 From CNN and Espanyol and I'm very happy to have a very relevant conversation nowadays on how Latin America can increase and improve its business environment to attract more foreign and local investment. Just a couple of comments on housekeeping please if you can silence all your electronic devices we would appreciate it. This session also is live stream on Facebook. I always forget the word. This session is live stream on Facebook. We're also going to open the session to your questions 20 minutes prior to the end and I will also ask you to have your headsets ready because we're going to be doing this session in English. Your headsets are over there and if you have a question in Spanish just beware that one of our some of our speakers need to take the time to put the headphones on. Without further ado we all know that Latin America needs capital to supplement its low very low domestic savings in many cases finance new industries enhance existing ones boosting infrastructure productivity and employment in the process. I have a fantastic panel to answer some of these questions and make this a productive conversation. I want to thank Ricardo Hausman in the corner director of the center for international development professor of economic development at the Kennedy School of Government in Harvard University as he says former a lot of things planning minister in Venezuela member of the board at the Central Bank of Venezuela welcome. Thank you. Luis Alberto Moreno president of the Inter-American Development Bank as you know a main source of multilateral financing for economic social and institutional development in the region a decade already Luis Alberto the IADV. Also thank you Douglas Peterson president and chief executive officer of standard and poor's global each divisions include S&P global ratings S&P global market intelligence Dow Jones indices and global plots Pearson was with Citigroup for 26 years prior roles include Citigroup Japan and country manager for Costa Rica and Uruguay so you know the region welcome. Claudia Dill chief executive officer for Latin America a Zurich insurance group with more than 25 years of experience in the banking and insurance sector. She joined Zurich insurance group in 1999 appointed CEO for Latin America in 2016. She has lived in four continents by the way Claudia so you can bring us a lot of the perspective and how you see the region with fresh eyes. She's based in Sao Paulo and last but not least Pablo Goldberg portfolio manager on emerging market debt BlackRock USA the world largest asset manager. Yes I have to say Pablo's responsibilities include amongst many formulating development investment strategies. Welcome to you all and let me start with one question. How can give me one just one solution on how can Latin America boost its economic growth through changes and adjustments in its business environment what needs to be done. I know the list is very long but a short list would be Ricardo. Well I think that if you say one thing it is the capacity to sit down and identify what needs to be fixed and that's going to be very different from country to country from industry to industry but what you saw the president of Argentina say in the plenary session he said that he's creating these dialogue mechanism so that issues can be put on the table and discussed and the issue is not how can we make foreign capital more profitable the issue is how can we raise our productivity. We need to have the discussion in terms of how can society progress and how can cooperation lead to the progress of society and that agenda is going to kick out to do list. The to do list has to come from a process that is perceived as socially legitimate. Thank you. Do you want to say something? No I just think simply to add to what Ricardo was saying the fundamental issue is how do you create this public private dialogue but more importantly we're not alone in this world of attracting investment. There's a lot of other countries trying to do the exact same thing and let me just give you a fact while you have you know the structural reforms that basically lead to the growth in productivity among others we're doing on average and countries two or three structural reforms they're tough to do but the average for other parts of the world is about 15 and so the question is exactly what Ricardo was saying but getting the kind of political coalitions that can lead to advance precisely in this area. Douglas one of the things that President Macri also mentioned was predictability to increase trust. How is Latin America becoming more predictable less predictable? Well first of all predictability is one of those factors which will attract investors will attract people to the region and is Latin America getting more or less predictable it depends on what we talk about because you have Venezuela which is in a situation that's getting less predictable and you have Argentina which under Macri is getting more and more predictable all the time with the foundation of all of the reforms that he's been making. As a region with Brazil improving in a sense that political environments going through with Argentina improving with Mexico and the US being maybe a little bit less predictable right now but some of the recent changes that took place with the energy sector opening up I think we're seeing a more predictable environment from my point of view. A more predictable environment. One of the things that Claudia can tell us with fresh eyes you live in Brazil and there's an important factor that people sometimes overlook and that's