latina america advisor entrevista marzo 2014

QPeruvian President OllantaHumala recently wrapped up anine-day visit to the Middle Eastduring which he visited Israel,

Palestine and Qatar, where he signedagreements to increase trade and invest-ment cooperation and promoted invest-ment opportunities to business leaders.Also in recent weeks, Israel was grantedobserver status in the Pacific Alliance andPrime Minister Benjamin Netanyahuannounced he will visit the region in April,while Iranian President Hassan Rouhanisaid the country wants to improve eco-nomic ties with Latin American counties.What is behind increasing engagementbetween the two regions? What do theregions have to offer each other economi-cally? What businesses stand to gain fromstronger ties between Latin American andMiddle Eastern countries?

AR. Evan Ellis, assistant professorof national security studies atthe William J. Perry Center forHemispheric Defense Studies in

Washington: "As Latin America and theCaribbean continues to diversify its eco-nomic relationships globally, its $40.6 bil-lion in trade with the Middle East (as of2012) is modest in comparison with its$807.4 billion in trade with the UnitedStates, $243.5 billion in trade with Europe,or even its $360.4 billion in trade with Asia.This is ironic, given that some of LatinAmerica's most successful businessmenand families come from the Levant, and

traders of Lebanese/Syrian origin play akey role in the region's export sector. Thepresent developments are driven by impor-tant, yet separate and idiosyncratic factors.Iranian President Rouhani, who has a Ph.Dand studied in Scotland, is attempting toleverage his conciliatory gestures on Iran'snuclear program to escape isolation frominternational commercial and financialmarkets through a courtship of the regionwhich is lower-key, less overtly politicaland less ALBA-centric. Israel, in the contextof an increasingly unstable regional envi-

Inside This Issue

BOARD OF ADVISORS

Copyright © 2014, Inter-American Dialogue of 4

www.thedialogue.org Wednesday, March 12, 2014

FEATURED Q&A: What Can the Middle East & Latin America Offer Each Other?............1

Michelle Bachelet Returns to Chile's Presidency .............................................2

Quijano May Seek High Court's Intervention in Electoral Dispute ........................2

Student Leader Fatally Shot in Venezuela Protest.....................................2

AIG Expects 40 Percent Rise in Brazil Premium Revenue..........................3

Comings & Goings: Alcoa, Starwood Hotels & Resorts Worldwide and HSBC ............3

FEATURED Q&A

What Can the Middle East & Latin America Offer Each Other?

Continued on page 2

Moderate socialist Michelle Bachelet,who governed Chile from 2006 to 2010,returned to the country's presidency onTuesday. In a speech to supporters at thepresidential palace, Bachelet vowed tofight inequality in the South Americancountry. See story on page 2.

Photo: Chilean Government.

Michelle Bachelet Returns to Chile's Presidency

Diego ArriaDirector, Columbus Group

Genaro ArriagadaNonresident SeniorFellow,Inter-AmericanDialogue

Joyce ChangGlobal Head ofEmerging MarketsResearch, JPMorganChase & Co.

W. Bowman CutterFormer Partner, E.M. Warburg Pincus

Dirk DonathSenior Partner, Aimara Capital LLC

Jane EddyManaging Director,Corporate & Govt.Ratings Group,Standard & Poor's

Marlene FernándezCorporate VicePresident for Government Relations,Arcos Dorados

Peter HakimPresident Emeritus, Inter-AmericanDialogue

Donna HrinakPresident,Boeing Brazil

Jon HuenemannVice President,U.S. & Int'l Affairs,Philip Morris Int'l

James R. JonesCo-chair,Manatt JonesGlobal Strategies LLC

Craig A. KellyDirector, AmericasInternational Gov'tRelations,Exxon Mobil

John MaistoDirector,U.S. Education FinanceGroup

Nicolás MariscalChairman,Grupo Marhnos

Thomas F. McLarty IIIPresident, McLarty Associates

Carlos Paz-SoldanPartner,DTB Associates, LLP

Beatrice Rangel Director,AMLA Consulting LLC

José Antonio RíosChief Executive Officer,Vadium Technology Inc.

