Politics Of Policy | Salsa With Latin America
Venezuela and Brazil crises are dominating headlines, but reforms in countries like Colombia and Cuba are infusing improved positivity about Latin America
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Nestled in the Andean mountains of Colombia, Medellin is a city with narcotic past. It present and future however is high on innovation, transformation and smart growth. Host to the World Economic Forum on Latin America, the city is a living symbol of how a determined policy and commitment to execution can enliven lives.
Once caught in crossfire between drug cartel led by Pablo Escobar and the government, Medellin reinvented itself with bustling public spaces, investment in inclusive infrastructure and deep focus on art and culture. I walked around Plaza Botero named after its famous painter and sculptor to experience bustle and confidence that barely reveals Medellin’s past.
In many ways, Medellin reflects how Colombia itself has grown out of 60 years of internal strife. In the last five decades it has had only once year of negative growth. In 2010-2015, Colombia grew at an average rate of 4.5% according to IMF. The free trade agreement with the US has helped Colombia learn how to play in developed markets.
The investment in its future is evident from its emphasis on infrastructure. Investment opportunities $900 million in airports, $1.4 billion in ports, and $17 billion in roads is attracting FDI from across the world. A young educated population is a big advantage too. President Juan Manuel Santos made it clear at WEF that he will continue to focus on growth and internal peace, “War is easier peace needs hard work by leaders. We must work hard for peace and development of our country.”
Countries like Peru (5.2 per cent) and Chile (4.3 per cent) join Colombia as growth leaders in the region. While negative news from Venezuela and Brazil dominate headlines, observers see a silver lining. The strengthening of democracy in many countries means that institutions like independent judiciary has been able to impact political developments.
While Latin America ranks high in Corruption Perception Index of Transparency International, there is a fundamental change taking place in many countries. People have become less tolerant of it. Citizens across the region are questioning corrupt leaders like never before. Independent judiciary and international attention is forcing venal leaders to step down. Brazil is a great example. The crisis in Brazil is a celebration of a rising and strong civil society that demands accountability.
Add to this the changes in Cuba. The reforms initiated by the government especially with the lifting of sanctions by US is set to add new momentum and excitement to the region. Colombia and many other countries are signing agreement for economic cooperation and development with Cuba.
At Medellin, I was fascinated to see Cuba government deploy the latest in marketing to present itself as a FDI destination. The government screened a slick and short film about the country offering no hint of its communist history. Foreign ownership of 100 per cent is allowed. Taxes are exempt for first 8 years while the country promises decision on investment application within 60 days. Of course, Cuba has a steep learning curve to climb while it opens up to a modern world.
India has been a steady economic partner of Latin America. Its reserves of oil and market for automobile and pharmaceutical products have dominated trade. From $1.6 billion in 2001, India’s trade with the region has grown to about $50 billion in 2015. “As the only major economy growing at over 7 per cent, India is attractive to LAC regimes seeking foreign investment and markets for their products. Indian enterprise needs to seize this opportunity,” says Deepak Bhojwani, former Ambassador of India to Colombia, Venezuela and Chile and Founder of Latindia Consulting.
Prime Minister Narendra Modi’s visit to Mexico underlines the rising importance of the region for India. President Enrique Pena Nieto managed a global photo op by driving the Indian prime minister to dinner. Mexico is the biggest investor from Latin America into India and India invests the most in Mexico within Latin America. In a recent conversation Kiran Mazumdar Shaw, Founder of Biocon told me how Mexico and Cuba are important markets for her company. Biocon has partnerships in both countries to access US and Latin America.
Prime Minister Modi and the government must enhance its strategy for Latin America that includes improving flight linkages with the region.
For India and world, it is time to salsa in Latin America.