Latin America: Argentina & Brazil Past, Present & Future

Latin America 10,000 Km = Nagoya to Paris

One Subcontinent 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 Colonial history People Culture Political regimes Economic structure Soccer skills!

Inner differences…  Colonization schemes  Aborigines, immigrants  Individualism  Cultural values  Political regimes  Economic structure  Soccer skills!

Latin America Today General Scenario Democracy (more than 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: million Area: 8,514,877 km² (5 th ) GDP per capita (PPP): U$ 9,700 Federative Republic: 26 states, 1 FD Lula President: Luiz Inacio Lula da Silva (since 2003) Economic Facts Interest rate: 12 % Gini coefficient (UN): 0.57 HDI: WB Doing Business Rank: 122 nd (113 in 2007) GDP growth: 4.3% in 2007 (4.1% in 2006)

FieldRanking Ease of Doing Business122 Starting a Business122 Dealing with Licenses107 Employing Workers119 Registering Property110 Getting Credit84 Protecting Investors64 Paying Taxes137 Trading Across Borders93 Enforcing Contracts106 Closing a Business131 Pending issues Red Tape harnessing private sector Politicization of regulatory agencies’ and state companies’ Adequate Protection of the Environment Overcome issues Political / Macroeconomic predictability Public Foreign Debt Public Policy to Redistribute Income

Argentina Facts Population: 39.4 million Area: 2,766,890 km² (8 th ) 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: WB Doing Business Rank: 109 (101 in 2007) GDP growth: 9.1% in 2007 (8.2% in 2006)

Pending issues 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