Chief Executive Officer, Sigdo Koppers, Chile. Regulations and contract terms have remained firm, agreed Francisca Castro, Concession Coordinator, Ministry of Public Works, Chile. “It is important to have clear rules and that they be respected,” she said. “This explains why Chile has been successful.” But most countries lag behind, leaving the modernization of the state as the key step needed to induce greater investment in infrastructure in Latin America. This would encompass a change in mindset from “government to state”, as some put it, thus ensuring stable rules for investors as politicians come and go. It would also include efforts to combat corruption and improve both public administration and education. “There is a long way to go with modernization of the state,” said Luis E. Frisoni, Senior Partner, South America, PricewaterhouseCoopers, Brazil. “The state has to stick to its core business and do it more efficiently.”
Another area where innovative pragmatists are gaining ground is environmental policy. Under the developmentalist model of the 20th century, “proenvironment” meant “anti-business”. But at the Santiago meeting, forward-looking business leaders broke that philosophical stalemate. “I am convinced as a businessman that global warming is real,” said Julio Moura of GrupoNueva. “In Chile, we could say that our carbon emissions are so small that it doesn’t involve us, that others should take the initiative. But the effects of global warming will not be distributed proportionally. We can mitigate the effects if we act.” Moura didn’t stop there. “Social responsibility is not charity. It is not something you do after you’re profitable,” he said. “Global warming has to be part of the business strategy. It is an issue to be handled by the CEO.” If environmental responsibility is part of the new thinking, corruption is not. The stereotype depicts Latin American societies and cultures as inherently corrupt (see Figure 1 for Transparency International’s Corruption Perception Index for Latin America).
And they must state that publicly, so it will be taken seriously.
John M. Beck, Chairman and Chief Executive Officer, Aecon Group, Canada
[To combat corruption,] companies must make it clear that they have a zero-tolerance policy and that it is part of their core values.
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The workshop on “Securing Latin America’s Energy Future”
Hector Rangel Domene, Chairman, Grupo Financiero BBVA Bancomer, Mexico, in the “Financial Drivers of Growth” session
Conventional wisdom holds that without a bribe, you can’t get a contract. But John M. Beck, Chairman and Chief Executive Officer, Aecon Group, Canada, and Uribe Echavarría tell stories of Zero Tolerance for corruption. And they tell success stories.
Figure 1: Perceptions of Corruption in Latin America
Zero tolerance also works on the government side, noted Uribe Echavarría. “In two years, nobody offered me a single bribe,” he said. To guarantee transparency in one large purchase, he called in business leaders and asked them to monitor the process and report back with any scuttlebutt. The deal went off without a hitch. Hardly flamboyant, innovative pragmatism might seem to be at a disadvantage in marketing terms. But if its champions can deliver the goods, voters may indeed follow – as they have for the last decade in Chile. “We want to grow to be inclusive and be inclusive to grow,” said Chilean President Bachelet.
Corruption Perception Index (CPI) 2006
7.5–10 5.0–7.5 2.5–5.0 0–2.5 No data
Note: Lower scores indicate higher perceptions of corruption
Source: Transparency International
“If our proposal is better, we will get the contract without corruption,” said Beck. “Companies must make it clear that they have a zero-tolerance policy and that it is part of their core values. And they must state that publicly, so it will be taken seriously.”
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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.
Infrastructure Private Investment Attractiveness Index
Rank 1 2 3 4 5 6 7 8 9 10 11 12 Country Chile Brazil Colombia Peru Mexico Uruguay El Salvador Guatemala Argentina Venezuela Bolivia Dominican Republic Score 5.43 4.40 4.33 4.23 4.04 4.02 3.97 3.64 3.41 3.37 3.34 3.33
Julio Estrada, Research Projects Manager for Latin America at the World Economic Forum
Chile, Brazil and Colombia most attractive in Latin America for private investment in infrastructure
The World Economic Forum released a new index at the World Economic Forum on Latin America which measures the attractiveness for private investment in infrastructure in the region. Chile, Brazil, Colombia and Peru ranked at the top of the index with the most attractive environment, while Venezuela, Bolivia and the Dominican Republic came at the bottom of the rankings. 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. Poor infrastructure was identified in the Santiago Consensus, as well as at the World Economic Forum on Latin America in 2006 in São Paulo, as a major obstacle to the region’s ability to compete globally. It was also named as one of the priority areas in which the Forum needs to explore alternatives and catalyse actions to overcome the current shortcomings.
