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Latin America:
Argentina & Brazil
Past, Present & Future
Latin America
10,000 Km
=
Nagoya to
Paris
One Subcontinent
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562 million people
20 Countries
U$ 3.3 trillion GDP
Spanish, Portuguese, French
languages
Resource rich (oil, land, water,
minerals)
Under colonial rule from XVI to XIX
century
Indians, Europeans, Africans, Asians
(Chinese and Japanese)
Brazil & Peru: largest nikkei
communities in the world
Differences
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Colonial history
People
Culture
Political regimes
Economic structure
Soccer skills!
Latin America Today
General Scenario
• Democracy (more than 10-20 years)
• Market economies (except socialism oriented Cuba & Venezuela)
• (Post Import Substitution) trade openness
Economy
• Steady growth (4.55% in 2006, 4.23% in 2007)
• Inflation under control (4.2% in 2006,but 14.1% in 2007)
• (Official) Unemployment still high (9.1% in 2004)
• Exports (main partners: US, China, Europe)
– Industrial components (e.g. Mexico, Brazil)
– Commodities (e.g. Chile, Argentina)
Brazil
Facts
• Population: 189.3 million
• Area: 8,514,877 km² (5th)
• GDP per capita (PPP): U$ 9,700
• Federative Republic: 26 states, 1 FD
• President: Luiz Inacio Lula da Silva (since 2003)
Economic Facts
• Interest rate: 12 %
• Gini coefficient (UN): 0.57
• HDI: 0.800
• WB Doing Business Rank: 122nd (113 in 2007)
• GDP growth: 4.3% in 2007 (4.1% in 2006)
Pending issues
• Red Tape harnessing private sector
• Politicization of regulatory agencies’ and state companies’
• Adequate Protection of the Environment
Overcome issues
Field
Ranking
Ease of Doing Business
122
Starting a Business
122
Dealing with Licenses
• Political / Macroeconomic
predictability
Employing Workers
• Public Foreign Debt Registering Property
• Public Policy to Redistribute
Income
Getting Credit
107
119
110
84
Protecting Investors
64
Paying Taxes
137
Trading Across Borders
93
Enforcing Contracts
106
Closing a Business
131
Argentina
Facts
• Population: 39.4 million
• Area: 2,766,890 km² (8th)
• GDP per capita (PPP): U$ 13,307
• Federative Republic: 24 provinces
• President: Cristina Fernández de Kirchner (since 2007)
Economic Facts
• Interest rate: 11.1 %
• Gini coefficient (UN): 0.49
• HDI: 0.869
• WB Doing Business Rank: 109 (101 in 2007)
• GDP growth: 9.1% in 2007 (8.2% in 2006)
Pending issues
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Predictability and coherent policies
Inflation ghost
Growing inequality + growing insecurity
Corruption + Regulatory burden
Overcome issues
• Political past
• Debt restructuring (still some not paid debt)
• Environment as political objective
Challenges
• Stark income inequality
• Heritages of protectionist, state-led
industrialization
• Poor quality, lacking infrastructure
• Poor industry regulation
• Rigid, heavily charged labor market
LA challenges and our hopes