(fa fede solo il discorso effettivamente pronunciato)
Mr. Alfredo Moreno, Minister of Foreign Affairs of the Republic of Chile
Mr. Antonio Tajani, Vice-President of the European Commission
Mrs Benita Ferrero Waldner, President of the EU-LAC Foundation
Mrs Alicia Barcena, Executive Secretary of CEPAL
Ladies and Gentlemen!
First of all, let me express my appreciation for the kind invitation to take part in this seminar on ‘’Investments for economic growth, social inclusion and environmental sustainability’’, a title which encompasses some of the main issues on the agenda of the oncoming UE-CELAC Summit of Heads of State and Governments scheduled in this same venue on the 26th and 27th of January 2013. Let me also congratulate the Economic Commission for Latin America and the Caribbean (Cepal), the European Union, the Ministry of Foreign Affairs of Chile and the EU-.LAC Foundation on this useful initiative, that will allow us to exchange ideas and perceptions in preparation of this important event.
As we meet, the global economic outlook is still fraught with uncertainty. High unemployment rates in the Western world, tensions in the financial markets, volatility in commodity prices and the expected new drop of global trade in 2012 conjure to create a business climate that is far from ideal, affecting even those emerging countries that had – to a large extent – been spared by the general turmoil. In the global market, “decoupling” proved to be only a temporary illusion.
Europe and Latin America, however, face this contingency from two very different standpoints. Europe is coping with the deepest and worst crisis in its recent history; Latin America, on the other hand, has learnt a hard lesson from the “lost decade” of the early Eighties and has since introduced sensible reforms that have resulted in structural changes, thus enjoying robust and sustainable growth. In 2010 it achieved rates of 5%, well above the average of OECD countries, below 2%. According to the latest CEPAL data, the region’s GDP will expand at only marginally lower rates in 2011 and 2012.
For Europe, therefore, the main challenge is to reform its system of governance, in order to recover its capacity to grow and to generate jobs, while for Latin America the test is to keep the momentum and consolidate the results achieved so far, in order not to miss the historic opportunity to eradicate poverty and reduce social exclusion.
As the Italian Prime Minister, Mario Monti, stated last week in his address to the General Assembly of the United Nations, we cannot overlook the importance of the measures being taken at the EU level to strengthen governance and fiscal integration. It is now crucial to deliver on the several policy commitments that have been made, both at EU and national level, but I have no doubt that Europe will live up to expectations. After all, other crises have threatened the European project in the past, but each time we have found the way to make the Union stronger than before. Italy, for sure, will do its part.
This is important, because a viable Europe is essential to tackling global economic and security challenges. And in spite of its current troubles, Europe is a major economic player and the most successful case of regional integration.
Its outward projection can easily be traced in Latin America, where Europe remains the major provider of direct investments. Not only Latin America and the Caribbean countries continue to attract European investment, but a significant share of these investments is concentrated in manufacturing and high tech-sectors. I wish to underline this point, because it shows that European companies contribute substantially to the creation of quality jobs in this part of the world.
Italy has itself considerably increased the volume of its direct investment, which amounts today to 16 per cent of the whole volume of European investment flows to Latin America (it was just 3 per cent in 1999). Italian companies are keen to expand their presence and focus their attention in a variety of sectors that are important to the development of the region. The first that comes to mind is infrastructure. Shortcomings in infrastructure are responsible for the high costs of manufacturing: according to the Inter-American Development Bank, logistics costs in Latin America range from 18% to 34% of the value of traded goods, compared to an average of 9% in the OECD. As we speak, a delegation of the Italian National Association of Construction Companies is here in Santiago, to discuss investment opportunities. Almost 25% of the business of Italian engineering and construction companies is in Latin America.
Renewable energy is another key sector. Latin America is blessed with exceptional natural resources and a huge potential for renewable energy production. The Italian utility company, ENEL, is developing new green projects in Ecuador, in Brazil, Mexico, Chile and in other Latin American countries. The transfer of green technology has considerable socioeconomic effects, because it changes the way we consume and produce energy and the way we relate to the environment. Hence, we fully appreciate the inclusion of climate change in the Santiago agenda. We consider this issue as an important priority on which the two regions could carry out a significant cooperation.
Another real challenge in Latin America lies in the insufficient level of productivity of small and medium enterprises, which represents probably the most important difference compared to European standards of production. SMEs are the backbone of the Italian economy. They are closely linked to their territory and they are a major source of jobs, thus ensuring social cohesion at the local level. This experience could be valuable for Latin America. Through the Lombardy region, in its capacity of strategic partner of the EU-LAC Foundation, Italy is willing to contribute to the development of new synergies with small and medium Latin American enterprises, in the framework of bi-regional cooperation schemes.
Ladies and Gentlemen
We are experiencing a reordering of the economic relationship between regions and economic blocs, which goes beyond the traditional notion of rich versus poor countries. Latin America is a case in point. The region’s trade relations have been radically reconfigured in these last twenty years: while trade with Europe has remained stable at approximately 15%, trade with the United States has dropped from 60% to 40% of the total, and trade with Asia has doubled. More important, trade among the countries of the region itself has increased tenfold since 1990. This trend is going to change in significant ways the flow of goods, investment and people in this area, the pace of the change depending on the speed of the process of regional integration, which proceeds by fits and starts.
I wish to take this opportunity to pay tribute to CEPAL and to its officials for their tireless efforts in favour of closer integration in Latin America and the Caribbean, and also to express the wish that an open, inclusive vision of the region’ future will prevail over the temptation of protectionism, that recurrently raises its ugly head. A more integrated continent would provide countless opportunities for foreign investors, bringing to Latin America much needed know how and expertise.
Looking at the wider picture, I wonder whether we shouldn’t think out of the box, go beyond the idea of a closer relationship between Europe and Latin America. I know that many Latin American countries increasingly look to Asia as a privileged partner. This is only natural: there is no denying the appeal of the most dynamic and populous area of the world.
However, the importance of the Pacific notwithstanding, I think we should reflect on the possibilities offered by the idea of a closer connection between peoples and communities across the three continents of the Atlantic instead. Presently, trade and investment mostly follow a traditional North-South route: Europe with Africa, South and Central America with North America. The East-West axis, however, is growing increasingly relevant. Maybe the time is ripe to start considering that the deep historical connections across the Atlantic – such as the ones created by common languages, common or contiguous ethnic, cultural or religious tie, as well as long-standing migration flow across the whole region – might be the basis on which to build an Atlantic, or “PanAtlantic” community . Such a community would start with the affirmation of shared values and the identification of key principles that should govern relations and the use of human and natural resources in the common Atlantic space.
I know that this is not the place or the time to elaborate on this concept. I just wanted to bring this idea to your attention for future reference, for you to consider together with the many stimulating considerations that have been put on the table today.
Thank you for your attention.