DOING BUSINESS IN THE AMERICAS IN THE NEW GLOBAL ECONOMY: A NEW DAWN IN THE HEMISPHERE?
ABA SECTION OF INTERNATIONAL LAW FALL CONFERENCE ON THE AMERICAS

October 26, 2017 - Miami J.W. Marriott Marquis, Florida

In spite of new signs of growth acceleration in key developed countries and emerging markets,  and a recovery in Latin America, we should continue to focus our efforts in making this recovery sustainable by generating more opportunities of progress to vulnerable groups, that otherwise may fall back into poverty. 

Dear Friends,

• Our region faces a period of a slow recovery that need to be sustained. The Consensus forecast of market analysts projects an increase in the gross domestic product of Latin America and the Caribbean of 1.2% in 2017 and 2, 3% in 2018. This as a result of the recovery in Argentina and Brazil and growth over 2% in Mexico.
• In fact, Latin America and the Caribbean stands today at a critical point. The economic and social gains achieved in the last decade –70 million people lifted out of poverty and a growing middle class— are at risk if this recovery is not sustainable.
• According to the World Bank, 40% of the region’s population is vulnerable and prone to slipping back into poverty in the face of an internal or external economic shock or a natural disaster. 
• Just last month, we were all witness to the devastating impact of Hurricanes Harvey, Irma, and Maria. Hurricane Irma turned 90% of homes on the island of Barbuda to rubble and left financial losses of $100-200 million. Hurricane Maria knocked out power on the entire US territory of Puerto Rico and destroyed housing and roads and damaged an estimated 90% of the structures on the island of Dominica.
• Latin America and the Caribbean also remains the world’s most unequal region with unacceptably high poverty rates of almost 30% [29.2%, ECLAC 2016]. After falling significantly during last decade [from 43.9% in 2002 to 28.8% in 2012], the number of poor is now increasing and stood at 175 million people in 2015.
• Indigenous people, afro descendants and those living in rural areas are overrepresented among the poor. Gender discrimination is also a significant factor. This shows that poverty and exclusion disproportionately affects vulnerable populations, deepening inequality.
• Poverty is not solely the product of low or no income in the region but also the result of lack of opportunities.
• For instance, progress on employment has been limited because labor informality remains a structural problem.
• In many countries the number of informal workers, whether salaried or self-employed, exceeds those in the formal sector, representing in some cases up to 60% of the labor market.
• Today, in Latin America, one in five young people, approximately 30 million people, is a “Nini” –as we say in Spanish– (ni estudia ni trabaja). These young people –mostly women– are not in school and don’t have a job. Half do not finish high school. The average labor informality among those young people, who dropped out of high school is 92%.
• Investing in people is therefore essential. Quality, inclusive and affordable education is the only way to provide our youth with equality of opportunity.
• Access to education in terms both of quantity and quality has a direct impact on upward social mobility. Intergenerational social mobility in the region has improved but remains very limited. Parents’ education and income levels still substantially influence their children’s outcomes and incomes.
• Inequality declined in Latin America over the past decade, but less so than generally expected given the increased access to education. The education provided was not of sufficient quality, which meant that when young people entered the labor force their skills were less recognized, affecting their income expectations.
• We need to address this skills gap urgently, even more so, in the face of the rapid transformation of the global economy.
• According to the World Economic Forum, 65% of children entering primary school today will ultimately be working in completely new types of jobs that do not yet exist. Even "old" jobs will look radically different in workplaces transformed by technology, changing demographics, and globalization.
• Multilateral and regional indexes and studies confirm that Latin America and the Caribbean are underperforming on innovation taking into account the size of the economies, assets and capabilities available.
• Countries are not producing enough value-added products and services through businesses to foster a new development path.
• Diversifying our economies is not an option, it is a necessary condition to generate a viable path to shared prosperity.
• Innovation, entrepreneurship and technology can be powerful tools to foster shared prosperity when combined with quality education and a vibrant entrepreneurial ecosystem.
• An Inclusive Innovation and Competitiveness Agenda represents a transformative agenda, where opportunities and rights are expanded to all citizens, to generate upwards social mobility.
• We also need to work to improve our enabling ecosystems; thinking globally and acting locally; nurturing assets and capabilities in each of our communities; building on our comparative and competitive advantages, our biodiversity, culture and identity.
• Competitiveness and innovation are measured globally but they are developed locally.
• Our communities are the places where talent is educated, developed and retained; where the investment, capacities and connections emerge.
• Innovation and technology have also empowered citizens who have mobilized in several countries of the Hemisphere against corruption to demand transparency and accountability.
• Innovation and technology can also help improve the quality of our institutions, which influences investment decisions and the organization of production and plays a key role in the ways in which societies distribute the benefits and bear the costs of development strategies and policies.
• The role of institutions goes beyond the legal framework. The efficiency of government’s operations are also essential: excessive bureaucracy and red tape, overregulation, corruption, dishonesty in dealing with public contracts, lack of transparency and trustworthiness, inability to provide appropriate services, and political dependence of the judicial system,  impose significant economic costs and slow the process of economic recovery.
• The private sector also has a key role to play. An economy is well served by businesses that are run honestly, where managers abide by strong ethical practices in their dealings with the government, other firms, and the public at large. Private-sector transparency is indispensable to business.
• Dear Friends,
• Venezuela, is a good example of the cost of failed institutions, the price of corruption, exclusion, polarization, and failed government.
• Summing up, Inequality and corruption are holding back our democracies and our economies. Both political power and wealth are strengthened when they are clearly separated.
• When taking office at the OAS in May 2015, we set the goal of transforming the OAS into a beacon for the defense of human rights and democracy in the hemisphere as a central piece of our strategy, while at the same time fostering inclusive economic development through expanding opportunities for all.
• We must renew our commitment to pluralism, openness, diversity and inclusion. The shift towards isolationism and extreme nationalism is something we must resist.
• We all are part of a shared destiny. Together we must take on the responsibility of building a common future anchored in progress, democracy, social justice, rights and opportunities for all.

Thank you.