talent. In the age where people are talking about talentism as the new capital how is Latin America getting ready not only to develop new talent through educational reform but also bring in new talent. So talent is a key factor in Latin America next to the environment that needs to provide a productive environment for this talent to work in. We have a lot of young high potential talent that needs more and further education not just by schooling but actually on the job in the company so we really need to develop trainings on the job to make them more effective in an environment in a corporate environment. However what is missing to a certain degree or is very scarce is more experienced talent in certain expertise areas in particular and there we have been working on multiple different ways to try to find that talent either actually try to attract Latin American people who left Latin America and try to bring them back in a more predictable environment more be more attractive to bring them back into the region. We also brought foreigners in to help to accelerate development of younger talent but it's not a sustainable solution. We really need local talent in the end to move us forward. So we try to go on multiple different routes and I think everybody needs to do that. The state has to come up with better educational systems but the private companies have to come up with different systems as well in order to develop the entrepreneurial and also more corporate culture that is required and understanding. You touched on this subject Ricardo earlier today talent and how Latin America is in stark. It's a failing bringing good talent and we're criticizing a lot of our labor in the White House Donald Trump. This policy is well at the same time we're not acknowledging that we do not appreciate foreign talent. What else can you add from what you said this morning? I think you know Latin America always you know everywhere you go that people complain about skills shortages here and there and they always immediately say from skills shortages education or education and training but the truth is that you know the way the world tends to solve skills shortages is also through migration and in that sense Latin America has been surprisingly closed. That was not our history in the beginning of the 20th century but we became increasingly closed and the numbers are super stark. We don't realize how close we are until we start looking outside of our region. So for example everybody wants to emulate Singapore. Singapore is 40% foreign. Everybody you know in Chile they like to compare themselves with Canada, Australia. Australia is 27% foreign. Canada is 25% foreign. The U.S. is 14% foreign. In the U.S. 30% of entrepreneurs are foreign and at Harvard I can document that over half of the professors are foreign. Thank God. In Latin America the numbers are amazing. You have Chile which is not yet at 2% foreign rising and there's already some social reaction. You have a Mexico that is 0.4% foreign. That means one out of 250 people are foreigners and in Colombia it's 1 in 400. So you know it's very very hard to create you know world-class institutions, world-class companies, world-class anything and to be able to absorb, innovate and so on by relying exclusively on U.S. on locally born talent. Because based on locally born talent Silicon Valley will not exist so we are making it in unnecessarily difficult on ourselves. We want to do to grow to diversify to innovate while doing it only with locally born talent and you know the world has not found a way to do it that way. Yeah I want to add something that one of the most important topics for the countries in Latin America is to diversify their economies away from commodity dependence. And some of those ways to do it are through value added services even in the commodities themselves adding to the value in the value chain. It's also new manufacturing and very importantly services. This global services economy whether it's the kind of people that we have up here which are in the intellectual property industries or it's other types of technology. Those require investment in social infrastructures I call it in education and healthcare. And we heard about the quality of the talent and how important it is. But it's also imperative to diversify the economies and get into the growth cycle of the global economy. Pablo how do you see it when you look at emerging markets and you see this challenge from Latin America how do foreign investors look at the region nowadays? I think I really like this has to do with the first question you ask that is the question is what is one of the most important things that you need to get for the region to take it to the next phase. And Ricardo was talking about getting together and deciding collectively what we want to do, what we want to achieve. And I think the next step is how we want to achieve it and there I want to bring it to the issue of institutions. I think investment in sustainable and through time institutions are extremely important for Latin America and extremely important to solidify the way that foreign investors approach the region. One of the things that you point out is the need to get long-term funding for long-term projects in the region that is particularly low in savings. So the duration of that lending needs to go together with the duration of the project that is going to try to finance. You were talking about infrastructure earlier. But also you need to create an investments environment that stays somewhat similar for that period of time. And that is what