Global Competitiveness Ranking and Infrastructure Private Investment Attractiveness Ranking
1 Brazil 3 Colombia Peru 5 7 Guatemala 9 11 Bolivia 13 13 11 9 7 IIPIA Rank 5 3 1 Venezuela Argentina Dominican Rep. El Salvador Mexico Uruguay Chile
GCI 2006-2007 Rank
Source: World Economic Forum
The study features the Infrastructure Private Investment Attractiveness Index (IPIAI), a customized, methodological tool gauging the institutions, factors and policies making it attractive for private investors to invest in infrastructure projects. An assessment of infrastructure investment opportunities is also performed for each of the countries covered. The study is based on publicly available hard data as well as perception data. In particular, the authors used the results from the World Economic Forum’s Executive Opinion Survey (EOS) and conducted a mini-survey among practitioners and legal experts on government readiness to deal with and manage private investment projects. Data from the Centre d’Etudes Prospectives et d’Informations Internationales (CEPII) and Latinobarómetro were also used. www.weforum.org/infrastructure
Benchmarking National Attractiveness for Private Investment in Latin American Infrastructure
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Achieving Equitable Income Distribution in Latin America
The priority is to take a great leap to ensure quality education for all.
Michelle Bachelet, President of Chile
GDP per capita, 2004 (PPP, US$)
As a means for achieving equitable income distribution across the continent, education loomed as the leading priority among participants in the World Economic Forum on Latin America. The topic popped up in the most unexpected places – even in sessions with titles like “Latin America’s Challenges and the World’s Shifting Power Equation.” In the Santiago Consensus shaped during the meeting, education was identified as the top issue on which the region must focus. President Michelle Bachelet of Chile 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.” Panellists in the session on “Global Risks and Regional Response Strategies” pinpointed the deficiencies and disparities in education as the root of social inequality and thus of political risk. “Political risk and social inequality are one and the same,” said one panellist (see Figure 1). “It will be impossible to cut political risk if large parts of society do not feel included.” Added another, “If we cannot ensure children a better standard of education, we will not just be facing a failed nation but a failed continent.”
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Figure 1: Education and Prosperity in Latin America
Citizens of wealthier economies tend to stay in school longer
Chile Costa Rica Mexico
Colombia Panama Venezuela Suriname Peru
Guyana El Salvador Nicaragua Honduras
0 7 8 9 10 11 12 13 14 15 16
Years of schooling (2004 or most recent)
Source: UN; IMF
Moreover, high-quality education is a necessary precondition for innovation, a regional weakness according to the Forum’s Global Competitiveness Report. “You cannot achieve greater productivity without innovation,” said Andrés Velasco, Minister of Finance of Chile. “There is no magic recipe. In human capital and education, we must move on from quantity to quality.” As the minister inferred, school attendance has improved considerably in most countries in the last 15 years. Some have attained near universal enrolment. In Brazil, for example, 97% of children between the ages of 7 and 14 are on the rolls. And educational budgets are increasing: in Argentina plans to boost spending from 4% to 6% of GDP by 2010 – thus matching the OECD figure of 5.9%. The Brazilian government ranks as the world’s number one purchaser of textbooks.
Education is an issue requiring urgency of action. We need to organize education policy so that it favours the multiplication of effective schools.
There is no magic recipe. In human capital and education, we must move on from quantity to quality.
Andrés Velasco, Minister of Finance of Chile
José Weinstein, Manager, Education, Fundación Chile
Yet despite improved enrolment rates, test figures in reading, math and science show educational performance lags woefully behind the rest of the world (see Figure 2). The Inter-American Dialogue “Report Card on Latin American Education” gave the region a “D,” or poor grade, for its test scores; the state of schools in poor, rural and indigenous communities; national standard setting; and efforts to improve teacher quality. Studies have found that 60% of Latin Americans – and at least half of all Chileans – cannot understand what they read, according to Ernesto Schiefelbein, University Professor, Fundación Oportunidad (Luksic), Chile. In Brazil alone, some 841,000 teachers lack college degrees.
