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Analysis

Serious business:

by Susana Malcorra, speaking to David Smith

 

‘We need to prove we mean serious business,’ says Susana Malcorra, chair of the 2017 ministerial meeting of the WTO and former Argentine foreign minister. Speaking to David Smith, member of the OMFIF advisory board, she discusses Argentina’s leadership role and investment prospects for Latin America.

 

David Smith: At the end of 2018, Argentina will be hosting the G20. What is your country going to bring to the table?

Susana Malcorra: Well, first of all, this is not by chance. When President Macri took office, we discussed thoroughly what we wanted to do with Argentina in the world. To prove ourselves, we decided to ask to host the WTO ministerial conference, and for the presidency of the G20. At most, we thought we would get one of them, and instead we got both. This is historic because there has never been a continuation of the chair of the WTO going into the G20.

First, we want to bring a Latin perspective. Second, one thing that everybody is worried about is the question of jobs and closing the inequality gap through creating jobs.

We are putting a lot of emphasis on work and education. Interestingly, the G7 has an education strand, but the G20 does not. Argentina is going to launch one, with a focus on retraining workforces. In 10 years, half of the work that we see today will no longer exist.

Smith: In 2018, there will be elections in Brazil, Mexico and Colombia. Do you see a shift in Latin American politics towards a more pragmatic, pro-business philosophy?

Malcorra: My sense is that issues around the North American Free Trade Agreement taint the decision-making process in Mexico to a much larger extent than some people realise. If proceedings on Nafta deteriorate, the political impact could be massive, reflecting a growing nationalist perspective.

In the case of Brazil, questions around Odebrecht and other corruption scandals have touched everything and could have an impact on the election. In Colombia, the peace process between the government and the Revolutionary Armed Forces plays a key role. A reaffirmation of the peace process should yield results. But, again, we should be cautious and not second-guess what the people of each of these countries might decide.

Smith: Foreign investors have been slightly uncertain about devoting funds to Latin America. What is your hope for foreign investment into the region in the coming year?

Malcorra: I think we have been weak at making the case for Latin America. When you look at the world from a security perspective, Latin America is unique. When we say that this is a region free of war, it’s factually correct. Yes, we do have many problems, but we still have a peaceful setting, as well as the strength of our natural resources. I don’t think we have been good enough at conveying that message.

We need to start looking at projects from a regional perspective, like the plan to integrate supply chains between the Atlantic and Pacific oceans. Extensive road and rail networks are needed through Brazil, Bolivia, Peru, as well as Chile, Argentina, Colombia and Ecuador. Those projects require large investment, and have a huge return potential. There are players who are ready to take up those opportunities.

Smith: What would be the impact if Mercosur, the subregional trade bloc, completes its deal with Europe, which has been debated for nearly 20 years?

Malcorra: At the moment, when other large markets are turning towards unilateralism, to reassert your commitment to world trade has political significance. I think there is a chance the deal will get done.
It is also crucial, now that the US is retreating, for Europe to take a stand and say, ‘Listen, here we are.’

Smith: In December you, alongside President Macri, will be leading the G20 in Buenos Aires. What do you hope to achieve by then?

Malcorra: My hope is that we can prove to the world that we are a serious partner. That we don’t bring surprises. That we lay out an agenda and that we collaborate with others effectively. Predictability, responsibility and a serious approach to business are fundamental, because, as you said, some investors are uncertain about Argentina. We need to prove we mean serious business, starting with the G20.

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