IDB President Luis Alberto Moreno on 2008 APEC CEO Summit Road Show
IDB President Luis Alberto Moreno on 2008 APEC CEO Summit Road Show
Speaking at the 2008 APEC Road Show event in Washington D.C., Luis Alberto Moreno, Inter-American Development Bank president, invites to take a new look at the trans-pacific region and its potential for successful partnerships and role the IDB plays as a business facilitation platform.
*****As Prepared for Delivery*****
Thank you all for being here today. Let me start by thanking my friend Eric Farnsworth, Vice President of the Council of the Americas for his kind invitation to talk to you.
APEC 2008 - an opportunity to highlight the role of Latin America as a strategic partner
My main goal today is to highlight the importance of the Peruvian Presidency of APEC 2008 as a unique opportunity to showcase the role of Latin America and the Caribbean as a strategic partner for Asia. At the IDB we feel truly privileged that one of our most dynamic regional members will host the next APEC meeting and we applaud the Peruvian leadership.
I believe that our region is a strategic partner for Asia and that there is great potential to deepen our interaction in the years to come. Indeed it offers an environment of sound economic growth and openness to trade and investment, which in turns create valuable opportunities for governments and the business sector.
The region is prepared and ready to take on this endeavor. Instead of shying away from the challenge posed by the emergence of Asia, Latin American and Caribbean countries are increasingly embracing it. They are convinced that the deepening of trans-pacific relations holds the potential to deliver promising results for both regions.
Trade, investment and remittances flows between regions have intensified recently
- In 2005, total trade between LAC and APEC (including the U.S.) amounted to US $608.3 billion;
- Between 2000 and 2005, LAC exports to APEC grew at an average of 10.3 percent;
- In 2005, Chilean, Mexican and Peruvian exports to APEC represented in all but one country (Chile) more thank half of total exports to the world.
Even more impressive, in my opinion, is the fact that APEC is becoming a springboard for boosting foreign direct investment.Total world FDI to the three Latin American APEC countries (Peru, Chile and Mexico) totaled around US$ 30 billion in 2006.
Natural resources and energy may boost trade and investment complementarities
There are numerous trade and investment complementarities between the two regions, particularly in the natural resources sector. The Latin American wealth of hydro, oil, gas and coal resources is well known and it offers a great potential for investment.
Not only our region is the world’s most important supplier of natural resources such as iron ore, cooper and gold, but it is also an energy superpower housing close to a quarter of world’s hydropower potential and natural gas reserves larger to that of China or India, which are industrializing fast and are demandeurs of energy and natural resources.
The private sector is a driver of intense bi-regional relations
I also see a new generation of Latin America and Asian business and political leaders that are betting on bi-regional relations. Indeed, Asian corporations are building strategic joint ventures with Latin American partners. For example in Peru, a LNG project with a total investment of $5.2 billions is led by a consortium of Hunt Oil, Repsol and SK Corporation from Korea. International Asian brands like Samsung and Toyota are becoming more familiar in the region, and companies like Daewoo have already built manufacturing sites in Central America.
Interestingly enough, Latin American multinationals known as Multilatinas have initiated inroads into the Asian market. Two examples representative of this trend are: the Brazilian Banco Itaú which is opening a branch in Tokyo; and the Argentinean Tenaris’ acquisition of 51percent of NKK Corporation’s seamless pipe mill.
I have no doubt that the private sector will continue to be a driver of intense bi-regional relations. One area that I feel has a great potential is trade in services such astourism. This sector may be boosted by the expansion of bilateral business contacts and the establishment of new bilateral integration agreements. Asia may also become a key source of investment for infrastructure development projects. Mizuho Corporate Bank, for example, was appointed by the Panama Canal Authority to provide financial advisory services for the Canal expansion.
The IDB as a catalytic partner that facilitates trans-pacific relations
I would like to briefly explain how the IDB has been supporting trans-pacific relations, in particular through the work of our Integration and Trade Sector, well before Asia became a fashionable topic around the world. For instance, with the support of the Office in Japan and INTAL (Institute for the Integration of Latin America and the Caribbean) in 2002 we launched jointly with the Asian Development Bank Institute the LAEBA Network as an inter-regional mechanism to link the policy research community working on trade and investment issues with policymakers and the private sector in both regions. Likewise, the recent IDB report “The Emergence of China: Opportunities and Challenges for Latin America and the Caribbean” generated an important policy dialogue on the utmost importance of trans-pacific relations for our economies.
With regardsto APEC 2008 the Bank is providing technical and financial support to the Peruvian APEC Presidency. Our technical teams are actively working with the Peruvian government on an analysis on the potential for increasing FTAs “convergence” in the APEC region. This study will be presented at the APEC Leaders Summit in November. The Bank is also working with the APEC Business Advisory Council (ABAC) Secretariat to support the APEC CEO Summit in Lima to be held the same month. Finally, we are also planning to host our annual LAEBA event this year (jointly with the Asian Development Bank) in Peru.
Finally, I want to stress of the role of the IDB as a business facilitation platform that is already generating tangible results. For example, last September, we supported the KOREA-LAC Trade and Investment Forum 2007 where more that 300 business people and representatives of export and investment promotion agencies from both sides of the Pacific gathered to do business. Agreements included a program through which the IDB and the Republic of Korea will continue to fund technology projects in LAC, and the implementation of an Asia-LAC business forum to enhance business matching, contact development and, ultimately, trade and investment deals between both regions. The Bank will organize the next Asia-LAC business Forum in Tokyo.
The IDB stands ready to redouble its efforts to support the deepening of trans-pacific relations. I invite you to take a fresh look at the region and to help us realizing the full potential of this strategic partnership. Thank you.
