Among the main obstacles to business development in Latin America are lack of financing, limited access to foreign investment, infrastructure deficiencies and limited capacity to assimilate and generate technological innovations. These phenomena reflect institutional shortcomings. The objective of this seminar is to identify priorities for institutional reform to improve the competitiveness of Latin America. Discussion topics will include the following:
Macroeconomic stability and good financial supervision are insufficient to resolve the problem of lack of financing. What reforms are needed in the legal framework governing dealings between debtors and creditors to facilitate financial development? Should more protection be given to creditors or debtors in order to expand access to credit? Which institutions can improve the incentives of debtors to repay their debts?
Private foreign investment to Latin America is largely in the form of foreign direct investment and is very concentrated in a few countries. What institutional factors explain this situation? How can the legal risks that limit access to international financing be reduced?
After a decade of privatization, the investment and efficiency of the infrastructure sectors is still hindered by regulatory problems. What are the priorities for regulatory reform in these sectors? Do the institutional and political conditions exist for independent, transparent and predictable regulation?
An unfavorable environment for innovation is impeding a more rapid assimilation of information technology in Latin America. What institutional aspects should be addressed in order for countries to take maximum advantage of the new economy?
Recognized experts in these areas will share their opinions with representatives of governments and the private sector, basing their discussions on a set of studies prepared especially for this seminar by the IDB Research Department.
Contact: Eduardo Lora - eduardol@iadb.org
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9: 00 a.m.-9:15 a.m.
Welcome
Nicolás Eyzaguirre, Minister of Finance, Chile
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9:15 a.m.-9:45 a.m.
Opening Remarks: The Institutional Obstacles to Competitiveness
Among the principal obstacles to business development in Latin America are the lack of financing, the limited access to foreign investment, and deficiencies in the regulatory framework of infrastructure sectors and of the legal system for the development of the new economy. These phenomena reflect institutional deficiencies.
Presentation:
Eduardo Lora, Acting Chief Economist, IDB
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9:45 a.m.–10:45 a.m.
Access to Credit: Incentives for Creditors
The rights of bank creditors may be limited by difficulties in recuperating guarantees, penalizing overdue financial obligations, and intervening in the liquidation of bankrupt businesses. Are these restrictions responsible for the limited financial development of Latin America? What reforms should be made to the institutions that protect creditors’ rights in Latin America?
Moderator:
Enrique Marshall, Banking Superintendent, Chile
Panelists:
Miguel Kiguel, President, Banco Hipotecario, Argentina
Patricia Correa, Banking Superintendent, Colombia
Agustín Carstens, Viceminister, Ministry of Finance, Mexico
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10:45 a.m.–11:45 a.m.
Access to Credit: Incentives for Debtors
Debtors’ inclination to repay is higher when the cost of noncompliance is high. In addition to guarantees and penalties for arrears (discussed by the previous panel), what other institutions could provide better incentives for borrowers to repay debt (credit bureaus, group loan systems, etc.)? What can be done to develop these institutions?
Moderator:
Enrique García, President, Andean Development Corporation
Panelists:
George Mc Candless, Research Department, Central Bank, Argentina
Alvaro Retamales, Manager Microenterprises, Banco del Desarrollo, Chile
Margaret Miller, Senior Economist, The World Bank
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11:45 a.m.-12:45 p.m.
Foreign Investment and External Financing: Incentives for International Investors
Private external finance to Latin America is provided mostly through direct foreign investment and is concentrated in a few select countries. What institutional factors explain this situation? What can be done to reduce the legal and institutional risks that restrict access to international financing?
Moderator:
Guillermo Perry, Chief Economist for Latin America, World Bank
Panelists:
Carlos Winograd, Secretary, Consumer Protection and Competition, Ministry of Finance, Argentina
Michael Mortimore, Chief, Unit of Investment and Corporate Strategies, CEPAL
Graciela Kaminsky, Researcher, George Washington University
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12:45 p.m.- 2:15 p.m.
Lunch Break
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2:15 p.m.- 3:15 p.m.
Electricity and Telecommunications: Regulatory Institutions
The rapid process of privatization and technological change in these two sectors poses a challenge to regulatory institutions. What should be the characteristics of regulatory frameworks for the telecommunications and electricity industries in order to foster investment and efficiency? What influence do political institutions and the legal system have on the effectiveness of these regulatory frameworks to foster investment?
Moderator:
Francisco Guerrero Prats-R., Governor, Central Bank, Dominican Republic
Panelists:
Enrique Devoto, Vice President, National Regulatory Agency for Electricity, Argentina
Juan José Daboub, Technical Secretary to the President, El Salvador
Pablo Spiller, University of California, Berkeley
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3:15 p.m.-4:15 p.m.
Technology and Informatics: Institutions for the New Economy
It is expected that the rapid advances in information technology in recent years will have a strong impact on the competitive development of the region. Is the institutional framework ready to face the new information economy? What changes in institutional elements are needed to enable countries to take full advantage of the new economy? What is the link between regulatory aspects and the development of information technology?
Moderator:
Robert Devlin, Deputy Manager, Integration and Regional Programs Department, IDB
Panelists:
Andrés Rodríguez, Principal Advisor to the Office of the President, Costa Rica
Isaias Flit Stern, Ministry of Industry, Peru
Shahid Javed Burki, Executive Director, EMP, United States
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4:15 p.m.-5:15 p.m.
Ports and Transportation: Regulatory Institutions
The economic liberalization processes of the last few years have reduced artificial trade barriers to such an extent that transportation costs have become one of the principal barriers to trade. Furthermore, technical advances have meant that the relative importance of port costs has increased and antiquated port and customs structures have become inefficient. What reforms should be implemented to lower these costs? What has been the experience of the world and particularly of Latin America? What role should governments play in the international maritime transport market?
Moderator:
Antonio Vives, Deputy Manager, Private Enterprise and Financial Markets, IDB
Panelists:
Martin Sgut, President, Bureau of Transportation, ARLOG, Argentina
Jan Hoffmann, Transportation Unit, ECLAC
Lincoln Flor Rojas, Economic Studies, OSITRAN, Peru
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5:15 p.m.-5:30 p.m.
Conclusions and Closing
Guillermo Calvo, Chief Economist-Designate, IDB
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