Figure 2: Enrolment Rates Related to Educational Performance
100% United States South Korea
Chile Thailand 80
Latin American countries1
Argentina Indonesia 70 Peru Uruguay
Latest available data: Argentina, Chile, Peru from 2000; other countries from 2003. Average of math, reading, and science scores.
World Bank figures show that the governments of large Latin American countries are not channelling additional funds into improving education (see Figure 3). And since throwing money at the problem is at best an insufficient solution, many of the brainstorming workshops during the meeting – including one devoted exclusively to education – dedicated much time to considering ideas for how to ensure a better learning environment for Latin American students. Among the proposals: • improve the quality of school infrastructure • build higher expectations for educational systems among the general population to improve student motivation and press politicians to act • encourage businesses to help • begin schooling at an early age • get parents to encourage their children to learn • boost teacher wages to attract and retain the best people • use the Internet and cutting-edge technologies • improve the performance evaluation of both students and professors • encourage the private and public sectors to work together to design curricula and address other problems
Net enrolment at age 15
50 300 Low 400 450 450 500 550 600 High
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Commitments rising in Mexico but falling in Argentina
really need to address inequality issues and build in social policies into the region.
Public spending as percentage of GDP
Latin America & Caribbean Chile Argentina
Pamela Cox, Vice-President, Latin America and the Caribbean, World Bank, Washington DC
2% 2000 2001 2002 2003
Source: World Bank, World Development Indicators
José Weinstein, Manager, Education, Fundación Chile, said that there are five elements important to improving the quality of education: a modern, wellorganized and effective implementation of school curricula; high, demanding goals and a system of measurement; an organized, stimulating climate for learning; professionalism and teamwork among teachers; and the strong participation of parents and the general community to assure that schools are well-funded and students are inspired to learn. “This is an issue requiring urgency of action,” he added. “We need to organize education policy so that it favours the multiplication of effective schools.”
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Figure 3: Public Expenditures on Education in Large Latin American Economies
To achieve and sustain higher growth we
COMMITTED TO IMPROVING THE STATE OF THE WORLD
A Global Risk Network Briefing
Latin America@Risk report identifies key risks to the region’s continued rise
The Latin America@Risk report, released at the World Economic Forum on Latin America meeting, emphasizes the strength and robustness of Latin America’s economies, while exploring the key economic, environmental, geopolitical and societal issues that put that progress at risk. While all four of these issues emerge from the broader global risk environment, the regional manifestations present particular challenges for governments, industry and civil society throughout Latin America. “Global risks play out uniquely in Latin America, but also differently across the region, which is incredibly diverse,” notes the Global Risk Network’s Gareth Shepherd, co-author of the report. “But these four issues – social inequality, political instability, economic vulnerability and climate change – are on the radar of all of the region’s strategic thinkers.” The report argues that Latin American economies are much less vulnerable to sudden disruption than they have been in past decades, thanks primarily to improved fiscal positions. But with much incremental growth arising from commodity exports, global risks such as a hard landing of the Chinese economy or rising protectionism from the United States create new challenges for the region. Fiscal discipline and counter-cyclical policies must be strengthened to build the region’s “margin of safety”. Likewise, while democracy and political stability remain at historically high levels across the region, pockets of populist/anti-globalist storm clouds threaten to spread throughout the highly interdependent region. Meanwhile, global climate change presents serious trade-offs for the region – not least between the seizing of opportunities (e.g. aggressive expansion of biofuel production) and the management of life-sustaining resources (e.g. rainforest and freshwater). Perhaps the region’s greatest ongoing concerns are social and economic inequalities – which remain the most significant in the world. Political reform, the encouragement of small and medium enterprises and, crucially, education, remain the region’s best mitigators of inequality-driven populist backlash. www.weforum.org/globalrisks
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China and Latin America
Cheap Chinese merchandise has done as much as Alan Greenspan to keep down inflation in the US.
