MEXICO - Economy
Senior Director, Head of Latin America, World Economic Forum
Marisol Argueta de Barillas attended Oxford University, and later continued her studies at New York University and Harvard University in a variety of fields, including Diplomatic Studies, Humanitarian Law, and Conflict Resolution, and Development. Her previous positions include Vice-President of Interpublix, Minister of Foreign Relations for El Salvador, and Alternate Representative of El Salvador to the UN, as well as a number of other public and academic positions. She is currently Senior Director, Head of Latin America at the World Economic Forum.
Mexico has the second largest economy in Latin American and has acquired more prominence in global affairs as Chair of the G20 in 2012. The context of Mexico’s Chair of the G20 and hosting the G20 summit, together with Brazil hosting the UN Conference on Sustainable Development (Rio+ 20), have been unprecedented opportunities for Latin America to take on a leading role in global issues. Despite the current international economic context, Mexico has proven to have a dynamic and resilient economy and has continued to receive significant flows of FDI in diverse sectors. A similar positive economic trend has been experienced by some other Latin American economies. Both regional conditions and positive trends, together with the region’s stance in the international scene, have put Latin America in a relevant position in 2012.
It was extremely successful. We convened more than 850 leaders from business, government, international organizations, academia, and civil society from over 70 countries, setting a record for the number of participants and in their diversity for a regional meeting on Latin America. There was also a positive response acknowledging the relevance of Mexico and Latin America in world affairs, since the meeting was an important milestone in the process leading up toward the G20 summit at Los Cabos. The key priorities for the Mexican presidency of the G20 were mapped by the Mexican government, and the World Economic Forum contributed to this with the creation of multi-stakeholder task forces on the eight priorities outlined by the B20, including green growth, food security, transparency, trade and investment, innovation and ICT, financing for development, and the creation of an advocacy group that will ensure continuation between one G20 presidency and the next.
While the dynamism and financial resilience of Latin American economies have been acknowledged, a broad consensus about the importance of introducing more innovation in Latin America was clear, as well as other challenges—such as the need to increase productivity, modernize infrastructure, simplify governmental procedures, and promote wider hemispheric integration—and obstacles preventing Latin America from reaching its full potential. Other acknowledged priorities are the need for improved education and training, together with public security issues and the need to strengthen institutions and ensure a firm rule of law to offer both legal and physical stability in the long term. Creative policies must be implemented to foster a path toward societal growth while building on the wealth of human capital in Latin America.
Latin America has achieved its lowest levels of poverty in 20 years and has implemented innovative programs to boost the middle class. There are lessons to be learned from Latin America that can be shared with other regions facing a transformation process; much is also to be learned from the fast development of other regions, particularly from some Asian nations. Now that there is uncertainty in the developed world, more importance is attached to the emerging economies. Latin America presents an interesting array of opportunities for investment. With the sustained levels of economic growth achieved in most of the region’s economies, it should be a timely opportunity to bridge the inequality gap through prioritizing in the social fields. In the near future, we would like to focus in sharing best practices, transferring technology and innovation applied to social programs, and promoting new financing models, for example, through public-private partnerships (PPPs) dedicated to attaining social goals. This is the time when sustained growth demands investment in human capital.
While there are improvements in closing the gender gap on education, women still lag behind men in terms of labor force participation, representation in leadership positions, and in terms of wages. Under the leadership of Margarita Zavala, First Lady of Mexico, Angelica Fuentes, CEO of Omnilife, and Carlos Danel, Co-Founder of Compartamos, the World Economic Forum launched in Ouerto Vallarta the Mexico Gender Parity Task Force, an initiative that aims to close the economic gender gap in Mexico by 10% in the next three years. This is a very relevant initiative, considering that more than half of Mexico’s population is female. There is a general acknowledgement of the need to support women to become more active players in the country’s economy. The task force initiative involves the identification of leaders committed to the cause, implementation, and collaborative learning that we can gather within the country and a reporting of results. We believe that an important way to support women in business is through mentoring and coaching as well as through the inclusion of more women on corporate boards.
I am sure that PPPs will be an important catalyst for the economy. However, it will not only be significant for large infrastructure, energy and connectivity projects as traditionally conceived, but also for other less evident areas such as healthcare and education. I believe there is significant opportunity to work through PPPs to achieve social agenda goals. A great example of this is the “Mesoamerican Health Initiative” launched in the Forum’s meeting in Puerto Vallarta—it has brought together the Bill and Melinda Gates Foundation, the Carlos Slim Health Institute, the IADB, and the Government of Spain as donors to contribute to maternal and child health in Central America and the southern states of Mexico. These are more than just simple donations; contributions made by private actors are complemented by public funds, incentives are created, and a careful monitoring system for the effective and transparent administration of these combined resources is put in place. These new financing models should be fostered throughout Latin America.
Mexico has been a leading country in the area of sustainable development. I think it is very important to acknowledge the public policy decisions that have been made in this area. Mexico has already introduced a transversal approach toward climate change. This is one of the first countries in the world that has applied such a policy on this matter. This program was launched a few years back and it will continue to be developed. Mexico has also committed to reduce its emissions by 30% by 2020. This is a very ambitious target. The country has passed comprehensive climate change legislation and I understand that there was only one international precedent to this, which was a law enacted by the UK. Now, Mexico has also envisioned specific targets and uses some instruments to promote adaptation. There has also been a cultural change whereby members of society have begun to understand the importance of sustainable development.
We would like to urge the region to look at the common challenges and opportunities so that Latin America may, in a more integrated way, strengthen its capacity to be a strong player in the global economy. The stimulus packages in developed economies will drive these in a positive path, but a level of uncertainty at the global level seems to remain in the short term. Financial institutions continue to give positive projections for Latin America in terms of economic growth and continued inflows of FDI in most of the countries. Adequate fiscal and monetary policies are needed to maintain the path of growth, while increasing productivity and competitiveness and managing inflation. Countries with positive levels of growth have the opportunity to develop financial instruments that enable them to invest in long-term goals to ensure that growth translates into sustained development. This could be the Latin American decade. It is up to Latin Americans to take the bull by the horns.
© The Business Year – October 2012
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