Latin Finance - September/October 2010 - 49

nina shapiro

Passion for EM
by James Crombie

fter more than 30 years at the World Bank, the IFC’s no-nonsense treasurer Nina Shapiro is still brim full of good ideas. Beloved by colleagues as much for an impressive list of achievement as for her sharp intellect and sense of humor, Shapiro sounds impatient to do more. “Infrastructure isn’t really one investment. It involves two investments with very different risk factors, investors, and timeframes,” says Shapiro, seizing on one of her many fixations. “After the construction phase, infrastructure can function more long-term like a utility, and could appeal to the longer term institutional investors,” she adds. According to Shapiro, collaboration with the government is necessary in the first construction stage, to ensure clear and stable regulations. The private sector needs to take enough of a risk to ensure it gets return, but the state can ensure the investment happens by helping it through the initial phase. “There needs to be some creative thinking about takeouts and how it can be restructured once projects are up and running,” she adds. Many of Shapiro’s significant achievements are in local markets, where the IFC has tried to spur depth and sophistication. “These markets need longer fixed term and their accompanying instruments that really allow markets to function in a very proactive way, including hedging,” says the banker. “There has to be a regulatory and government focus that deliberately promotes organic growth and the interests of long-term investors. This has happened in several countries like Chile, Peru, Colombia, Mexico and increasingly in Brazil,” says Shapiro. She adds that Brazil has a chance to

The IFC’s popular treasurer is forced by internal rules to step down. But the irrepressible Nina Shapiro has no intention of quitting emerging markets.
somewhat circumscribed the market’s long maturity growth,” she says. “As the market grows, hopefully it will create a balance because BNDES can only do so much,” Shapiro adds. Shapiro likewise has praise and criticism for Mexico, which boosted capital markets by creating institutional investor long-term demand through pension reform, as well as adding inflation-linked products. However, it still needs participation by more players, which requires good settlement and clearing systems, as well as transparency of pricing and investor protection mechanisms. And contrary to leftist conspiracy theories that claim the Washington-based multilaterals are effectively foreign policy tools of the US government, Shapiro says the finance team has been able to set its EM interesting and challenging: Shapiro own priorities, as well as try new initiatives. Her only regret is that all of her plans were not enacted faster. promote the bond market more through “It’s been painstaking and time tax rationalization. “This encouraged consuming, and there have been some FDI on the equity side and could work for places where the governments were less bonds as well.” interested, and the effort would not have She notes a revival in securitization in Brazil, and says the IFC is working on some been at all efficient,” she adds, declining to name names. deals there. However, the biggest LatAm Even if the IFC deems her too old to economy is far from perfect. work, Shapiro shows no signs of slowing. “There’s been great progress but still “I’ve no interest in retirement. I’m now some regulations need to be clearer, talking to various people in the market to and some government processes are still determine what is a good fit for what to do onerous. The development of a fixed-rate next,” she states. “The emerging markets longer term market is critical, and that is have been my career, including investments yet to happen,” says Shapiro. Like many in the market, Shapiro notes and capital markets, and I want to stay involved. I find it both very interesting and the potentially damaging impact of too challenging.” LF much reliance on the BNDES. “This has

September/October 2010

LatinFinance 49

Latin Finance - September/October 2010

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