Latin Finance - September/October 2009 - 79

Parting Shot Parting Shot Towards a Pluri-Polar World by Karim Shariff* Karim Shariff Capital flow between the Middle East and LatAm is more than just a pipe dream. The South-South link is forged and set to get a lot stronger. G hislain de Castelbajac, a French transnational living in Dubai, married to an Indian American with a son aptly named Vasco, understands the new globalization. In the dusty Gulf, Castelbajac is a known trailblazer. He now represents Fanalca – a large family conglomerate based in Colombia, active in the automotive industry, solid waste management, and urban mass transportation – finding strategic partners in the Gulf. In March, Qatar and Cuba launched a $75 million project to create a five-star resort on the Caribbean island, which receives about 2.3 million tourists a year. The gas-rich Gulf state is set to become the first Arab country to invest in Cuba’s booming tourism sector. Qatari Diar, established in December 2004 to support Qatar, has more than 80 projects worldwide worth a total of about $60 billion, but intends to make Cuba one of its principal areas of activity. “We want to send the clear message to the world that Qatar is at Cuba’s side,” booms Ghanim bin Saad Al Saad, CEO of Qatari Diar, which coordinates the country’s real estate development priorities and is a unit of the Qatar Investment Authority (QIA), which managed some $58 billion at the end of 2008, according to the Council on Foreign Relations. The oil-rich Gulf states – Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Oman and Qatar – recognized for geological serendipity, will attract increasing attention over the next few years. They are generating wealth at levels not seen since the 1980s, and have more than tripled GDP since 2002. Although the 2007 boom was driven by high oil prices, the region is no longer solely dependent on crude, but decisively diversifying. Research by Capgemini and Merrill Lynch suggests that Arab investable assets could reach $3.4 trillion by 2012, from $1.7 trillion in 2007. PricewaterhouseCoopers estimates that financial wealth in the Gulf Cooperation Council may reach $4.5 trillion in 2010, with about 40% attributed to individuals and corporates. Meanwhile, the financial crash of 2008 is a major setback for the West, unleashing a brutal recession in the US, Europe, and Japan. The breakdown in the global financial system and resulting weaknesses will accelerate trends that are shifting the world’s center of gravity. The US will have neither the resources nor the credibility to play same the role in global affairs. The boom in South-South relations is not simply a difference in terms of trade and investment among emerging markets, but it also involves a major cognitive shift. The combined economy of some 34 countries in South America as well as the Arab region is worth approximately $5 trillion, which represented 8% of the world economy last year. There are up to 20 million Arabs and descendants of Arabs living in Latin America, most of them in South America. In Brazil alone, there are an estimated 10 million, about eight million Lebanese, more than in Lebanon itself. Brazil is also benefitting from upgrades, commodities and a re-rating of corporate debt. And Brazil now has a direct connection to the Arab world by sea – 130 years after King Pedro II made the journey to the Gulf. By eliminating the need for transshipment in European or Mediterranean ports, the new route will save one week’s worth of travel time and 20% in freight cost. Brazil has seen trade with Arab countries zoom from $8 billion US dollars in 2004 to $20.2 billion in 2008. But this appears low considering their vast human and natural resources. Two-Way Flow Brazilian companies have also aggressively entered the Arab landscape, via partnerships, industrial or commercial plants, and even through franchises. Cases such as Sadia and Perdigão are already well documented. There are also a great number of Brazilian companies in sectors like construction, such as Odebrecht and Andrade Gutierrez. Odebrecht is planning to capitalize on its knowledge of airport construction and establish a strong foothold in the Gulf. It has teamed up with local contractor Al Jaber Grinaker to win a bid for the new runway at Abu Dhabi International Airport – part of a package worth up to $270 million. Elsewhere, Queiroz Galvão this year closed four contracts with the government of Libya, for a total of approximately $500 million. In general, these projects are in the area of September/October 2009 LatinFinance 79

Latin Finance - September/October 2009

Table of Contents for the Digital Edition of Latin Finance - September/October 2009

