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Alan García, President of Peru

A cry for a bold region-wide strategy to increase productivity and enhance regional competitiveness – this was the resounding theme at the mid-year meeting of AACCLA, the umbrella organization of U.S. chambers in Latin America, held in conjunction with the Business Future of the Americas Conference in Lima, Peru, on June 21-23.

Peru’s President Alan García opened the conference, highlighting his country’s commitment to sustainable growth and investment as a means to continuing to improve wellbeing and opportunities for all Peruvians. 

After a 20-year process of establishing democratic principals and free markets as the foundation of growth, business leaders can now invest with confidence in the country’s future, said President García.

He expects Peru to grow at a 6.5% per year in the foreseeable future with foreign investment expected to double over the next five years and exports expected to reach US$90 billion by 2021. In the future, President García envisions the development of an economy of ideas and technology.

The World Bank’s managing director, Juan José Daboub, built on the positive tone set by President García, focusing on Latin America and the Caribbean’s unique opportunity given that the region has weathered the recent economic crisis relatively well and is second only to Asia in the speed of recovery.

Harnessing this opportunity depends on improvements in human capital, infrastructure, technology and savings rates, said Daboub, who finished with a warning to remain vigilant in reducing corruption.

But to really seize the opportunity, Latin America must improve productivity and facilitate trade, which are areas AACCLA has been focused on for several years and which will be critical in defining the region’s competitiveness particularly with regard to Asia.

In the aftermath of last year’s recession, speakers agreed that the region must be cautious regarding the potential damage of populist measures including increased levels of protectionism.

Representing the private sector, Caterpillar chairman and CEO, James Owens, sees great opportunities in Latin America given that emerging economies are expected to grow 6% annually versus 2% in the developed world. In fact, Caterpillar has just set up a regional center in Panama to take advantage of some of these regional opportunities.

The U.S. Chamber’s senior vice-president for international affairs, Myron Brilliant, was also positive about the region’s future. He noted the Chamber’s commitment to helping shape a global environment based on principals of free enterprise, free markets, and free trade – including active support in the U.S. Congress for pending trade agreements with Panama, Colombia and South Korea.

Other panel sessions focused on topics such as customs and trade security, export and investment promotion, productive chains, small and medium-sized businesses, infrastructure and logistics. 

Regarding this last topic, the region’s difficult geography and the perishable nature of many of its exports means that air connectivity is hugely important for development and trade, said Enrique Cueto, CEO of LAN Airlines.

According to Cueto, the greatest barrier to integration is regulatory since different rules and regulations increase the cost of transport and logistics significantly in many countries of the region.

He also warned about potential “environmental taxes” as a result of the carbon footprint generated by long distance air transport required for many of the region’s products.

The U.S. under secretary of commerce for international trade, Frank Sanchez and Honduran Foreign Minister Mario Canahuati echoed the calls for increased regional productivity. Under Secretary Sanchez invited all the participants to the fourth annual Americas Competitiveness Forum to be held in November in Atlanta as a means of moving the ball forward.

Overall, the meeting was a great success. Many countries reaffirmed their commitment to democracy and free markets as a basis for growth, as well as increased productivity and regional integration in order to take advantage of what is broadly perceived as an auspicious time for Latin America and the Caribbean. 

Kathleen C. Barclay is past chair of AACCLA, a past president of AmCham Chile and chair of bUSiness CHILE’s Editorial Committee.