Relations between Europe and Latin America are seeing a period of renewed intensity. And Italy is ready to play the leading role for which it is ideally suited as a natural partner for the region in terms of historic traditions, the deeply-rooted presence of Italian immigrants there, the similarities in our values, and our cultural affinities. All of this in a framework of broader relations in which both regions play complementary roles. Latin Americahas resources (water and energy, first and foremost) and investment opportunities. And Europeaims to act as a key player in the global economy by strengthening its capabilities in economic governance, planning and the creation of value in global supply chains.
The complementarity of the European and Latin American economic systems is both an enabling factor and an encouragement to governments to pursue common growth and development goals. It is a challenge that must be grasped, a challenge from which the Italian production system can draw great benefits. Two of the western hemisphere’s main emerging countries, Brazil and Mexico, are members – along with Russia, India, China, Indonesia and Turkey – of the “parallel G7” which, by 2020, will overtake the GDP of the original seven most industrialised countries.
South America is no longer a fragile region, but a continent characterised by high growth rates and extraordinary dynamism. A continent rich in natural resources, whose countries are engaged in infrastructure projects of vast proportions. With the possibility of an Association Agreement between the European Union and Mercosur, the region could become an integral part of the world’s biggest free trade area, with over 750 million consumers.
To tackle and win this challenge, the European Union must necessarily look to Italy.
Italian investment in Latin America has risen in the last ten years from 3% to 16% of total European investment. In 2011, the region absorbed nearly half, in value terms, of our companies’ total global infrastructure contracts. Italy’s biggest groups are present in the energy, including renewables, and high technology sectors. Against this very positive background, small and medium-sized enterprises (SMEs) are well placed to play a part in diversifying economies that still largely depend on the exploitation of natural resources. They can be sure of ample margins for improvement in their positions.
The Italian presence can boast of numerous examples of best practice. 700 Italian factories are operating in Brazil, for example. And in most cases our companies occupy important market positions in high-quality, high technology sectors. The same trend can be seen in Mexico, with 1400 Italian SMEs that in the last ten years have launched numerous initiatives and created true business districts.
Latin America is, therefore, a favoured region for incisive, and effective, diplomacy for growth initiatives. It is a region where success will be achieved not so much by producers who can submit the lowest-cost bids in absolute terms, but by “country systems” whose products represent the best possible combination of added value and intangible elements – first and foremost creativity and innovation.
That is the case with Italy, the second manufacturing power in Europe. Our country can count on an immense market in Latin America, thanks not least to the presence not just of hundreds of thousands of Italians who live and work there and have strong ties with their home country, but of their tens of millions of descendants too. San Paolo, a key city for the continent’s economy and its financial activity, can be considered “the biggest Italian city in the world”. That’s because, of its over 11 million inhabitants, half have at least one Italian ancestor in their family.
Diplomacy for growth in Latin America is moving, and must increasingly move, in two main directions.
The first is direct support for the internationalisation of Italian enterprises interested in South American markets. Support that must be implemented using all the instruments at our disposal, from system-level missions, to country presentations, to help on the ground.
The other direction is political. We are currently in the run-up to a hugely important event, the summit between the European Union and the Community of Latin American and Caribbean States (CELAC) that will be taking place in Santiago on 26 January.
The “Cumbre”, or summit, will bring together 60 Heads of State and Government from both regions. It will be preceded by a business summit designed to promote a precise pathway for economic collaboration between Europe and Latin America based on the model of SMEs, innovation, and “smart cities”. Sectors in which our companies are particularly competitive, especially in the emerging economies, and in which Lombardy region is set to play an increasingly important role.
And it is in Milan that a Seminar on the Latin America-EU Strategic Partnership and the Challenges of Globalisation is taking place today, in the run-up to the Santiago Summit. Attending the Seminar are policy makers and representatives of businesses and institutions from both regions. I am delighted to be taking part, not just in view of the importance of the topics for discussion, but because the Seminar is taking place, most significantly, in a city that is preparing for important events in the field of economic development and models for urban society.
EXPO 2015 will be more than just a global showcase for Italy. It will be a unique opportunity to illustrate Italian excellence at the most advanced frontiers of innovation, in a decisive sector for the future and the development of the planet: food. It is no coincidence that 14 of the 18 Latin American countries have already signed up.
Our cities are the symbol of our ability to plan and design. Milan is the foremost example of that ability, and the natural setting for a Seminar that will help open up new prospects for Italian enterprises in the markets of South America.