Latin Finance - September/October 2009
Contents
Investment Banking Survey
Who Said That?
OTPP Investment Strategy
Central Bank Scorecards
Brazil Liability Management
Real Estate Equity Resurrected
Structured Finance Forecasts
Grim Outlook. Reform Required
Banorte Seeks to Grow
Peru Spending Hits a Block
BCP Sees Better Days
Caribbean Investment Report
Sustainable Banking
Legal Services Survey
Parting Shot
Latin Finance - September/October 2009 - Latin Finance - September/October 2009
Latin Finance - September/October 2009 - Cover2
Latin Finance - September/October 2009 - Contents
Latin Finance - September/October 2009 - 2
Latin Finance - September/October 2009 - 3
Latin Finance - September/October 2009 - 4
Latin Finance - September/October 2009 - 5
Latin Finance - September/October 2009 - 6
Latin Finance - September/October 2009 - 7
Latin Finance - September/October 2009 - 8
Latin Finance - September/October 2009 - 9
Latin Finance - September/October 2009 - 10
Latin Finance - September/October 2009 - 11
Latin Finance - September/October 2009 - 12
Latin Finance - September/October 2009 - 13
Latin Finance - September/October 2009 - Investment Banking Survey
Latin Finance - September/October 2009 - Who Said That?
Latin Finance - September/October 2009 - 16
Latin Finance - September/October 2009 - 17
Latin Finance - September/October 2009 - 18
Latin Finance - September/October 2009 - 19
Latin Finance - September/October 2009 - 20
Latin Finance - September/October 2009 - 21
Latin Finance - September/October 2009 - 22
Latin Finance - September/October 2009 - OTPP Investment Strategy
Latin Finance - September/October 2009 - 24
Latin Finance - September/October 2009 - 25
Latin Finance - September/October 2009 - Central Bank Scorecards
Latin Finance - September/October 2009 - 27
Latin Finance - September/October 2009 - 28
Latin Finance - September/October 2009 - Brazil Liability Management
Latin Finance - September/October 2009 - Real Estate Equity Resurrected
Latin Finance - September/October 2009 - 31
Latin Finance - September/October 2009 - 32
Latin Finance - September/October 2009 - 33
Latin Finance - September/October 2009 - 34
Latin Finance - September/October 2009 - 35
Latin Finance - September/October 2009 - 36
Latin Finance - September/October 2009 - Structured Finance Forecasts
Latin Finance - September/October 2009 - 38
Latin Finance - September/October 2009 - Grim Outlook. Reform Required
Latin Finance - September/October 2009 - 40
Latin Finance - September/October 2009 - 41
Latin Finance - September/October 2009 - 42
Latin Finance - September/October 2009 - 43
Latin Finance - September/October 2009 - 44
Latin Finance - September/October 2009 - Banorte Seeks to Grow
Latin Finance - September/October 2009 - Peru Spending Hits a Block
Latin Finance - September/October 2009 - 47
Latin Finance - September/October 2009 - 48
Latin Finance - September/October 2009 - 49
Latin Finance - September/October 2009 - BCP Sees Better Days
Latin Finance - September/October 2009 - 51
Latin Finance - September/October 2009 - 52
Latin Finance - September/October 2009 - 53
Latin Finance - September/October 2009 - 54
Latin Finance - September/October 2009 - Caribbean Investment Report
Latin Finance - September/October 2009 - 56
Latin Finance - September/October 2009 - 57
Latin Finance - September/October 2009 - 58
Latin Finance - September/October 2009 - 59
Latin Finance - September/October 2009 - 60
Latin Finance - September/October 2009 - 61
Latin Finance - September/October 2009 - 62
Latin Finance - September/October 2009 - 63
Latin Finance - September/October 2009 - 64
Latin Finance - September/October 2009 - 65
Latin Finance - September/October 2009 - 66
Latin Finance - September/October 2009 - Sustainable Banking
Latin Finance - September/October 2009 - 68
Latin Finance - September/October 2009 - Legal Services Survey
Latin Finance - September/October 2009 - 70
Latin Finance - September/October 2009 - 71
Latin Finance - September/October 2009 - 72
Latin Finance - September/October 2009 - 73
Latin Finance - September/October 2009 - 74
Latin Finance - September/October 2009 - 75
Latin Finance - September/October 2009 - 76
Latin Finance - September/October 2009 - 77
Latin Finance - September/October 2009 - 78
Latin Finance - September/October 2009 - Parting Shot
Latin Finance - September/October 2009 - 80
Latin Finance - September/October 2009 - Cover3
Latin Finance - September/October 2009 - Cover4
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