CAF Conference Experts Think Asia is the Future of the World and of Latin America

The experts that discussed the relationship between Latin America and Asia during the second and final day of the XIX CAF Annual Conference in Washington, agreed that, despite the lower growth rates expected for China's economy over the next years, Asia's region as a whole will remain the world's fastest-growth area, and Latin America must be well-positioned to maximize all the opportunities created as a result of this expansion.

"The world's economic future is in Asia," said Leonardo Arizaga, Ecuador's Deputy Minister of Foreign Affairs and Political Integration. "In the next 10 years, Latin America will grow 7 or 8 percent; Africa, 5 percent; Eastern Europe, 6.5 percent (...) meanwhile, Asia will grow 60 percent, that is, 7, 8 or 10 times more. Whoever doesn't recognize this reality, just missed the boat," he added.

During a panel discussion about whether the link between Latin America and Asia might be going from a state of enchantment to one of disappointment, Marta Lucia Ramirez, former Colombian Minister of Defense and Commerce, was optimistic, and stressed the importance of deepening relationships with Asia.

"Now that the party is over, we must prepare for a more stable, more mature relationship, perhaps with less surprises, but it must continue and it must deepen itself; and we need to seize the Asian economies, with which we have complementarities, and its middle classes," which have grown exponentially, Ramirez said.

Hiroshi Watanabe, Governor and CEO of the Bank of Japan, who was also optimistic, stressed the long relationship history between his country and Latin America, indicating that the link with Asia remains very strong. "I see no saturation," he said.

After a 20.5% growth in the last 12 years, trade activity between Asia and Latin America reached $442 billion this year. According to Andrea Bernal, the journalist who moderated the panel, Asia now accounts for 21% of international trade in Latin America, compared to 34% with the United States.

Regional integration, which was also the subject of another panel Thursday afternoon, emerged as one of the main outstanding issues in Latin America.

"Latin America's integration has failed. In the year 2000, I never thought that the relationship with Asia would be handled this way, individually," Ramirez said. "I envy Asia for their continuity, their long-term vision, their planning."

The former minister indicated that the region is missing highly valuable opportunities when negotiations are done individually with Asia. "If we were integrated, we could have regional value chains," she added.

An interesting perspective came from Harinder Kohli, Centennial Group's President and CEO. Kohli reminded Latin America that Asia is more than just China.

"Latin America should see [all of] Asia as a partner," said the businessman, who emphasized that foreign investment in his country of origin, India, is led by the private sector. By 2050, he stressed, India is expected to be the third richest country in the world, and Asia will represent 50% of the world economy.

"India is coming" to Latin America, but if you want to get the most benefit from this relationship, the region needs to improve its business environment - its growth capacity, its productivity, its savings and investment capacity, and its commercial connectivity, he said.