Latin Finance - May 2008 - 98

susan segal Pushing for Inclusive Growth by Julio Urdaneta onsensus around macroeconomic models, high commodity prices and the consolidation of democracy have boosted LatAm toward a period of growth and prosperity, making the region more resilient to the current downturn in the global markets, says Susan Segal, president and CEO of the Americas Society and Council of the Americas. Segal, a staunch supporter of the region, points out that this time LatAm is not the one to blame for a global economic crisis. “This is the first financial downturn that I’ve seen that hasn’t been triggered by LatAm,” Segal tells LatinFinance. “We have now a lot of volatility in the financial markets and not much volatility in LatAm,” she says. The current panorama offers a striking contrast to the situation 20 years ago, when LatAm was mired in debt crisis. In those days, “countries and companies had no access to markets, there was no private equity,” she adds. This time around, the region has benefited from lessons learned in the past. Segal cites Brazil, a country where falling inflation has facilitated access to credit. “There’s a consumer boom,” Segal says. The South American giant’s access to capital is underscored by the growth of the Bovespa and its successful IPO. “That opens yet another area of boom,” she says. C Positive momentum in LatAm is the result of lessons learned from the volatile past, says Susan Segal. But spreading the benefits of expansion is key. which is now making investments overseas, she says. That is not to say that the region is without challenges. “One, LatAm has to weather what’s happening internationally successfully,” Segal says. “Two, LatAm has to continue with its commitment to straightening institutions.” There are multitudes of macroeconomic reforms required in many countries, she adds. One critical hurdle, pivotal for the future, has yet to be tackled. “The biggest challenge for every country is social inclusion,” Segal states, “Big changes are needed to have sustained growth.” LF Land of Opportunity LatAm is a land of multiple opportunities, as investors look for strategic investment and private equity opportunity. Members of the Council of the Americas have expressed interest in several sectors, according to Segal, especially energy and mining. Services and technology sectors are also on the radar, especially in the call center industry. “Agricultural technologies, like Brazil, ethanol – there is lots of investment there. There’s investment in real estate and tourism, there are whole companies and hotel chains that are looking at investment in the tourism sector,” she states. Looking ahead, LatAm seems to be on the right track for continued steady expansion. “I’m actually pretty optimistic,” Segal says. “Countries understand now that what is important is that you have sustained growth. It is much more important to have 4%-5% growth every year than 10% one year and 2% another,” she says. LatAm is also perceived as a more global player, as several countries in the region have entered into free trade agreements. “LatAm has really integrated with the rest of the world,” Segal says. Another positive is the growth of the LatAm multinational, 98 LATINFINANCE May 2008

http://www.worldbank.org/careers

Latin Finance - May 2008

Table of Contents for the Digital Edition of Latin Finance - May 2008