Ricardo Claro Valdes, Chairman, Compania Sudamericana de Vapores (CSAV), Chile
After the Asia-Pacific Economic Cooperation (APEC) forum summits became annual events on the diplomatic calendar more than a decade ago, visits by Latin American leaders to Asia and Asian leaders to Latin America became more frequent. Yet whenever a Latin president turned up in Beijing or an Asian prime minister headed to São Paulo, the getting together of distant friends seemed more quaint happenstance than a meeting of valued trading partners with strategic mutual interests. But by 2004, when Chinese President Hu Jintao spent two weeks touring Argentina, Brazil and Chile before passing through Cuba, that had changed. Both sides hailed Hu’s trip as a milestone in three decades of Chinese relations with South America. The reason: trade and investment between China and the region had been climbing sharply in recent years – and many South American countries were reaping the benefits of China’s soaring demand for commodities, still the backbone sector of the continent’s economies. In 2005, Latin America was the second largest recipient of Chinese FDI (see Figure 1). And in 2006, trade between China and Latin America rose to US$ 70.2 billion, up from about US$ 10 billion in 2000 (see Figure 2).
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Figure 1: China's Foreign Direct Investment
Investment in Latin America in 2005 was second only to Asia
6% Europe 7% North America 4% Oceania
7% Africa 60% Asia
16% Latin America
Source: Deutsche Bank
At this World Economic Forum on Latin America in Santiago, it was therefore highly appropriate that a number of sessions focused on China and the impact of its zooming growth and widening geopolitical role on Latin America. The region’s trade balance with China has shifted from a deficit to a surplus in less than five years. Participants from both sides of the Pacific stressed that the relationship was no flash in the pan of commodities but rather a match of complements with coinciding interests and a long, mutually beneficial future. “The trade and investment relationship between Latin America and China is a long-term strategic partnership,” said meeting CoChair Zhang Shoulian, President of China Minmetals Non-ferrous Metals.
Figure 2: Latin American Trade Destinations
Although trade with China and within the region are picking up, trade with the US still dominates
Total trade (US$, billions)
15% 3% 5% 14%
Total (CAGR: 9.61%)
It is a wake-up call for Latin America to pursue reforms.
Other (CAGR: 13.57%) Japan (CAGR: 9.59%) China (CAGR: 38.85%) EU (CAGR: 7.80%)
800 600 400
Intra-Latin America (CAGR: 13.01%)
US (CAGR: 6.45%)
Javier Santiso, Chief Economist and Deputy Director, Organisation for Economic Co-operation and Development (OECD), Paris
Source: IMF Direction of World Trade Statistics
But for a real partnership to evolve, China and Latin America will have to develop a more textured relationship, certainly one based on more substance than raw materials trade. Many in Latin America still do not know or understand the China phenomenon. Inasmuch as there is widespread scepticism about globalization among Latin Americans, so is there wariness – even fear – of a rising China. Believers such as meeting Co-Chair Andronico Luksic Craig, Vice-Chairman of Banco de Chile, took the opportunity to rally the doubters. “Let’s dare, take risks, step out,” Luksic urged participants. “We need to understand and shake hands with our friends in China. We need to learn and know China.” At one level, Luksic was exhorting Latin American business to seek out higher-value trade and investment opportunities in China. This dovetailed with the Chilean Finance Minister’s call for a transformation of Latin America’s economies so they are not captive
of the boom-bust price cycles of raw materials. When the commodities party ends, Latin America has to be prepared. Countries must not only exploit the opportunities that China offers but must also prepare themselves to exploit their comparative advantages to compete in the global market against China, India and other emerging economies. This is particularly true for nations in Latin America that are not resource rich and may not be benefiting directly from China’s hunger for raw materials to fuel its 11% annual growth. For countries to boost their competitiveness and come up with the products and services that China and the rest of fast-growing Asia need and will buy, Latin American economies must pursue the key prescriptions of the Santiago Consensus and invest more in education, innovation and infrastructure. Some in Latin America have pointed out that during Hu’s visit in 2004, China had promised to invest in a number of infrastructure projects. While China has been busily financing and building infrastructure across Africa, it has not been as active or munificent
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China and Latin America are two faces of the same coin. China represents an opportunity.
markets. Do we have the leadership capacity to do so? Our real assets are our people.
