During my recent business development trip to Spain to represent MIGA at a forum on Latin American port infrastructure organized by Tecniberia, I had an opportunity to see with my own eyes and appreciate the great achievements made by many Iberoamerican nations.
One remarkable point in the still-young economic history of the 21st century is the “decade of sustainable prosperity” in Latin America. The region benefits from one of the longest growth periods in its modern history, with only Chinese and other emerging Asian powers jeopardizing its first position at the imaginary podium of the 21st-century economic empires.
It seems that Iberoamerica has finally managed to break its peculiar Malthusian trap (short periods of booming growth followed by deep recession) in which it fell again and again throughout the 20th century, and has seriously taken a sustained path of progress.
However, there are no grounds for complacency and passive contemplation of what has been achieved in this prodigious decade. Iberoamerican leaders and governments have to continue consolidating their economies, eradicate any poor past practices, and acquire new human resources and technical infrastructure. This will help them position their countries among the most advanced nations of the world and diminish the immediate risks of a slowdown in global growth.
The region is still facing evident challenges: the strengthening of the middle class, reduction of income inequality, exploitation of vast natural resources, and the engagement of minority groups or aboriginal majority in political and social life. Enrique Iglesias, head of the Iberoamerican General Secretariat (SEGIB) and former president of the Inter-American Development Bank, recently pointed out that "Iberoamerica is not going to have it easy going forward. We are no longer sailing with a favorable wind and we will have to use our own engines—sometimes the wind will even be against us...We have to start thinking in these new terms."
In this process the World Bank Group can play an impartial role by offering knowledge, technical skills, finance, and risk protection. It can support Iberoamerican countries in their efforts to reach higher levels of well-being and to fine-tune good practices to fulfill the increasing demand of the young Iberoamerican middle class.
The need for Iberoamerican investments and infrastructure is extremely high. During the aforementioned forum the ambitious plans of various Iberoamerican authorities were shared and the astronomical sums they require were revealed. Brazil alone is planning to invest more than USD 5 billion in the development of port infrastructure during the next 10 years.
Investing in infrastructure is fundamental to regional integration (an obvious target given the market potential of more than $ 7 trillion in value) as well as increasing Iberoamerica’s external competitiveness as it seeks to take its place in the rebalancing of the global economy.
To achieve these ambitious goals, it is essential to mobilize huge amounts of international capital since national savings alone are insufficient to finance these development plans. This is where the role of MIGA as a catalyst is essential. MIGA´s Iberoamerican shareholders can access the agency’s risk-mitigation instruments to buttress capital flows that are in line with the highest environmental and social standards. This is particularly important for a region that suffered the consequences of speculative capital in the last decades of the 20th century.
MIGA has a relevant role to play in the economic life of Iberoamerica during the next decade. It can assist these countries in realizing their ambitious infrastructure plans—contributing to long-term prosperity of the continent.
To paraphrase the great Peruvian poet César Vallejo: there is, Iberoamerica, so much to do.