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Analysts urge long-range, central role for private sector to achieve competitiveness in Latin America

Economic analysts have urged a central role for the private sector, a long-range view by government, a regional approach and an alliance of many sectors of society to enable the countries in Latin America and the Caribbean to compete in the new economic framework of the 21st century.

The analysts, speaking at a workshop of policymakers and experts at the Inter-American Development Bank on Monday, said greater productivity for the region was necessary to overcome the unimpressive economic performance of the 1990s and the persistent poverty and inequality.

IDB Principal Economist Eduardo Lora, the opening speaker at the IDB workshop on Competitiveness and Consensus-building, said successful competitiveness must have continuity from one government to another, with the private sector playing a leading role.

About 100 competitiveness experts from government, the private sector, universities and specialized institutions joined IDB economists and executives attending the workshop.
“The success of the strategy will depend on accountability of the public and private sectors,” Lora said.

Harvard Professor Michael Porter, head of the university’s Institute of Strategy and Competitiveness, also stressed the need for a long-term effort to build competitiveness, which he called “a marathon, not a sprint.” Porter’s presentation, in addition to being part of the competitiveness workshop program, was also one of the regularly scheduled lectures of the IDB Forum of the Americas series.

To illustrate his point, Porter attributed the success of Australia’s wine industry to a 70-year effort, beginning with an increase in local wine consumption during World II, a trend that was followed by the establishment of a winemaking school and cooperation among producers. It was only in the late 1990s that the industry reached a point where it became a large foreign exchange generator, he noted.

Porter said many institutions, such as universities and business associations, are involved in competitiveness, and he stressed the need for attention to microeconomics and production “clusters,” which are industry or service activities in close proximity that enable an economic sector - such as shoes, textiles, plastics, or information technology - to gain access to skills, markets and services that lead to a stronger and more competitive sector nationally and globally.

Roberto Artavia, rector of INCAE, a graduate business school in Costa Rica, moderated panels during the workshop that examined competitiveness achievements and issues in Brazil, Chile, Colombia, Costa Rica, El Salvador, Ireland and Mexico.

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