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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 3
Summary: The Power of a Positive Regional Agenda

Page 6
World Trends and Issues

Page 10
Changing Perspectives and Priorities in Latin America

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Understanding the Mindset of Latin American Policy-makers and
Business Leaders

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Achieving Equitable Income Distribution in Latin America

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China and Latin America

Page 26

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.

2 | World Economic Forum on Latin America
Summary: The Power of a Positive
Regional Agenda

More than 400 business, government and civil society environmental responsibility, investment in innovation,
leaders gathered in Santiago for the World Economic the creation of efficient tax systems and public
Forum on Latin America. The recent economic growth spending procedures, and infrastructure development.
that the region has experienced – over 5% on average This winning strategy, concluded Richard Samans,
in the past three years – and its increasing political
Managing Director, Centre for Public-Private
maturity have offered Latin American countries the
Partnerships at the World Economic Forum,
opportunity to pursue real reform at a time when the
risks they face appear manageable. A major challenge represents “a more deliberate and multifaceted effort
is to prepare the continent’s economies to withstand to achieve higher growth and equity”.
the shocks that have previously been their undoing.
“The current benign international economic trend,
This will require creating the conditions to encourage
coupled with the improved regional macroeconomic
new investment and participation by the private sector
situation, offer a very important occasion to carry out
and inspire policies aimed at achieving equitable
the second-generation reforms that were agreed upon
income distribution. In particular, increased investment
as priorities in the Santiago Consensus. It is clearly
in infrastructure, human capital and R&D, as well as
easier to carry out these public policies with the
accelerated institutional reforms, are needed.
support of the private sector and civil society when
the accounts are balanced or even in surplus,” said
“Globalization is creating winners and losers,” said
Emilio Lozoya, Head of Latin America at the World
Jean-Pierre Rosso, Chairman, Centre for Global
Economic Forum. The opportunity offered by the
Industries at the World Economic Forum, referring to
momentum for a positive agenda of action must be
the emergence of dynamic global growth companies.
But that assessment equally applies to countries and
regions. The question is whether Latin America is
The Santiago meeting was organized around five sub-
prepared to take the steps to ensure that its
themes: “World Trends and Issues”, “Changing
economies and its enterprises are ready to compete in
Perspectives and Priorities in Latin America”,
the global economy – and win.
“Understanding the Mindset of Latin American Policy-
makers and Business Leaders”, “Achieving Equitable
Continuing on from work done at last year’s gathering
Income Distribution in Latin America”, and “China and
in São Paulo, participants aimed to demonstrate “the Latin America”.
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,

3 | World Economic Forum on Latin America
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 Changing Perspectives and Priorities in
Latin America
Latin America is experiencing an unprecedented
period of strong economic growth relative to the past The emergence of the Santiago Consensus indicates
20 years and stable political development. Economic how perspectives and priorities are changing in Latin
growth has been bolstered by the region’s growing America. The new priorities for the region are
trade relationship with Asia, particularly China, while education, innovation and institutional reform.
political institutions have been strengthened by a • The only viable path for the region is towards
series of democratic elections across the continent. prosperity with equity. The focus must be on greater
• There remain real risks to Latin America’s prosperity investment and stronger growth as well as on
and stability, including the potential for a hard reducing poverty.
landing in China or an economic slump in the US. • The environment must be a priority for sustainable
As it gets more deeply integrated into the global growth as well as a business opportunity for the
economy, Latin America may also become more region.
vulnerable to shocks from outside the region. • Tax reform and sound public spending are crucial to
• High petroleum prices and volatility in the market stimulating growth and productivity in the region.
present tough challenges to oil-consuming countries • Private investment is fundamental to addressing
and substantial windfalls for energy producers. deficiencies in infrastructure in the continent.
• Such environmental risks as climate change could • Governments must aim to break their economies
be turned into an opportunity rather than remain a out from the boom-bust commodity price cycles
threat to Latin America. that have marked Latin America’s past
• While the private sector must take a greater role in development.
the economy, the government must take efforts to
pursue policy reforms that will ensure that Latin Understanding the Mindset of Latin
American economies can weather the shocks that American Policy-makers and Business
have previously been their undoing. 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.

4 | World Economic Forum on Latin America
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 China and Latin America
demonstrated that a pragmatic strategy can yield
results. The deepening of trade and investment ties between
• Forward-looking Latin American business leaders China and Latin America has turned the two sides
are driving positive changes in environmental policy. from distant friends to strategic partners with a range
• The old image of Latin America as a corrupt society of common interests.
is being refuted by an increasing number of success • For a real partnership to evolve, China and Latin
stories that provide anecdotal evidence that the America will have to develop a more textured
situation is improving. relationship based on more than commodities and
raw materials trading.
Achieving Equitable Income Distribution in • Latin American business must find ways to exploit
Latin America the opportunities offered by China’s economic rise.
Economies in the region must also takes steps to
The top priority of the Santiago Consensus, education boost their comparative advantages to allow them
emerged as the chief means to achieve equitable to compete in a global economy in which China and
income distribution in Latin America. India have become key players.
• Deficiencies and disparities in education are the root • China’s emergence should inspire Latin American
of social inequality and, as a consequence, of economies and companies to pursue critical
political risk. reforms that will strengthen their ability to withstand
• High-quality education is a necessary precondition the pressures of globalization.
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.