Gustavo RoosenChairman of the Board,Envases Venezolanos

Andrés Rozental President, Rozental & Asociadosand Senior Fellow,Brookings Institution

Everett Santos President, DALEC LLC

Shelly ShettyHead, Latin AmericaSovereign Ratings,Fitch Inc.

-Start Content-

Political News

Michelle Bachelet Returns to Chile's Presidency

Michelle Bachelet was sworn into officeTuesday as Chile's president, returning tothe office that she held from 2006 to 2010.Sen. Isabel Allende placed the presidentialsash onto Bachelet's shoulder in a ceremo-ny at Chile's Congress in Valparaíso, theAssociated Press reported. "It's time to

take this road that we committed tothrough our government program; it'stime to kick start these dreams toward anation that is more just, developed, mod-ern, tolerant and inclusive," Bachelet, amoderate socialist, later told more than5,000 people gathered outside the presi-dential palace in Santiago. "Chile has onlyone great adversary: inequality. And onlytogether will we be able to defeat it."

During her campaign, Bachelet vowed tofinance education reform through highercorporate taxes. She has also promised toimprove the country's health care systemand make Congress more representativethrough constitutional changes. However,the country is facing an economic slow-down. "She promised a lot of things, a lotof reforms, so people expect many thingsto happen," Patricio Navia, a Chileanpolitical science professor at New YorkUniversity, told the AP. "But the economicconditions have changed … The economyis not growing quite as fast and Bachelet isnot going to have the leverage to introduceall the reforms."

Quijano May Seek High Court'sIntervention in Electoral Dispute

Conservative presidential candidateNorman Quijano threatened on Tuesdayto take the dispute over El Salvador's pres-idential election to the country's SupremeCourt and asked electoral officials to annulthe election, Reuters reported. Quijanotrailed leftist candidate Salvador SánchezCerén by about 0.22 percentage points, orfewer than 7,000 votes, as officials work toensure that polling station records matchelectronic vote tallies. Quijano hasdemanded a vote-by-vote recount. Theelectoral tribunal, however, has said it willnot conduct a full recount and has calledSánchez Cerén's lead "irreversible."

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NEWS BRIEFS

Copyright © 2014, Inter-American Dialogue

Inter-American Dialogue’s Latin America Advisor Wednesday, March 12, 2014

Student Leader Fatally Shot in Venezuela Protest

Student leader Daniel Tinoco wasshot and killed at an anti-govern-ment protest late Monday in thewestern Venezuelan city of SanCristóbal, officials said, BBC Newsreported. The city's police chief,Ángel Perdomo, said Tinoco wasshot at an intersection, and eyewit-nesses reported seeing armed menon motorcycles attack Tinoco andother students. Daniel Ceballos, thecity's mayor, from the oppositionPopular Will party, said the attackhappened after a day of clashesbetween the opposition, securitypersonnel and pro-governmentmilitias known as colectivos.

Bank of America Names New CEO for Brazil Operations

Rodrigo Xavier has been namedchief executive officer of Bank ofAmerica's operations in Brazil effec-tive March 31, the United States'second-largest bank by assets said ina statement Tuesday. Xavier replacesAlexandre Bettamio, who becamehead for Latin America inSeptember.

Corpbanca Shareholder Vows toPress Case Against Merger

A minority shareholder in Chile'sCorpbanca vowed Monday to con-tinue opposing the proposed mergerwith the local unit of Brazilian bankItaú Unibanco Holding, The WallStreet Journal reported. In a secondletter to Corpbanca's board, CarticaCapital's Teresa Barger said theChilean bank's controlling share-holder was seeking to "divert yourattention from the fundamentalissues of value and fairness we haveraised..." Cartica has said controllingshareholder Álvaro Saieh is getting abetter deal out of the merger thanare minority shareholders.

“ Chile has only one great

adversary: inequality. And

only together will we be

able to defeat it.”— Michelle Bachelet

ronment, seeks to shore up overseasfriendships while building its position inthe global economy by exploiting itscomparative advantages in high-valuesectors such as information and othertechnologies, defense systems and thesecurity industry. The February visit byOllanta Humala to the Middle Eastarguably sought to build on Lima's host-ing of the Arab-Latin American summitin 2012, to showcase Peru's growing sta-tus as international player, and was care-fully balanced to include Israel andPalestine, plus a conservative Gulf statewith an ample sovereign wealth fund."