institution brings. Because when you look at which are those strong democracies, strong democracies are those where you have alternates of power, different parties at a different time. But the institutions remains the same. The judiciary and the laws stay over time. You know, the objectives of the central bank stay over time. The way they handle the public money stay over time. Without institutions staying for a longer period of time is very, very difficult that the region will attract the long-term investment needed for the long-term development. On the topic of institutions Luis Alberto, how has the IADB helped improve transparency, strengthen institutions? Well look, first of all, the reality is that there is no quality development in any country if you have weak institutions. So building up institutions is not by degree. But on the contrary, it's basically around how you populate those institutions, the quality of people that you're able to attract, how they can work together. And more importantly how you begin to develop the set of regulations that allow institutions to really be important in regulating markets and in supporting development. You mentioned corruption. Certainly this is the one issue that is in the minds of many people in Latin America and I don't know where have problems of corruption today that are worse than before. But I can say this. We are largely today by definition a middle income region. At least 50% of Latin Americans earn more than $10 a day and that's basically the economic definition of middle income. It is not that people who are in the middle classes have changed their consumption habits, but they equally have acquired middle class values. And when people acquire middle class values, they demand more transparency, they demand a set of public services that are not simply giving you the basic coverage, but on the contrary, they want better quality and they want it now. And if you look at some of the polls, the Latin barometer poll that is typically done every year, most people are not reacting to their economic situation as they are rather reacting about issues of security. I'm talking here citizen security and I'm equally talking about questions of corruption for one. We supported the government of Chile, which President Bachelet led an effort that brought together all of the political factions of Chile to approve a law that is called the law of property and transparency. And there is a combination of laws that began with campaign finance, which basically states that campaign finance should be led by government support. It equally dwelled into the responsibilities of the private sector. And certainly the ways how you can correct the problems when the private sector enters into this kind of situation where there is abuse. And on the whole space of institutions, it's probably our largest practice in terms of what we do at the bank. Ricardo has many titles, the one that he's most famous for was being chief economist at the IDB. And he knows there, I mean we did a lot of work in these areas and continued to do a lot of work because I think it's the central most important work of what we do. Thank you. Do you touch on two topics, one of them corruption? Let me address a little bit of that. I searched a number of reports to just as a matter, as a way of context tell you what the feel is nowadays. So I found a recent CFO survey from Duke University that says optimism rebounded from last quarter historic low. This is in regards to all the break. The deft and breadth of that scandal over 100 million dollars, 15 years, bribes, 12 countries involved. I mean we can never overstate on what is the dimension of this scandal. Interestingly enough, Pablo, in the year of this scandal only 15% of firms operating in Peru, for example in Brazil, and you know in Peru or the breakfast kicked out, said they reduced planned investment spending this year, which is interesting when you try to figure out how things are going to change and how other break is changing. Talking about corruption and state-owned enterprises, Ricardo, what can we learn from countries that are in the extreme cases like Venezuela, state-owned entities like PDVSA for example, that are important to look at as lessons? I think that I would like to separate two problems. One problem is when the state becomes controlled by criminals. And then all bets are off because when the state is controlled by criminals they use the state for their own purpose and so on. And that's different from the problem of corruption that you find in government functions. So first I think that when we talk about corruption we should all acknowledge the incredible contribution that the Brazilian judicial system is doing for transparency in Latin America because if it weren't for the district attorneys of Brazil this would be going on. And we know about older brush, we don't know about everybody else and this is so like we think about countries should reduce corruption in order to encourage foreign investment this is sort of like foreign investment induced corruption which is the other opposite logic. But what I think is critical for an organization is to be able to perform its functions, its capacity. So if you think about the government the key problem is state capacity. Is the state able to do what it needs to do? Can it assure security? Can it educate its people? Can it run a health system and so on? And if it is low in capacity it will be low among other things in its capacity to prevent theft from its own agents to prevent hanky-panky in its procurement and