5 | World Economic Forum on Latin America
World Trends and Issues

“ I remain optimistic about what this region
can accomplish and I believe that we have
the people, resources and institutions
“ Economies of the region have been improving

and expanding, pulling many people out of
existing now to address the big problems it
Alejandro Jara, Deputy Director-General, World Trade
faces but it is a question of working together.
So an agenda focusing on dialogue and
“ Organization (WTO), Geneva

cooperation is going to be essential.
On the political front, Latin American institutions look
Thomas A. Shannon Jr, Assistant Secretary, Bureau of
stronger than they did just five years ago. Despite
Western Hemisphere Affairs, US Department of State, headlines trumpeting a new left-wing nationalist wave,
Washington DC 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
As the global economy has continued its best candidates disputed the results of presidential polls in
performance in a generation, Latin America has been Mexico and corruption scandals shook the campaign
doing its part. The region is expected to grow by up in Brazil, both countries – the two biggest economies
to 5% in 2007-8, the sixth year of expansion. In the of the region – emerged with their commitment to
past four years, GDP per capita has increased by democracy strengthened.
16%. The continent’s GDP is nearly the same as
China’s, although its 550 million population is half that This favourable environment inspired many
of the Asian giant’s. Its steady growth has seen its participants at the World Economic Forum on Latin
share of global GDP growth increase nine percent America to hail the region’s progress. “We can look at
since 2002 (see Figure 1). Goldilocks is alive and well Latin America with a positive perspective,” declared
in Latin America. José Miguel Insulza, Secretary-General of the
Organization of American States (OAS) in Washington,
DC. “Democracy is working in most territories and the
Figure 1: Latin America's Steady Role in Driving Global Growth
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





2000 2001 2002 2003 2004 2005 2006 2007F 2008F

Source: IMF; PricewaterhouseCoopers analysis

6 | World Economic Forum on Latin America
“ There is a broad consensus amongst leaders
of government and the private sector about
the path to grow the economy while “ “ It is not sufficient to bring growth back to our
economies. We should focus on how to bring

about a stable macroeconomic position and
providing greater openness for everyone to combine growth and investment to reduce
participate in that prosperity. poverty.

Andronico Luksic Craig, Vice-Chairman, Banco de Chile; José C. Grubisich, Chief Executive Officer, Braskem, Brazil;
Co-Chair of the World Economic Forum on Latin America Co-Chair of the World Economic Forum on Latin America

Yet there were certainly voices in Santiago that Figure 2: Latin American Energy Imports
warned of the risks that could spoil the “just-right” Energy supplies are not evenly dispersed across the region
outlook. The closer economic ties between Latin Net imports, 2004
(million tonnes of oil equivalent)
America and Asia, particularly China, that have been Net energy importer (>10 Mtoe)
Net energy importer (<10 Mtoe)
forged in recent years mean that a hard landing of the Net energy exporter (>10 Mtoe)
Net energy exporter (<10 Mtoe)
red-hot Chinese economy could have a major
negative impact on the region. A slump in the US Colombia

could have a similar effect. Because its economies Brazil

have become better integrated with the international
economy, the region has benefited from the spread of Chile

global growth but is also more vulnerable. Latin
America's commodities-driven growth wave could Argentina

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. Source: IEA

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

7 | World Economic Forum on Latin America
“ 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. “
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 for everyone to participate in that prosperity,” said
countries such as Brazil that have moved ahead in the meeting Co-Chair Andronico Luksic Craig, Vice-
development of alternatives to oil (see Figure 3). Chairman, Banco de Chile. The Santiago consensus
spelled out that essential recipe for sustainability and
Figure 3: Renewable Energy in Latin America confronting the challenges of globalization: investment
Brazil ranked 12 among 123 nations around the world in terms of renewable energy use
in education, innovation and infrastructure matched
Renewable Energy Index (REI) with a strong commitment to reform burdensome tax
Mexico systems and redress environmental misdeeds. “It is
No data
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
Chile 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
Note: Higher scores indicate higher relative levels of renewable energy consumption in 2001.
Source: Maplecroft
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
But as in fast-growing China, perhaps the biggest risk issue for Latin America is not the diagnosis but rather
to Latin American stability and prosperity remains the it is a problem of action and management,” Luiz
tensions and stresses that result from the inequalities Fernando Furlan, Brazil’s former Minister of
in the region. While inequality in the region has Development, Industry and Foreign Trade, told
decreased slightly over the past 17 years (see Figure participants. A priority for policy-makers is to address
4), Goldilocks has to share more of the rich porridge. the volatility that has typified the economic
“There is broad consensus among leaders of development of the region, as well as its politics. The
government and the private sector about the path to main objective of reforms, said Martín P. Redrado,
grow the economy while providing greater openness President of the Central Bank of Argentina, must be to

8 | World Economic Forum on Latin America
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
World Economic Forum joins forces with that will make all cycles transitory and how to mitigate
Inter-American Investment Corporation to the volatility that we have suffered in past years.”
fight corruption in Latin America
Figure 4: Inequality Across the Region Is Down Slightly Since 1990
Combating corruption on the continent came under the
spotlight at the World Economic Forum on Latin 0.65

