Colombia leader seeks to turn poor into consumers
CARTAGENA COLOMBIA’S president told Latin American businessmen on Friday that the region’s nearly quarter billion poor people could be their customers if they join with government to fight poverty.
“Every Latin American that gets out of poverty is one more consumer,” Colombian President Juan Manuel Santos said at the Business Summit of the Americas in Cartagena.
“That’s why it’s so profitable and so important that macroeconomic methods are translated into social improvement,” he said.
Hundreds of entrepreneurs and several Latin American presidents attended the business meeting.
“Fighting poverty is a profitable business for everyone,” Santos said.
More than 40 million Latin Americans have escaped poverty in recent years, but in 2010, 31.4 percent of the region’s population — 247 million people — still lived in poverty or extreme poverty, according to the Economic Commission for Latin America.
Santos also suggested that US and Canadian entrepreneurs should think of Latin America not “as a region full of problems, but as a region full of opportunities.” If Latin America takes advantage of its capacity for energy, water and food production, as well as it biodiversity and young population, “and if the United States realises its long-term strategic interests are not in Afghanistan or in Pakistan, but in Latin America, together we can find the prosperity that we are looking for,” Santos said.
Luis Alberto Moreno, president of the Inter-American Development Bank (IDB), called on entrepreneurs to increase trade within Latin America.
If Latin America’s annual economic growth of the past decade continues at around 4.8 percent, “we could double our per capita income by 2030, the poor would be only 10 percent of the total population and 75 percent of our continent would be part of a vibrant middle class,” Moreno said.
Reaching the goal requires “intra-regional trade” to extend communications and infrastructure to remote areas, thereby “offering services and products to the socalled social base of the pyramid,” Moreno said.
Trade among Latin American countries today is just over $180 billion, only 19 percent of total trade, compared with 48 percent of internal trade in Asia and 54 percent in Europe, according to the IDB.
“Aviation represents one of the best trade opportunities,” Moreno said.
Millions of Latin Americans are starting to fly for the first time, which means over the next 20 years, the region’s airlines will buy more than 2,500 new aircraft, the IDB estimates.
“That represents a huge opportunity for companies such as Embraer, which manufactures aircraft in Brazil and China for Canada’s Bombardier, which has a factory in Queretaro, and Boeing, which already buys components from aerospace clusters in Mexico,” Moreno said.
Mexican President Felipe Calderon suggested that protectionist economic policies be avoided.
The IDB has identified education as another challenge for Latin America, where only 40 percent of young people finish high school and half the region’s companies report difficulty finding skilled labour.