so on. It's one symptom or one more symptom of lack of state capacity. So in Peleves in particular the government thought political control of the company was the fundamental thing. So they decided to fire 300,000 years of professional experience in the industry in 2003 and substituted with party loyalists. So since then production has collapsed, investment has collapsed, efficiency has collapsed and on top of that they've stolen a ton of money. But if you just prevent theft you don't solve the problem because the problem is that in order to run these companies you need know-how and if a know-how is not something you can expropriate it's not something you either have it or you don't have it and you kicked it out, you lost managerial capacity that led to operational disaster and to massive corruption but don't think that attacking just corruption is a solution. The solution is to build up the capacity that includes the capacity to control corruption. Anybody wants to add anything? I wanted to also incorporate another report. It's important to give some research to back these opinions especially where you're in the media nowadays. Natural Resource Governance Institute states that on a report presented at the OACD meeting last week, precisely on corruption and integrity, precisely that state-owned companies need your nexus of corruption. So when you talk about perceived risk, has it changed when it comes to state-owned enterprises? What do you say? I think there's a confusion there about what is the role of the public sector. There's a confusion where what is big state and what is a strong state and they're confused to be the same thing and they're not the same thing. A strong state is a state that can have the right rules on property rights, the right rules on defining disputes among privates like a strong judiciary. It could be a state that can do transfers between the wealthy and the poor but that doesn't have to be a big state. They have to probably apply consumer rights appropriately against big corporations. That is a strong state that is not a big state in America. There's always that confusion. And when people say, okay, we're going to reduce the side of the state because we cannot finance a deficit that is taking us into recession and to a bad problem, oh, there isn't a problem. Or you don't want the role of the public sector. Yes, you can have a strong role of the public sector without having a big public sector. You need to have the right laws and the right enforcement of the roles of the public sector that I think is very much what Ricardo was talking about. Douglas. One of the areas that I would follow up on from the discussions about attractiveness investment, anywhere you go in the globe right now even in the United States, infrastructure is one of the biggest themes for development and for growth. Countries that either have an infrastructure deficit because they've never invested or countries like the United States that have gotten way behind. In order to have an infrastructure program in which we'll make an area like Latin America more attractive, the public sector today controls most of it. Whether it's the ports, the airports, the highways, the pipelines, the electric systems. And this going back to your question about corruption or the quality of transparency and governance in this sector is absolutely critical, especially when so many countries at the same time are undertaking massive infrastructure projects. If you want to be able to attract the top global construction firms, project firms, financial institutions that are going to be required because most of the countries don't have the capital to do these programs just domestically, you're going to have to eliminate this corruption from the system. Standard was recently put out a report on some of the risks perceived in Latin America. Can you name them and one of them is political risk? Yes, so obviously in Latin America we do reports and political risk is one of those at the top. And I'll use going back to my theme on infrastructure again. One of the issues this political uncertainty that could come up is if you do a large contract to build a power plant or a system and you've got a private sector involvement in it but then the government turns around and changes the rules of the game three or five years later, this is one of those types of political risks. But the types of risk that we look at, we look at political risk, we look at also domestic quality of the institutions, we look at transparency, we look at the quality of the domestic capital markets and then we're also looking at other factors which are more traditional macroeconomic factors, growth, inflation, exchange rate convertibility, the quality of the banking system, etc. Those are the broader factors that we look at when we're analyzing investment and risk in Latin America. Anybody want to say perceived risk for you, Pablo, for companies looking long term into the region right now? I think political risk is very important. Just this weekend, everything that happened these last few days, you got the fire of the Ministry of Finance in South Africa that led to S&P putting South African investment. You get the contested elections in Ecuador. You got the 360 movement of the Supreme Constitutional Court in Venezuela about the role of the assembly. You get the demonstrations here in Buenos Aires last Saturday in support of the government. So these political risks are very important when you're thinking about investing in the region. I'm talking about emerging markets. In general, Latin