Countries in which inequality increased
America. In a bid to bolster the fight, the World Brazil

Economic Forum’s Partnering Against Corruption Honduras
Gini coefficient, 2003/2005

Initiative (PACI) and the Inter-American Investment 0.55
Latin America (weighted ave.)
Chile faster than average
Corporation (IIC) signed a Memorandum of Argentina
Mexico GDP growth


Understanding aimed at countering corruption and 0.50
El Salvador
slower than average
GDP growth

bribery. The agreement will encourage corporations to Costa Rica

take a “zero-tolerance” stand on corruption and to 0.45 Uruguay

implement effective anti-corruption programmes in the Countries in which inequality decreased

region. The joint activities will concentrate on Latin 0.40 0.45 0.50 0.55 0.60 0.65

Gini coefficient, 1990
America and the Caribbean.
Source: Economic Commission for Latin America and the Caribbean, World Bank

IIC Board Chairman, Luis Alberto Moreno, President of
the Inter-American Development Bank, signed the Latin America’s great fortune is that it is experiencing a
Memorandum of Understanding with World Economic sustained period of economic growth. “These good
Forum Managing Director, Richard Samans, a Board economic results are a starting point for reducing
member of the PACI, on the first day of the World volatility in order to make the region more attractive for
Economic Forum on Latin America. investors,” concluded Argentinean State Secretary
Beatriz Nofal, President, Agencia Nacional de
The agreement will lead to the development of a PACI Desarrollo de Inversiones (ProsperAr). The question is
framework and tools tailored for supply chain entities of whether the region can move quickly on the priorities
multinational corporations and particularly for small and outlined in the Santiago Consensus and master
medium-sized enterprises. The two parties also intend to globalization rather than succumb to its pressures.
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.

9 | World Economic Forum on Latin America
Changing Perspectives and Priorities in
Latin America

“ Chile has achieved high growth rates but
income distribution remains a large problem.

Ricardo Lagos Escobar, President, Fundación
“ There are many challenges in the region in
order to improve our competitiveness in the
world, but the priorities for the region must

Democracia y Desarrollo, Chile; President of Chile be innovation, education and institutions.
Felipe Larraín Bascuñán, Professor of Economics,
Catholic University of Chile

It would make a great campaign platform for The Washington Consensus emerged in the
some ambitious politician: better schools, 1990s as a free market recipe for stability and
cleaner air and water, equitable taxes, more growth for countries ridden by debt,
public works and advances in science and hyperinflation and worse. The formula included
technology. privatization, trade liberalization and fiscal
discipline. Most countries of Latin America
These themes form the core of the Santiago adopted at least part of the programme, and
Consensus, the result of a survey designed for most improved their macroeconomic numbers
participants during the 2007 edition of the World significantly as a result.
Economic Forum on Latin America.
Coincidentally or not, the list of priorities in large However, the Washington Consensus was not
part reflects the region’s most glaring designed to address the region’s other grave
weaknesses according to The Global problems – such as poverty, inequality and
Competitiveness Report 2006-2007. Latin quality of life for the majority of citizens. “Chile
America ranks near the bottom in such key has achieved high growth rates but income
areas as the quality of institutions and distribution remains a large problem,” said
investment in research and development. “There Ricardo Lagos Escobar, President, Fundación
are many challenges in the region in order to Democracia y Desarrollo, Chile.
improve our competitiveness in the world, but
the priorities for the region must be innovation, The Santiago Consensus aims to take up where
education and institutions,” said Felipe Larraín the Washington Consensus left off. The top
Bascuñán of Catholic University of Chile. “The priority, education, is addressed in a separate
report shows significant deficiencies; what we section of this report (see pages 18-20). This
need to do is find solutions in these three key essay will outline the thinking that emerged from
areas.” the meeting on the other key issues.

10 | World Economic Forum on Latin America

“ Climate change is good business. We can
transform this into a business opportunity.

Julio Moura, Chief Executive Officer and Chairman of the
“ With globalization, companies must modernize
in order to compete, and this includes improving
performance on the environmental front.
Board, GrupoNueva, Chile; Vice-President, World Business Laggards will be penalized by insurance
Council for Sustainable Development (WBCSD), Switzerland
companies, banks and investors that perceive
them as risky. This will require hefty
investments, but if companies don’t invest they
In a session that focused on the Santiago will lose competitiveness, be faced with higher
Consensus, Pamela Cox, Vice-President, Latin
America and the Caribbean, World Bank,
costs of financing and suffer damage to their

Washington DC, expressed surprise at the
choice of the environment as the number two
Karen Poniachik, Minister of Mining of Chile
priority. “Not that it isn’t important, but you
wouldn’t expect to see that in a meeting of
mostly business people,” she said. invested heavily in alternative energy, “I think that
Latin America has a great opportunity in this
But in parallel discussions in a session entitled area.” It’s an investment that is already paying off
“Business Strategies in Climate Change”, Julio with the region’s share of global carbon
Moura, Chief Executive Officer and Chairman of emissions already falling (see Figure 1).
the Board, GrupoNueva, Chile, and Vice-
President, World Business Council for
Figure 1: Latin America's Carbon Emissions
Sustainable Development (WBCSD), Switzerland,
noted that, “We can transform this into a Regional share of world emissions falling

business opportunity.” Outlining some of the 4.3%
South and Central America share of

steps his own company is taking, such as joining
world carbon dioxide emissions


the Chicago Climate Exchange and investing in 4.1

biomass energy, he concluded, “Climate change 4.0


is good business.” Early evidence includes 3.8

Brazil’s global leadership on biofuels and the use 3.7

of the carbon credit mechanism by many 3.6
2000 2001 2002 2003 2004

companies. Added Olav Skalmeraas, President,
Norsk Hydro Brasil, Brazil, whose company has Source: Energy Information Administration

