LatinFinance - September/October 2015 - 46

IMF/
WORLD
BANK
SPECIAL

As Latin America's middle class grows, the role of global partners and their export
credit agencies is being reshaped, says the governor and chief executive of the
Japanese Bank for International Cooperation. By Sara Rosner

Hiroshi Watanabe

Putting down roots

he Japanese Bank for International Cooperation's dynamic approach to Latin America
reflects the region's stabilizing political regimes and growing economies, trends that are enticing foreign companies and investors to go beyond the occasional transaction to launching
full-scale operations in the region.
Japan's dearth of natural resources provided the basis for its initial relationship with
commodities-laden Latin America, and that dimension still broadly characterizes Japanese
activity in the region. JBIC has participated in loans backing Antofogasta Minerals Antucoya
copper mining project in Chile, Sumitomo subsidiary Minera San Cristobal's zinc, lead and
silver mine expansion in Bolivia and a Petrobras-led consortium's floating production storage
and offloading vessel in Brazil in recent years.
Aside from energy and minerals, as the continent with the greatest amount of arable land
in the world, Latin America will also play an increasingly important role in food production
and export as the global population continues to swell, says Hiroshi Watanabe, governor and
chief executive officer of JBIC.
"We're going to have a global population of nine billion so I think the issue of a shortage
is very clear. Food production is quite an important task, not only for Japan, but for Latin
America countries," Watanabe tells LatinFinance in an exclusive interview.
The political turmoil that characterized many regimes in the region in the middle of the
last century often deterred foreign companies from establishing a solid presence. More
transparent processes surrounding government administration and fiscal policy, reinforced
regulatory frameworks and growth has many Japanese players considering more permanent
positions in Latin America.
"Many countries have established very good regulation and taxation and also legal operation
around bankruptcy. This gives a very good stability for Japanese companies," Watanabe says.
These latest prospectors are also moving toward finished goods and services to serve a
growing consumer demographic in Latin America. Automotive manufacturing, for example,
is one of the latest industries to make a splash across the Pacific.
Watanabe discussed the evolving relationship with LatinFinance recently. What follows is
an edited transcript of the interview.
LF: In terms of trade between Latin America and Japan, what highlights do you see in
challenges, growth and development?
HW: There have been some stages of change. In the very early days, in the '60s, '70s and
'80s, Latin America would be regarded as a source of the energy and minerals to Japan. One
of the big missions for our bank is securing the supply of the energy and minerals to Japan.

46 L ATINFINA NCE.COM - September/October 2015

In that sense, some of the Latin America
countries are very rich in these resources.
We did some financings of those operations
at the time.
At the end of the last century, we were
going toward the model of wider operations. For example, the enhancement of
the modernization of the industry in the
region. Japanese companies, especially
manufacturing companies, have opened
branches in Latin America and they have
grown their operations through those
branches.
This century, we have now the third
stage of development. Not only for Latin
America; JBIC has promoted infrastructure
investment all over the world. We have
done some big financings in Latin America
countries, with some collaboration from
institutions such as the Inter-American
Development Bank and CAF.
We have a very big range of the three different types of operations in Latin America.
I believe, that the importance of the Latin
American and Caribbean countries has
grown and is growing. I think the operation
of Japanese companies in the region is also
going to be enlarged.
LF: What challenges lie ahead for
lenders, investors and companies doing
business in Latin America?
HW: Perhaps the most important thing
is the stability and the predictability of
each hosting country and their policy and
strategy. Frankly speaking, in the 1980s
and '90s, many countries had some kind
of financial difficulties and those are times
when they had this kind of discretionary
change of policy. This caused a burden for

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