Marisol Argueta de Barillas, senior director and head of Latin America for the World Economic Forum, tells Latin Trade why this will be Latin America’s decade.
Latin Trade: What are the key factors that can make this “Latin America’s decade”?
Argueta: Latin America is home to over 600 million people with a very positive demographic bonus, a growing middle class and, due to significant efforts to reduce poverty, 40 million people have … benefited from targeted government programs and better jobs. Our region is growing in global strategic importance while remaining a region of diverse opportunities and challenges. Most of the countries in the region now have reliable political and economic frameworks that include democracy and responsible macroeconomic, monetary and fiscal policies. Economic growth has been sustained in the past decade, with more than a 6 percent average economic growth in 2010 and a projected 4 percent-plus for this year. The region’s economic stability and resilience were proven by the positive performance in resisting the effects of the recent economic crisis.
Moreover, Latin America has 15 percent of the world’s oil reserves, large stocks of minerals, a quarter of its arable land and a third of its fresh water — all these vast resources of strategic and vital importance offer the opportunity for Latin America to develop its potential to become the world’s provider of food, energy and water.
Latin Trade: What are the key threats to this becoming “Latin America’s decade”?
Argueta: Despite the considerable similarities, the region encompasses countries with very different characteristics, and the opportunities offered by this decade will be seized only by those countries that are prepared and committed to make the necessary strategic adjustments. Despite the significant success of poverty-alleviation programs, inequality still remains in general [and is] an obstacle for development and integral social progress. However, the most important current short-term challenges faced by most of the countries in the region are related to insecurity, drug trafficking and organized crime. Longer-term objectives should also be adequately addressed; these include the improvement in the quality of education and technical training, the enhancement of its competitiveness and productivity through the introduction of innovative technology and the modernization of infrastructure. Overall, Latin America would stand a better chance of success if a pragmatic regional integration process was effectively implemented.
Why was Brazil chosen for this year’s World Economic Forum Latin America?
Argueta: Brazil is not only the largest Latin American economy, but its political stability, together with the economic and social achievements of the past decade and the promising outlook under the leadership of the first woman president, Dilma Rousseff, offers an outstanding array of opportunities. Brazil has overcome the economic crisis in part because of its diversified economy and trade, and responsible fiscal and monetary policies allowed it to take countercyclical measures. Markets perceive the risk of investing in Brazil as lower than that of many developed economies, and incentives to encourage more investment in longer-term instruments are being provided in order to manage the abundant flows of incoming capital while tightening financial and monetary conditions and keeping an eye on the inflation rate. While concerns are rising regarding the price-index increase, the inflation target regime includes a floating exchange rate, accumulation of foreign reserves and well-adjusted public finances. The strategic international positioning that Brazil has managed to attain through an active leadership and an effective foreign policy has placed the country at the center of global interest. Brazilian businesses [are] taking leading regional and global roles, and the capacity of Brazil to host the World Cup in 2014 and Rio de Janeiro the Olympics two years later will further enhance Brazil’s already positive image.
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