11 | World Economic Forum on Latin America
Panellists of the update session on China's development and

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 Fomento (CAF), Venezuela. Many participants
people love to gripe about them. But in Latin called upon elected leaders to create a long-
America, they really do have a point. The term vision for infrastructure development that
informal economy, defined as activity that does would include a clear definition of the roles of the
not generate tax revenues, accounts for nearly public and private sectors. “Companies have
half of GDP in the region. Not only does this put stepped up to the extent that governments have
those who play by the rules at a competitive allowed them to,” stated Vitor Hallack,
disadvantage, but informality also generates Chairman, Camargo Correa, Brazil. “If there were
greater income inequality, reduced worker a long-term vision, there would be greater
training and lower R&D investments. possibilities.”

As half of economic actors escape scot-free, In the latest Global Competitiveness Report, only
many of the region’s governments lean extra Brazil and Chile scored respectable grades for
hard on those who do file returns. This problem efforts to spark innovation. Just 2.5% of R&D
is particularly acute in Brazil, where the tax load spending worldwide takes place in South
reaches Scandinavian levels of nearly 40% of America. Andrés Velasco, Minister of Finance of
GDP – without corresponding benefits in public Chile, argued that Latin America must break out
services. Luiz Fernando Furlan, Minister of from the boom-bust commodity price cycle by
Development, Industry and Foreign Trade of finding new sources of growth, productivity and
Brazil (2003-2007), remarked that taxes are a stability. “The challenge for us is to grow
major impediment to growth and productivity. regardless of the cycles” and the key is
“We have a tax burden which belongs in the first innovation, he said. Noted Horst Paulmann,
world,” he said. Chairman, Cencosud, Chile, “The success of our
companies is due to innovation. Education and
Infrastructure development also ranked high on training are therefore important.”
the list of priorities in the Santiago Consensus.
There seemed to be agreement among Some high profile figures notwithstanding, none
participants that private investment is of the above will come as much of a surprise to
fundamental to growth in this area. “When Latin American leaders or students of the region.
resources are scarce, the public sector should “The issue for Latin America is not the diagnosis
invest only where the private sector is unable or but rather one of action and management,” said
unwilling,” said L. Enrique García, President and Furlan. “We know what to do and need to get
Chief Executive Officer, Corporación Andina de down to it before we lose momentum.”

12 | World Economic Forum on Latin America
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%
Strengthening of Institutions 56%
2. The role of the state and the private sector
More investment in education with a focus on quality 90%
Targeted poverty reduction and minimal social safety nets 46%
Access to housing through schemes that support demand 6%
Coordinated and focus efforts to fight against crime and corruption 56%
Investment in and Profesionalization of the Civil Service 25%
3. Financial System
Strengthen banking regulation and adherence to international financial 12%
Promote greater central bank independence 29%
Greater liberalization of cross-border capital transactions 15%
Expand for SMEs access to Financial Services 38%
Improve creditor rights and credit bureaus 8%
Risk mitigation instruments to help SMEs access long-term finance 17%
4. Infrastructure and Energy
Greater Regional cooperation on energy 19%
Increase Private and Public Investment in Infrastructure 60%
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
Reducing informality and promoting decent work 21%
Increase the Supply of skilled labour 33%
A balanced improvement in Flexibility of Labour market 46%
7. Innovation
Governments and Business Increase R&D investments 63%
More stringent protection of intellectual property 19%
8. International Trade
Greater encouragement and promotion of Free Trade 37%
9. Environmental Sustainability
Environmental sustainability policies 65%

World Economic Forum on Latin America reaches
the “Santiago Consensus”

Participants at the World Economic Forum on Latin America Infrastructure is the key priority, said meeting co-chair José
agreed on five top priorities for the region – an action Grubisich, Chief Executive Officer, Braskem, Brazil. If Latin
programme for achieving and sustaining higher productivity America is to secure its place in the global supply chain, it
and growth with equity. They include education, the must invest in upgrading its infrastructure. “If we want to be
environment, R&D investment, efficient taxes and successful, we need to make it easier to move capital and
infrastructure. products to and from the region and inside the region,” he
The so-called Washington Consensus – the set of policy
prescriptions promoted in the 1990s to support the More generally, the priority has to be to boost investment.
restructuring of crisis-hit economies – proved to be a set of “The question is how we may be able to invest more,” said
necessary albeit insufficient conditions to achieve sound and Andrés Velasco, Minister of Finance of Chile. “We have to
equitable growth. However, with the region’s countries have good sound projects. And we can agree that a major
growing by over 5% on average in the past three years and priority is to reduce the costs of investment.” This means
the incidence of poverty falling below 40%, a new set of reforming capital markets, ensuring that the banking system
common priorities is needed to guide the relevant is sound, bringing interest rates down, and promoting
stakeholders. The Santiago Consensus is thus aimed at innovation and venture capital. All of this will then drive new
taking Latin America to that next level. growth. “If we accept the idea that growing means to
innovate, then to innovate means to be daring and to do
“The familiar agenda of structural reforms to boost something different,” Velasco said.
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.