Ricardo Villela Marino, Chief Executive Officer, Itaú Latin America, Brazil
in Latin America. The region should not sit and wait for the bounty to come its way, but must move quickly to address its competitive shortcomings such as the lack of infrastructure, countered Javier Santiso, Chief Economist and Deputy Director of the Organisation for Economic Co-operation and Development (OECD). “China and Latin America are two faces of the same coin,” he reckoned. “China represents an opportunity. It is a wake-up call for Latin America to pursue reforms.” That is a key proposition of globalization. Globally competitive countries should motivate or even force both partners and rivals to improve themselves and become more productive and efficient. China’s current advantage is its ability to produce quality products at a reasonable price, but its own economic transformation is slowly turning this giant Asian economy into a formidable force in higher-value sectors such as IT services and biotechnology that require innovation, world-class infrastructure and the rule of law to flourish. Latin America must follow suit. Like many Chinese companies that are going global after a period of reform or as a way to force themselves to become more competitive and hence better able to compete at home, Latin American enterprises have to reinvent themselves too. Concluded meeting Co-Chair José C. Grubisich, Chief Executive Officer of Braskem, “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 in a better shape.” That is precisely how the rise of China is driving a powerful positive agenda for Latin America.
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Leadership talent for global growth companies
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, Chief Executive Officer, 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, panellists in a session dedicated to emerging business giants agreed. “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,” Grubisich said. According to Ricardo Villela Marino, Chief Executive Officer, Itaú Latin America, 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.” “Globalization is creating winners and losers,” said JeanPierre Rosso, Chairman, Centre for Global Industries, World Economic Forum. “Some companies are taking advantage of globalization by expanding to a global scale.” Many of these global growth companies either come from emerging economies such as China, India and Brazil or are focusing on those markets. The World Economic Forum will draw together the new business champions at its Inaugural Annual Meeting of the New Champions in Dalian, China, from 6-8 September. www.weforum.org/newchampions
To be a global champion, you need to have the advantage not only at home but in all
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The World Economic Forum wishes to recognize the support of the following companies as Partners or Supporters for the World Economic Forum on Latin America: Strategic Partners Accenture Audi Avaya Cisco HP Kudelski Group McKinsey & Company Manpower Microsoft Corporation Nestlé PricewaterhouseCoopers Volkswagen
Regional Partners Banco Hipotecario Grupo Salinas
Meeting Supporters Corporación Andina de Fomento (CAF) Gerdau Group Sigdo Koppers
Official Carrier Iberia Group
The World Economic Forum additionally acknowledges herewith: The Ministry of Finance of Chile G-50 (Group of Fifty) ICARE
The World Economic Forum also thanks The Coca-Cola Company, PepsiCo and Television Nacional de Chile (TVN) for their support.
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Peter Torreele is Managing Director of the World Economic Forum. Emilio Lozoya is Associate Director, Global Leadership Fellow, Head of Latin America, at the World Economic Forum. The World Economic Forum on Latin America was under his direct responsibility. Julio Estrada is Global Leadership Fellow, Latin America. Jacques Marcovitch is Professor, University of São Paulo, Brazil, and Senior Adviser at the World Economic Forum. Paula Verholen is Community Relations Manager, Latin America. Laura de Wolf is Senior Specialist, Events, and was the meeting coordinator.
Report Writers Alejandro Reyes William Hinchberger Samantha Tonkin, Senior Media Manager at the World Economic Forum, worked with them to produce this report. Editing and Production Kamal Kimaoui, Associate Principal, Production and Design Fabienne Stassen Fleming, Senior Editor
Photographers Jorge Rodríguez Pérez Juan Ernesto Jaeger Campos Juan Francisco Somalo Valor
The World Economic Forum would like to express its appreciation to the summary writers for their work at the World Economic Forum on Latin America. Session summaries are available on our website at: www.weforum.org/latinamerica/summaries2007 The World Economic Forum would like to recognize the support of PricewaterhouseCoopers in compiling data and statistics for this report.
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The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. (www.weforum.org)