ACecilia Baeza, professor ofinternational relations at theFundação Getulio Vargas anddeputy coordinator of the

Arab-Latin American Forum: "The recip-rocal interest of Latin America and theMiddle East is relatively new. Bothregions have multiplied their efforts overthe last decade to diversify their tradeand investment partners, and it can beargued that they represent the last eco-nomic frontier for each other. Althoughrising, bi-regional trade and investmentflows remain relatively low when com-pared with other South-South economic

Featured Q&AContinued from page 1

Continued on page 4

Company News

AIG Expects 40 Percent Rise in Brazil Premium Revenue

New York-based insurer AmericanInternational Group is expecting a 40percent rise in revenue this year from itsunderwritten premiums in Brazil, theBrazil unit's leader said late Monday,Reuters reported. AIG is planning toinject approximately $120 million intothe unit in an effort to boost its life, prop-erty-casualty and high-risk corporateinsurance segments, according to theexecutive, Jaime Calvo. The move is partof a larger strategy by AIG to growthrough acquisitions. The insurer wantsto make Brazil one of its five largest mar-kets by 2017. Currently, the SouthAmerican country is not even in the com-pany's top 20 markets. AIG is aiming tonearly double its staff to 700 employeesover the next three years, said Calvo. "Our

plan is one of accelerated growth. Itimplies organic growth of course, but itincludes acquisitions too," said Calvo,Reuters reported. "The secular process ofhousehold income gains in Brazil willnaturally lead to more demand for insur-ance services and products." Insurancecompanies have seen Brazil as ripe forgrowth. In Brazil, consumers spend lessthan one-tenth of the amount of moneyon insurance than do consumers inBritain or the United States. Premiums inBrazil increased 18 percent for 2013through November, according to Susep,Brazil's insurance sector watchdogagency. In addition to seeking a growingmarket share, AIG is aiming to achievehigh returns, said Calvo. Consumer linesof insurance, such as auto insurance,make up about 25 percent of AIG's busi-ness in Brazil, and the company hopes toincrease that to about 75 percent, headded.


of 4Copyright © 2014, Inter-American Dialogue

“ Our plan is one of

accelerated growth.”— Jaime Calvo

Comings & Goings

Paolucci Named President of Alcoa Latin America and the Caribbean

Metals company Alcoa on March 6 announced that Aquilino Paolucci, vice pres-ident of business development and regional affairs for Latin America, has beennamed president of Alcoa Latin America and theCaribbean effective March 1. He has also been namedpresident of global primary products for Latin Americaand the Caribbean. In his regional position, Paoluccireports to chairman and CEO Klaus Kleinfeld, and in theglobal primary products position, he reports to GPP ChiefOperating Officer Roy Harvey. Paolucci has worked atAlcoa since 2004 and has 28 years of experience in finance.He previously served as the CFO of Alcoa LAC and of theBrazilian subsidiaries of Pharmacia & Upjohn and later,Monsanto. He holds a bachelor's degree in accountingfrom Mackenzie University in São Paulo and a MBA fromthe Ibmec School of Business. Paolucci replaces Franklin Feder who will retireAug. 1. In his 23 years at Alcoa, Feder worked as director of corporate develop-ment, vice president of financial planning and analysis and then as president ofthe region.

Librizzi Stepping Down as Americas Co-President at Year's End

Osvaldo V. Librizzi, currently the co-president of the Americas at StarwoodHotels & Resorts Worldwide, will step down from the position at the end of thisyear and serve as non-executive chairman until the end of 2015, the hotel com-pany announced Feb. 25. Current co-president of the Americas, Sergio Rivera,will become president and assume full responsibility for the region. JorgeGiannattasio, who is currently senior vice president and CFO for the Americas,was named chief of Latin America operations and global initiatives. Giannattasiowill begin overseeing regional operations this summer and will report to Rivera.Librizzi began working at Starwood in 1975 as an assistant controller at theSheraton Buenos Aires, moving progressively through more senior positions.Before being serving co-president of the region, he was president of the Americasfor 22 years, during which time Starwood grew to become the largest hotel oper-ator in the region. Giannattasio joined Starwood as vice-president of finance forLatin America in May 2004 and previously held management roles at BostonScientific Corporation and Deloitte in Latin America and the United States.