13 | World Economic Forum on Latin America
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.

Jorge A. Uribe Echavarria, Partner and Director, DeLima
Marsh, Colombia; Minister of National Defence of Colombia
The modern political history of Latin America could (2003-05)
easily be written as one of regional populism.
Sometimes elected, sometimes rising to power by For starters, refreshingly, nobody professed to have all
force, strongmen like Getúlio Vargas, Fidel Castro, the answers. On the contrary. Talking about crime,
Augusto Pinochet and Omar Torrijos managed to Eugenio Burzaco, Founder, Fundación Fundar Justicia
personalize power and policy-making. Some, like Juan y Seguridad, Argentina, a Young Global Leader said,
Peron, created legacies of personal “ismos” – as in “There is no single solution. There must be integrated
the term “peronismo,” which describes a movement policies.” Likewise, on education, Jeffrey Puryear,
that survives more than three decades after the Vice-President, Social Policy, Inter-American Dialogue,
Argentinean politician’s death. USA, remarked, “There are no magical solutions to
this problem; it’s more than just buying better
Populism is of course far from dead, but in recent technologies – action is needed in a variety of areas.”
years a more clear-headed leadership style has begun
to emerge and even prosper. Rather than fall back on Also refreshing, in contrast to the infallibility of the
dogma, the new brand of leader understands that the strongmen, was the willingness to recognize problems
world is not a simple place and thus eschews and admit mistakes as part of a process of problem
simplistic formulae. He or she favours pragmatic yet resolution. Addressing the region’s inability to ride the
innovative solutions to those persnickety old current global economic wave to more investment in
problems. Perhaps best exemplified by the bold urban infrastructure, Vitor Hallack of Camargo Correa, noted,
reformers Enrique Peñalosa, former mayor of Bogotá, “It is too bad that we Brazilians and Latin Americans
and Jaime Lerner, former governor of Paraná and ex- have not capitalized on this opportunity as well as we
mayor of Cutitiba, this exclusive club includes national could have.” Recalling his country’s much touted anti-
figures like Chilean President Michelle Bachelet and drug campaign, Jorge A. Uribe Echavarría, Partner
her predecessors of the post-Pinochet era. and Director, DeLima Marsh, Colombia, and Minister
of National Defence of Colombia (2003-05), said, “The
This new way of thinking served as a foundation for first thing you have to do is admit that there’s a
the debates during the World Economic Forum on problem. Then you can confront it.”
Latin America in Santiago.

14 | World Economic Forum on Latin America
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 Another area where innovative pragmatists are gaining
has taken the lead in developing a new approach. ground is environmental policy. Under the
“Since there are clear rules, Chilean and foreign developmentalist model of the 20th century, “pro-
businesspeople are willing to accept risk,” said Ramón environment” meant “anti-business”. But at the
Aboítiz, Chairman and Chief Executive Officer, Sigdo Santiago meeting, forward-looking business leaders
Koppers, Chile. Regulations and contract terms have broke that philosophical stalemate. “I am convinced as
remained firm, agreed Francisca Castro, Concession a businessman that global warming is real,” said Julio
Coordinator, Ministry of Public Works, Chile. “It is Moura of GrupoNueva. “In Chile, we could say that
important to have clear rules and that they be our carbon emissions are so small that it doesn’t
respected,” she said. “This explains why Chile has involve us, that others should take the initiative. But
been successful.” the effects of global warming will not be distributed
proportionally. We can mitigate the effects if we act.”
But most countries lag behind, leaving the
modernization of the state as the key step needed to Moura didn’t stop there. “Social responsibility is not
induce greater investment in infrastructure in Latin charity. It is not something you do after you’re
America. This would encompass a change in mindset profitable,” he said. “Global warming has to be part of
from “government to state”, as some put it, thus the business strategy. It is an issue to be handled by
ensuring stable rules for investors as politicians come the CEO.”
and go. It would also include efforts to combat
corruption and improve both public administration and If environmental responsibility is part of the new
education. “There is a long way to go with thinking, corruption is not. The stereotype depicts
modernization of the state,” said Luis E. Frisoni, Latin American societies and cultures as inherently
Senior Partner, South America, corrupt (see Figure 1 for Transparency International’s
PricewaterhouseCoopers, Brazil. “The state has to Corruption Perception Index for Latin America).
stick to its core business and do it more efficiently.”

“ [To combat corruption,] 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.

John M. Beck, Chairman and Chief Executive Officer,
Aecon Group, Canada

15 | World Economic Forum on Latin America
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 Zero tolerance also works on the government side,
can’t get a contract. But John M. Beck, Chairman and noted Uribe Echavarría. “In two years, nobody offered
Chief Executive Officer, Aecon Group, Canada, and me a single bribe,” he said. To guarantee transparency
Uribe Echavarría tell stories of Zero Tolerance for in one large purchase, he called in business leaders
corruption. And they tell success stories. and asked them to monitor the process and report
back with any scuttlebutt. The deal went off without a
Figure 1: Perceptions of Corruption in Latin America

Hardly flamboyant, innovative pragmatism might seem
to be at a disadvantage in marketing terms. But if its
Corruption Perception Index (CPI) 2006
champions can deliver the goods, voters may indeed
follow – as they have for the last decade in Chile. “We
Brazil 0–2.5
No data
want to grow to be inclusive and be inclusive to
grow,” said Chilean President Bachelet.