America is very, very particular. Countries have become more predictable. Countries are going to see long-term financing at lower rates and are going to generate more growth. And probably it's going to be the countries that are also going to be attracting most of the good talent. Can I follow up on that one second? Please do. Because one of the cycles of dependency, so to speak in the political risk is also when you get into a situation where the political risk is so high, whether it's through corruption or subsidies in a case like Argentina, you ended up with a hyperinflation which then turns into political risk and social risk. You have a hyperinflation. You can't keep up the payments or increases that people expect in their wages. It creates an expectation from the population that they're falling behind or they're actually not able to even pay their rent and buy food because the inflation is so high. But what was the cause of the inflation? There's all these factors at the end of the day end up being interconnected. Thank you. One of the other things that Alberto mentioned earlier had to do with institutions and expectations from the people. I was wondering how important has it become for predictability the managing of expectations, communicating so that the companies can operate and people can leave in less unstable economies, communicating a path from governments into the private sector. How much has managing expectations in countries that have governments that have win elections by only very narrow margins? How has that become increasingly important and governments reacting to that same as the private sector? What would you say? Well, first of all it is not unusual to find more and more elections to be won by small margins. I think that's largely a phenomenon of the world. It has to do with deep seated divisions across political parties in ways that societies look at the direction a country needs to take. Having said that, the art of governing is precisely trying to find a consensus in the differences and trying to move agendas forward. The other thing is that we underestimate what's very interesting in Latin America is the profusion of social media and the connectivity that today exists across Latin Americans. In a country like Brazil, the average Brazilian spends more time using social media than the average American in the United States. The numbers of cell phone penetration and especially smart phones is growing significantly. We have something like 110% of cell phone penetration but we're now about 50% of smart phones. And I don't have to tell you, look at the numbers of people on Twitter. We know everybody talks about the tweets of President Trump. But you go across Latin America and look at the Twitter feeds of heads of state are some of the largest in terms of subscribers. That tells you something about the evolution of society. It has to do with the fact that we still have a demographic bonus. The average age of Latin Americans is 27. But certainly this sense of disclosure and openness of government is something not only people claim but I think it's a path towards precisely getting the kinds of transparency and as a result a beginning of management of expectations that can be used through this media. Let's go to rewriting or rules being rewritten outside in the world. As you know today President Trump and President Xi Jinping are meeting in what some people call the Winter White House. Mara Lago, Florida and whatever they decide is critical for our countries in Latin America. Having said that do you think companies need to prepare to do business in a world that is de-globalizing their investment conditions go accordingly? What is your assessment so far on what's happening? I'll start. First of all you have to learn how to play golf. This is now a very important skill with Mara Lago being the Winter White House. But more seriously I take a view and this is what we see in terms of capital flows and flows of goods and service despite some of the nationalistic tendencies and populist tendencies that we've seen crop up in different elections and even despite Brexit the world is globalized. It's not going to be very difficult to go backwards partially because of what Luis Alberto said about social media. Social media does not have borders. That doesn't mean that somebody doesn't just watch what they want to watch but social media is borderless as well as goods and services are now becoming more and more borderless. If you look at the supply chain of automobiles now they're parts coming from Japan and Korea and Germany and Austria and Czech Republic going to Mexico back and forth between the United States before an assembled car is delivered in the United States. You're not going to go backwards on that. This is something that despite some of the current political tendencies it's going to be very hard to de-globalize. Please? A couple of things on this. I think the world will continue. Yes, there are clearly winds of protectionism in the industrialized world today. Let me give you an example Doug was in our annual meeting last week in Paraguay. We produced a report that basically says that without any additional trade agreements Latin America could benefit by doing a couple of things. First of all by converging the rules of origin of all our trade agreements. Rules of origin basically determine how a product is considered made in Argentina or made in Brazil and those rules change from country to country. So the convergence of those rules allows to something that Ricardo has written a lot and studied a lot