|October 19, 2006|
Latin America Will Survive Globalization And Prosper
|Latin America will survive globalization and prosper, despite competition from India, China, and other emerging economies, so long as business and government work cooperatively to meet this goal. Countries such as Argentina, Brazil, Mexico, and Chile, which have come a long way in stabilizing their economies and enhancing their pro-business environments, will lead the way. There is no reason why Latin America, led by these countries, will not return to its prosperous position on the world stage.|
These were the sentiments expressed at the inaugural Deloitte Global Forum, launched in Buenos Aires, where former President of Brazil, Fernando Henrique Cardoso (1995-2003), shared the stage with the CEO of Deloitte Touche Tohmatsu, William G. Parrett. They discussed Latin America's place in shaping globalization with more than 150 business and government leaders from Latin America.
At the Deloitte Global Forum, Dr. Cardoso claimed Latin America has been through tough times, but the best is yet to come. Dr. Cardoso said, "Creating a powerful Latin American union, maybe something inspired by the European Union, which will allow greater trade and flow of goods and services between countries, would help enormously to generate wealth and economic prosperity for the region."
Mr. Parrett, who is in Argentina for the Deloitte Global Forum, as well as to welcome more than 500 new partners from Deloitte member firms worldwide, said, "It was not that long ago when countries like Argentina and Brazil were leading world economies. Globalization has changed this, but the opportunities to rebound are strong.
"For one, fresh produce and natural resources can help feed and fuel the world's burgeoning economies. Latin America's close proximity and access to end markets is a distinct advantage, in particular being in the same time zone as the U.S.A. Given that almost 500 million people of the world's markets speak Spanish (approximately 8 percent of the world's population), Latin American countries can easily become a greater provider of shared services."
Both Dr. Cardoso and Mr. Parrett referred to the importance of market liberalization as key to securing the benefits of globalization in Latin America. Dr. Cardoso said, "Economic stability is critical to attracting business to the region."
Mr. Parrett also pointed to risk management and corporate governance as two important matters for companies from Latin America, and those from other emerging economies, to consider when competing in international markets.
"Risk management and governance are two areas I see businesses paying a lot of attention to. While Latin American companies are focusing on these, they need to do so at a level equal to, or preferably better than, those in other markets.
"In China, investors see huge long-term returns and are therefore prepared to take the equally high risks. Latin America does not have this luxury. Therefore, companies need to introduce best practices to be successful in the long term," Mr. Parrett said.
The Deloitte CEO suggested that Latin America should not compare itself to India and China, which are growing at an incredibly fast rate. Instead, he said, "Latin America has its own strengths. When countries like Brazil, Chile, Mexico and Argentina build on these, then Latin America will strengthen its position in the global economy." Mr. Parrett said.
The Deloitte Global Forum, a series of focused knowledge-sharing events taking place every quarter, addresses some of the world's most critical issues and provides an arena for the world's public and private sector leaders to engage in discussions about today's most pressing public policy issues.