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.”

16 | World Economic Forum on Latin America
“ From an investor’s perspective, the report
provides a customized toolkit for investment
decisions and location choices in Latin
Infrastructure Private Investment Attractiveness Index

Rank Country Score
America while it guides policy-makers in the
1 Chile 5.43
choice of the best policies to foster their 2 Brazil 4.40
national attractiveness for private investment 3 Colombia 4.33

in infrastructure and in prioritizing sectors
and measures. 6 Uruguay 4.02
7 El Salvador 3.97
Julio Estrada, Research Projects Manager for Latin 8 Guatemala 3.64
America at the World Economic Forum 9 Argentina 3.41
10 Venezuela 3.37
11 Bolivia 3.34
12 Dominican Republic 3.33

Chile, Brazil and Colombia most attractive in
Latin America for private investment in

The World Economic Forum released a new index at the The study features the Infrastructure Private Investment
World Economic Forum on Latin America which measures Attractiveness Index (IPIAI), a customized, methodological
the attractiveness for private investment in infrastructure in tool gauging the institutions, factors and policies making it
the region. Chile, Brazil, Colombia and Peru ranked at the attractive for private investors to invest in infrastructure
top of the index with the most attractive environment, while projects. An assessment of infrastructure investment
Venezuela, Bolivia and the Dominican Republic came at the opportunities is also performed for each of the countries
bottom of the rankings. covered.

Covering 12 economies in Latin America and the Caribbean, The study is based on publicly available hard data as well as
the new study assesses the main drivers of private perception data. In particular, the authors used the results
investment in infrastructure projects for ports, airports, roads from the World Economic Forum’s Executive Opinion Survey
and electricity. Poor infrastructure was identified in the (EOS) and conducted a mini-survey among practitioners and
Santiago Consensus, as well as at the World Economic legal experts on government readiness to deal with and
Forum on Latin America in 2006 in São Paulo, as a major manage private investment projects. Data from the Centre
obstacle to the region’s ability to compete globally. It was d’Etudes Prospectives et d’Informations Internationales
also named as one of the priority areas in which the Forum (CEPII) and Latinobarómetro were also used.
needs to explore alternatives and catalyse actions to
overcome the current shortcomings.

Global Competitiveness Ranking and Infrastructure Private Investment Attractiveness Ranking

Brazil Chile
3 Colombia
GCI 2006-2007 Rank

5 Mexico
Uruguay Benchmarking National
7 El Salvador
9 Argentina for Private Investment in
Dominican Rep.
11 Venezuela Latin American Infrastructure

13 11 9 7 5 3 1

Source: World Economic Forum

17 | World Economic Forum on Latin America

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
Figure 1: Education and Prosperity in Latin America

Citizens of wealthier economies tend to stay in school longer


GDP per capita, 2004 (PPP, US$)

Costa Rica
6,000 Colombia
As a means for achieving equitable income distribution Venezuela

across the continent, education loomed as the leading 4,000 Guatemala
El Salvador

priority among participants in the World Economic Nicaragua
Forum on Latin America. The topic popped up in the
most unexpected places – even in sessions with titles 0
7 8 9 10 11 12 13 14 15 16

like “Latin America’s Challenges and the World’s Years of schooling (2004 or most recent)

Shifting Power Equation.” In the Santiago Consensus Source: UN; IMF
shaped during the meeting, education was identified
as the top issue on which the region must focus.
President Michelle Bachelet of Chile told participants Moreover, high-quality education is a necessary
that for her country and other Latin American nations precondition for innovation, a regional weakness
to reach a higher level of growth and productivity, “the according to the Forum’s Global Competitiveness
priority is to take a great leap to ensure quality Report. “You cannot achieve greater productivity
education for all.” without innovation,” said Andrés Velasco, Minister of
Finance of Chile. “There is no magic recipe. In human
Panellists in the session on “Global Risks and capital and education, we must move on from quantity
Regional Response Strategies” pinpointed the to quality.”
deficiencies and disparities in education as the root of
social inequality and thus of political risk. “Political risk As the minister inferred, school attendance has
and social inequality are one and the same,” said one improved considerably in most countries in the last 15
panellist (see Figure 1). “It will be impossible to cut years. Some have attained near universal enrolment.
political risk if large parts of society do not feel In Brazil, for example, 97% of children between the
included.” Added another, “If we cannot ensure ages of 7 and 14 are on the rolls. And educational
children a better standard of education, we will not budgets are increasing: in Argentina plans to boost
just be facing a failed nation but a failed continent.” 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.