which is basically how you begin to develop value chains which we live in a world like Douglas was saying before where it's not that you produce the entirety of a product in a country but rather on the supply chains. There's other areas like agreements that have not been met. We have this today and tomorrow as President Macri was saying earlier a meeting to try to converge the so-called alliance of the Pacific with Mercosur. This would be huge. The other part is even though you can have all the right trade agreements you still have what we call a software of trade that has not been sufficiently developed. And that is the time it takes to bring export or import products in a border of a country. And there what we have been doing is what we call single windows that in essence they converge all of the different entities that a government puts in place, the customs, the phytosanitary, etc. Put that all into electronic information and that way it accelerates the trade. We're now looking to see for instance in the alliance of the Pacific countries how those electronic windows talk to each other. And we're doing that equally between Argentina and Brazil. Doing things like the Terminan which is the single you know there's companies that trade a lot understanding those companies and how they as a result of being known by two sides of the export equation can have in essence a fast track. These kinds of things without doing additional trade agreements would go a very long way. We equally put in this report for instance where there is no trade agreements between say Brazil and Mexico which would really create a big space. So in some yes the world can change but I think nobody can stop and I think this is the real opportunity in my view for Latin America. Thank you Ricardo. Two things. First I'm not comfortable in predicting that the US is going on a protectionist ban. I know that Trump has said a bunch of things and we know that he says whatever. He's unpredictable so you know it was obvious that he was going to repeal and replace Obamacare now it's not obvious that he's going to repeal there are many areas in which it's just too soon to tell which direction it's going. I don't see a political grounding in the US for a protectionist policy. He doesn't have the votes in the Republican Party. I don't see that he has the willingness on the Democratic Party etc. So he can use his presidential authority to stop deals but I don't think he can undermine those. I don't think that the votes are there for a change in that direction but more importantly I think that Latin America has done enormous progress in trade policy and compared to the progress in productive development policies. So you know we've opened up markets say Colombia has opened up the US market free trade agreement with the US. What has happened to Colombia's exports to the US? Nothing. So essentially while Mexico in the first ten years of NAFTA it's like quintupled its exports to the US in the first x years of Colombia nothing is happening and that's not because they faced high tariff or trade barriers it's because they don't have the supply capacity. So that's why we need to focus the region on developing our capabilities, our productive capabilities moving into new industries, moving into new areas, figuring out how to involve the companies that have to know how the capacity to get us into those areas and have the productive dialogue that we need to make these things happen. I'd say that that area is much more important than for example there's I don't know what percentage but something like 30% of the exports of Mexico to the US are down outside of NAFTA because if you go through NAFTA you pay 0, if you go outside of NAFTA you pay 3% but if going through NAFTA is too complicated you might as well pay your 3%. So it's not that if NAFTA is changed costs are going to differ that much compared to the amount that the peso depreciated after Trump won the election. So I think that the fundamental driver for us is still to worry about our productive development policies and I don't think that these trade margins are big enough to make a difference. But then isn't it the perfect time to improve and reduce the cost of doing business and by that I mean for example just citing the World Bank doing business paying taxes is complex in Latin America the cost is still an issue. For Argentina it's still one of the main deterrents when it comes to bringing more investment when we're talking about boosting investment, boosting economic growth. Pablo? I think that there's something quite ironic about globalization and this meeting that Trump is having with Xi Jinping it is very interesting because the idea of globalization was something that started in the developed markets. It didn't start in the emerging market. I mean the developed markets were trying to push emerging market to open up to the rest of the world and it is very interesting that this anti-globalization move with Brexit and some of the vote in the Rust Belt States for Trump is trying to say well this has not work for us. This has not work for the developed markets but for the emerging markets particularly for Latin America this has worked very very well. I mean the millions of Brazilians that move from poverty to the middle class the millions of Peruvians that move from steam poverty up in the world chain is significant. So it's not surprising now that you have China being kind of the spokesperson for free trade and on the other hand you have some of the at least Trump whether he will continue or not with this trying to talk