Source: El Cronista
In the framework of the International Economic Forum of the Americas, which was held with speakers from around the world focusing on how to reactivate the economy after the coronavirus pandemic, Argentine José Luis Manzano, president of Integra Capital, warned that, as a result of ideological polarization and the consequent lack of regional integration, “Latin America is in a perfect position to have a second lost decade“.
“While the economy slowed down, the government intervened to deal with the stagflationary effects of the pandemic,” he said in reference to the interruptions in the commercial chain, with the impact on inflation not only coming from monetary easing but also from the disruption in the supply chain. “This is happening in the world of high income, in the world of the core countries”, he said.
“The region is highly ideologically polarized, and this has destroyed or paralyzed regional integration processes and electoral change in some, or many of the countries, creates more caution on the investment side,” he explained.
“Argentina – he added – is in a too long negotiation with the IMF, and an inflation of 50% and a very low foreign direct investment. And in Brazil, the management of the pandemic isolated the country from the region and from most of the world”.
In this context, he pointed out, there is no articulated dialogue from the region with multilateral organizations and forums such as the Summit of the Americas “are considered a stage for political discussion rather than a tool to promote business and investment.”
In any case, he evaluated that Latin America “should make an effort to commit itself to the reconstruction endevour” that is being led by the United States and Europe, and for that “it has to offer a set of commitment policies, friendly to the market, with a lot of social inclusion “.
“Also, try to allocate part of the Special Drawing Rights (SDR) that have been over-allocated to attract the private sector to reconstruction, and call on multilaterals such as the BID and the World Bank to create a common conversation in the region about how to recover”, he added.
“Without that,” he evaluated, “it will be a group of countries in the same geographical place having individual conversations … Because, by the miracle of science, we will all turn the page on the pandemic, because vaccines and treatment will finish the job; people will turn the page and the region will come off to have the opportunity to rebuild better, to rebuild green. “
ONSHORING AND NEARSHORING
“If the region wants to see that nearshoring opportunity, it has to offer certainty as an ally of the United States and the European Union. And it has to offer certainty and long-term commitment, because if you are the advisor to President Biden, or you feel in the European Commission and you have to plan your supply of copper, lithium, rare earths for the next 30 years, you will not do it with an ally that is not reliable. And I do not see that in the discussion about local leadership. The region has split too much “, sentenced.
“I would say that the region is facing a situation, and we believe that it can go better, much better or very badly … and it will not happen unless there is active action to re-engage the region with the United States and Europe,” he claimed.
GLOBALIZATION, BEFORE AND AFTER THE PANDEMIC
In the framework of the topics that went through the panel in which he participated together with the Secretary of Commerce of the North American state of Florida and CEO of Enterprise Florida, Jamal Sowell; Allianz Chief Economist Ludovic Subran; Nirvana Technology CEO Bill Harris, Manzano admitted that a “political reading” of the pandemic could be made in which the conclusion was “we should be more isolated and this would not happen to us.”
But he immediately pointed out: “It is an absolutely wrong reading of the pandemic and it is also an example of the lack of coordination, of not having treatment protocols.”
Regarding the lessons learned from the pandemic in reference to the globalization process, he said that “we have to try to recover coordination, globalization, obviously recognize national identities and national security issues, but -he stressed- international coordination and trade are needed.”
“So the letter of the pandemic is that we are all the same. We could all have died, or we could die in the next. So the need for coordination in the global effort is much greater than ever and the answer cannot be isolation”.