18 | World Economic Forum on Latin America
“ Education is an issue requiring urgency of
action. We need to organize education policy
so that it favours the multiplication of
“ “ “
There is no magic recipe. In human capital
and education, we must move on from
quantity to quality.
effective schools.
Andrés Velasco, Minister of Finance of Chile

José Weinstein, Manager, Education, Fundación Chile

Yet despite improved enrolment rates, test figures in World Bank figures show that the governments of
reading, math and science show educational large Latin American countries are not channelling
performance lags woefully behind the rest of the world additional funds into improving education (see Figure
(see Figure 2). The Inter-American Dialogue “Report 3). And since throwing money at the problem is at
Card on Latin American Education” gave the region a best an insufficient solution, many of the brainstorming
“D,” or poor grade, for its test scores; the state of workshops during the meeting – including one
schools in poor, rural and indigenous communities; devoted exclusively to education – dedicated much
national standard setting; and efforts to improve time to considering ideas for how to ensure a better
teacher quality. Studies have found that 60% of Latin learning environment for Latin American students.
Americans – and at least half of all Chileans – cannot Among the proposals:
understand what they read, according to Ernesto • improve the quality of school infrastructure
Schiefelbein, University Professor, Fundación • build higher expectations for educational systems
Oportunidad (Luksic), Chile. In Brazil alone, some among the general population to improve student
841,000 teachers lack college degrees. motivation and press politicians to act
• encourage businesses to help
Figure 2: Enrolment Rates Related to Educational Performance • begin schooling at an early age
100% United States
• get parents to encourage their children to learn
South Korea

• boost teacher wages to attract and retain the best
Net enrolment at age 15

Thailand • use the Internet and cutting-edge technologies
Latin American countries1 • improve the performance evaluation of both
Indonesia Uruguay
Other countries1
students and professors

• encourage the private and public sectors to work

Latest available data: Argentina,
Chile, Peru from 2000; other
countries from 2003.
together to design curricula and address other
Average of math, reading, and
Mexico science scores.
300 400 450 450 500 550 600
Low High

Source: OECD

19 | World Economic Forum on Latin America
Figure 3: Public Expenditures on Education in Large Latin American Economies

Commitments rising in Mexico but falling in Argentina

“ To achieve and sustain higher growth we
really need to address inequality issues and

Public spending as percentage of GDP

Colombia build in social policies into the region.
Latin America & Caribbean
Brazil Chile

Pamela Cox, Vice-President, Latin America and the
Caribbean, World Bank, Washington DC

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, well-
organized 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.”

20 | World Economic Forum on Latin America

Latin America@Risk

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 Likewise, while democracy and political stability remain at
Economic Forum on Latin America meeting, emphasizes the historically high levels across the region, pockets of
strength and robustness of Latin America’s economies, while populist/anti-globalist storm clouds threaten to spread
exploring the key economic, environmental, geopolitical and throughout the highly interdependent region. Meanwhile,
societal issues that put that progress at risk. While all four of global climate change presents serious trade-offs for the
these issues emerge from the broader global risk region – not least between the seizing of opportunities (e.g.
environment, the regional manifestations present particular aggressive expansion of biofuel production) and the
challenges for governments, industry and civil society management of life-sustaining resources (e.g. rainforest and
throughout Latin America. freshwater).

“Global risks play out uniquely in Latin America, but also Perhaps the region’s greatest ongoing concerns are social
differently across the region, which is incredibly diverse,” and economic inequalities – which remain the most
notes the Global Risk Network’s Gareth Shepherd, co-author significant in the world. Political reform, the encouragement
of the report. “But these four issues – social inequality, of small and medium enterprises and, crucially, education,
political instability, economic vulnerability and climate change remain the region’s best mitigators of inequality-driven
– are on the radar of all of the region’s strategic thinkers.” populist backlash.

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”.

21 | World Economic Forum on Latin America
China and Latin America

“ inflation in the US.

Cheap Chinese merchandise has done as
much as Alan Greenspan to keep down
Figure 1: China's Foreign Direct Investment
Investment in Latin America in 2005 was second only to Asia


North America
Ricardo Claro Valdes, Chairman, Compania Sudamericana
de Vapores (CSAV), Chile

After the Asia-Pacific Economic Cooperation (APEC) 16%
Latin America
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 Source: Deutsche Bank

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 At this World Economic Forum on Latin America in
than a meeting of valued trading partners with Santiago, it was therefore highly appropriate that a
strategic mutual interests. But by 2004, when Chinese number of sessions focused on China and the impact
President Hu Jintao spent two weeks touring of its zooming growth and widening geopolitical role
Argentina, Brazil and Chile before passing through on Latin America. The region’s trade balance with
Cuba, that had changed. Both sides hailed Hu’s trip China has shifted from a deficit to a surplus in less
as a milestone in three decades of Chinese relations than five years. Participants from both sides of the
with South America. The reason: trade and investment Pacific stressed that the relationship was no flash in
between China and the region had been climbing the pan of commodities but rather a match of
sharply in recent years – and many South American complements with coinciding interests and a long,
countries were reaping the benefits of China’s soaring mutually beneficial future. “The trade and investment
demand for commodities, still the backbone sector of relationship between Latin America and China is a
the continent’s economies. In 2005, Latin America long-term strategic partnership,” said meeting Co-
was the second largest recipient of Chinese FDI (see Chair Zhang Shoulian, President of China Minmetals
Figure 1). And in 2006, trade between China and Latin Non-ferrous Metals.
America rose to US$ 70.2 billion, up from about US$
10 billion in 2000 (see Figure 2).

