Miami conference: Better roads to improved ports creates business opportunities in Latin America
Trade Americas & ConnectAmericas Expo helps link business executives with much-needed infrastructure opportunities in Latin America
09/03/2014 6:39 PM
09/03/2014 6:41 PM
Latin American countries are investing about 2.5 percent of their GDPs in roads, airports and other big infrastructure projects but speakers at a Miami conference said Wednesday that still isn’t enough to satisfy the region’s growing needs.
Some 450 government and business leaders from 28 countries have gathered for the two-day Trade Americas & ConnectAmericas Expo — an opportunity to explore ways to bridge Latin America’s infrastructure gap.
But speakers at the conference, which was organized by the Inter-American Development Bank and Latin Trade Group, said that with growing populations — the region is expected to have 700 million people by 2030, more people moving into the middle class and globalization, most countries’ infrastructure is woefully inadequate.
Relatively brisk economic growth in Latin America in recent years also has “revealed the need to improve infrastructure,” said Bernardo Guillamon, the IDB’s manager of outreach and partnerships.
Even though countries such as Brazil, with $900 billion in planned public and private investment over the next decade and Peru with an anticipated $15 billion in investment are plowing money into projects, they still have a long way to go. The World Economic Forum, for example, ranks Brazil’s infrastructure 114th of 148 nations and Peru at 101.
To catch up to international standards, infrastructure investment rates in Latin America and the Caribbean would need to average 5 percent of GDP over the next decade, said Guillamon, and much of that money will have to come from private investments.
The conference coincides with the IDB’s launch of ConnectAmericas.com, an online business community where infrastructure developers can meet potential local partners, suppliers and service providers, said Fabrizio Opertti, project manager for ConnectAmericas and chief of the IDB’s trade and investment unit.
On Thursday — the second day of the Miami event, which is being held at the JW Marriott Marquis Miami, some 400 business matchmaking meetings have been set up.
“I think it’s fair to say there are opportunities everywhere,” said José W. Fernández, former assistant secretary of state for economic, energy and business affairs and now a private attorney.
“One critical aspect is the growth in the middle class” and their demands for better roads, airports, rail transportation and so on, said Fernández.
While the need is definitely there, “our biggest challenge is project execution,” said Leonardo Rodríguez, president of Emerson Latin America. “At the end of the day these projects take people — educated individuals.”
“We have determined the greatest single show-stopper” is lack of human capital, he said. Engineering and technical talent is especially needed in the region, Rodríguez said.
An impediment to more U.S. companies getting involved in regional projects, said Fernandez, is “there’s still too much regulatory uncertainty.”
Another problem that is taking a toll on Latin America’s ability to fully take part in global trade is lack of connectivity — inadequate roads, bridges, rail service — between areas where products are produced and ports, as well as lack of connections to get products to consumer markets.
Alberto Alemán Zubieta — former administrator of the Panama Canal Authority and now chief executive of ABCO Global, a logistics advisory firm — said the problem isn’t only lack of infrastructure but lack of efficient infrastructure.
It’s sometimes more expensive to move products within a country than to move them abroad, Alemán said. It’s up to the private sector to educate governments on the importance of lowering the cost of moving cargo — a concept they sometimes don’t get, he said.
Making sure new infrastructure projects operate efficiently — everything from investing in software to meticulous planning of big projects — also creates business opportunities, he said.
For example, “a project of the magnitude of the Panama Canal expansion requires a lot of planning and that’s an area of opportunity,” Alemán said.
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