Naigeborin Named Head of Latin America Equity Trading at HSBC

HSBC announced Feb. 25 that Renato Naigeborin has joined the investmentbank as head of equity trading for Latin America. Naigeborin comes to HSBCfrom BR Partners, a boutique investment bank where he was a partner.Naigeborin will manage HSBC's equity products in Latin America, includingstructured equity derivatives, prime and cash and work with the sales, asset andstructured finance and global banking teams to develop new products. He alsopreviously worked as the head of equity trading at Citibank Brazil and head ofequity derivatives at Merrill Lynch. He will be based in Brazil and report toOtavio Mendes, head of global markets for Brazil, and Delfos Machado, head ofequity trading for the Americas.

Paolucci

File Photo: Alcoa.

of 4Copyright © 2014, Inter-American Dialogue


links. And yet, complementarities doexist, in particular in the areas of foodsecurity and agricultural development,energy, hospitality, and infrastructureand logistics. Business opportunities arestill largely untapped, sparking a newinvestor appetite and political interest. Inthe area of food security for example,several deals involving Gulf interests havebeen concluded in Latin America overthe last few years: In 2011, Al GharrafaInvestment, a subsidiary of Qatar's sover-eign wealth fund, increased its stake inAdecoagro, an agricultural company inSouth America backed by billionaireinvestor George Soros and with opera-tions in Argentina, Brazil and Uruguay.In 2012, the Saudi company Almarai, thelargest dairy company in the Gulf,acquired Fondomonte, an Argentinecompany, and its 12,306 hectares of land.What is lacking now for greater invest-ment flows is information and infra-structures for connecting the two regionswhose geographical distance is a realobstacle to the strengthening of bi-regional relations. These two shortcom-ings have been identified during therecent inaugural meeting of the Councilon Arab Relations with Latin Americaand the Caribbean—a newborn non-governmental and multi-stakeholder bi-regional organization—as a top priority."

ACecilia Porras Eraso, presidentof the Arab ColombianChamber of Commerce: "It is ofvital importance for countries

in the region to strengthen relations withthe countries of the Middle East andNorth Africa. The privileged geographiclocation, the biodiversity, the wealth ofnatural resources and the potential fordevelopment of food reserves in LatinAmerica increase Middle Eastern coun-tries' interest in the region. The signing ofAPIs (Acuerdos de Protección deInversión) with Qatar and the UnitedArab Emirates has been the first step forColombia, attracting investors' attention.

There are a number of regional and bi-regional players. One is the CooperationCouncil for the Arab States of the Gulf(GCC), a political and economic union ofthe six Arab states on the Persian Gulf.The objectives are the formation of simi-lar regulations in diverse fields such as theeconomy, finances, trade, customs,tourism, legislation and administration.An expanded and unified GCC marketwould offer new trade and investmentopportunities. Another is the Summit ofSouth American-Arab Countries –Federation of Arab-South AmericanChambers of Commerce, of which CCACis a founding member. It is playing animportant role in the increase of South-South relations, conducting variousactivities to encourage cooperation. Itincludes 34 nations, 12 in South Americaand 22 Arab countries, who haveexpressed the desire to negotiate econom-ic agreements. A third is CARLAC, theConsejo Para las Relaciones Entre elMundo Árabe y América Latina y elCaribe, a council comprised of more than40 leaders from Latin America and theCaribbean and the Arab world. There arefour main areas of cooperation: trade;investment; industrial cooperation:small- and medium-sized enterprises/small industries; and technology transferin agriculture, energy, mining and metals.An in-depth understanding of themechanics and dynamics of the GCCcountries should help Latin America—both governments and the private sec-tor—to formulate a winning strategy forsuccess in the region and individualcountries. In view of the current econom-ic problems in Europe and the UnitedStates' approach in politics, businessopportunities abound for two-way tradeand investment."

The Advisor welcomes reactions to theQ&A above. Readers can write editorGene Kuleta at [email protected] comments.

Featured Q&AContinued from page 2 Latin America Advisor

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