22 | World Economic Forum on Latin America
Figure 2: Latin American Trade Destinations
Although trade with China and within the region are picking up, trade with the US still dominates


Total (CAGR: 9.61%)

Other (CAGR: 13.57%)
“ 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
Japan (CAGR: 9.59%)
China (CAGR: 38.85%)
pursue reforms.
Total trade (US$, billions)

800 14% EU (CAGR: 7.80%)

19% Intra-Latin America (CAGR: 13.01%)
Javier Santiso, Chief Economist and Deputy Director,
Organisation for Economic Co-operation and Development
(OECD), Paris
44% US (CAGR: 6.45%)

0 of the boom-bust price cycles of raw materials. When
1999 2005
the commodities party ends, Latin America has to be
Source: IMF Direction of World Trade Statistics 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
But for a real partnership to evolve, China and Latin other emerging economies. This is particularly true for
America will have to develop a more textured nations in Latin America that are not resource rich and
relationship, certainly one based on more substance may not be benefiting directly from China’s hunger for
than raw materials trade. Many in Latin America still raw materials to fuel its 11% annual growth.
do not know or understand the China phenomenon.
Inasmuch as there is widespread scepticism about For countries to boost their competitiveness and
globalization among Latin Americans, so is there come up with the products and services that China
wariness – even fear – of a rising China. Believers and the rest of fast-growing Asia need and will buy,
such as meeting Co-Chair Andronico Luksic Craig, Latin American economies must pursue the key
Vice-Chairman of Banco de Chile, took the prescriptions of the Santiago Consensus and invest
opportunity to rally the doubters. “Let’s dare, take more in education, innovation and infrastructure.
risks, step out,” Luksic urged participants. “We need Some in Latin America have pointed out that during
to understand and shake hands with our friends in Hu’s visit in 2004, China had promised to invest in a
China. We need to learn and know China.” number of infrastructure projects. While China has
been busily financing and building infrastructure
At one level, Luksic was exhorting Latin American across Africa, it has not been as active or munificent
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

23 | World Economic Forum on Latin America
“ 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.

Ricardo Villela Marino, Chief Executive Officer, Itaú Latin
America, Brazil

in Latin America. The region should not sit and wait Leadership talent for global growth
for the bounty to come its way, but must move quickly companies
to address its competitive shortcomings such as the
To take on the world, high-growth companies need to
lack of infrastructure, countered Javier Santiso, Chief
have the human resources to compete internationally.
Economist and Deputy Director of the Organisation for
Latin America’s skilled executives have become a major
Economic Co-operation and Development (OECD).
competitive advantage for global growth, said José
“China and Latin America are two faces of the same
Grubisich, Chief Executive Officer, Braskem, Brazil, and
coin,” he reckoned. “China represents an opportunity.
Co-Chair of the World Economic Forum on Latin
It is a wake-up call for Latin America to pursue
America. Business leaders in emerging economies are
reshaping industrial sectors and creating new dynamics
in the global competitive landscape, panellists in a
That is a key proposition of globalization. Globally
session dedicated to emerging business giants agreed.
competitive countries should motivate or even force
both partners and rivals to improve themselves and “We have been successful in building a group of
become more productive and efficient. China’s current executives who are exposed to the international market.
advantage is its ability to produce quality products at One advantage is that they have been exposed to
a reasonable price, but its own economic volatile markets of high complexity, very big interference
transformation is slowly turning this giant Asian from government, and inflation. This has created a group
economy into a formidable force in higher-value of people ready to move into the international arena with
sectors such as IT services and biotechnology that good multicultural experience ready to foster growth in
require innovation, world-class infrastructure and the their companies,” Grubisich said.
rule of law to flourish. Latin America must follow suit.
Like many Chinese companies that are going global According to Ricardo Villela Marino, Chief Executive
after a period of reform or as a way to force Officer, Itaú Latin America, Brazil: “To be a global
themselves to become more competitive and hence champion, you need to have the advantage not only at
better able to compete at home, Latin American home but in all markets. Do we have the leadership
enterprises have to reinvent themselves too. capacity to do so? Our real assets are our people.”
Concluded meeting Co-Chair José C. Grubisich, Chief
“Globalization is creating winners and losers,” said Jean-
Executive Officer of Braskem, “Global companies are
Pierre Rosso, Chairman, Centre for Global Industries,
looking to India and China which gives our local
World Economic Forum. “Some companies are taking
companies the opportunity to restructure and to
advantage of globalization by expanding to a global
prepare a strong platform to move into the
scale.” Many of these global growth companies either
international market in a better shape.” That is
come from emerging economies such as China, India
precisely how the rise of China is driving a powerful
and Brazil or are focusing on those markets.
positive agenda for Latin America.
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
24 | World Economic Forum on Latin America
25 | World Economic Forum on Latin America

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

Kudelski Group
McKinsey & Company
Microsoft Corporation

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)

The World Economic Forum also thanks The Coca-Cola Company, PepsiCo and Television Nacional de Chile
(TVN) for their support.

26 | World Economic Forum on Latin America

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

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

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:

The World Economic Forum would like to recognize the support of PricewaterhouseCoopers in compiling
data and statistics for this report.

27 | World Economic Forum on Latin America
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.