about some anti-globalization issues I think that this is very ironic and I think that this is not possible to go back in the globalization path. Now with taxes it's a very important part of the story because one of the things that Latin America has always been dealing with is very low tax compliance and at the same time a significant provision of public services and they do go together. The fact that people believe that their taxes are not worth what they pay because they don't see anything back. People have to have their kids sent to private school have a private medical insurance. I think that's going back to the idea of development institutions corruption really making the people feel the worth of paying their taxes make something. That is actually joint work between the public sector and the private sector. Anybody else Douglas? The point is also the role of society the role of the people we talk a lot about the state the government we talk a lot about private corporations and their role what is the role of society. I mean in Brazil people for a long time have accepted corruption. People today in Brazil don't accept it anymore they want this to be changed. So in the end governments private corporations and civil society people all of them have to push in the same direction. And then we talk about the complexities of changing Latin America. If actually society is changing and putting a different type of pressure on the companies on the governments there will be a different time of momentum that can be built for change. Thank you. I'm going to open the session to some questions. I don't see the microphone but if somebody please has a question just raise your hand and just try to make it brief so we have time for no questions. Go ahead. Thank you very much Bertrand Badré I was managing director of the World Bank until last year and I'm now creating a company to invest in sustainable development in Latin America. I think that's one of the teams that was mentioned at the very beginning but I think as part of the underlying trends there is not only Trump and all these things but you still have a very peculiar interest rate environment in the world and you also have a growing interest for sustainable investment. So it's still minority but it's growing so I do believe that Latin America has a potential to be one of the areas in the world where these things can materialize. With the interest of investor can materialize provided we create a real ecosystem there. I think we have everybody on stage. I mean the development bank, the rating, the insurers, the insurance investors. How can we move to the next stage? Thank you. I would say that how to move to the next stage I think it's very important for emerging markets in Latin America in particular not to waste this opportunity that we have right now. Some countries not all have wasted the years of the commodity supersize. Some countries have invested very well. Take what we do for one case to really, really do well and generate a very solid development structure with commodity prices. But now that is gone. Countries have adjusted to new level commodity prices and better than others but now we have this period of still lingering low interest rates and this means that there's significant amount of capital looking at the emerging markets for interesting projects, interesting ideas. There's a lot about how not to waste this opportunity and creation of institutions cleaning of the judiciary, reduction of corruption but it's also very, very important to promote. And I think that sometimes emerging markets do not do enough to come out there and promote the good things that they have and there I think that allowing probably some more foreign participation into some of these domestic market is quite important. It's happening in the capital markets but there's still some areas of the economies where foreign investors cannot come with all their technology, all the know-how to try to generate the necessary development and then on what it comes to microfinance and all the sort of more development, more smaller type of products. I think they are the roles of development banks and the public banks in the countries are crucial. But there that is kind of like second stage. You need to stabilize these economies and in some places what you do, you have to create a funding to go for those kind of projects. I mean, deepening of financial markets is very, very important. Dissemination of information is extremely important so creation of good databases for creditors is extremely important. But that takes time and I think that in some countries are way more advanced than others. Chile is more advanced than other places but that is the process that countries should take. What I'd add to that is that when you look at the development of local capital markets, let's say that's something at the end but to get there you need to have all of these conditions we've talked about. You have to have financial standards, transparency standards, independent standards for governance, for oversight boards of directors, you have to have an auditing system in the country and I think it is a really high quality goal to have for countries to develop local capital markets because of all the steps it takes along the way benefit not just the capital markets but the entire society. Thank you. We had another question in the back. Good afternoon everyone. I'm a global shaper from Tegucigalpa, Honduras and since my country is a developing country and we have really good foreign investments in the manufacturing sector but I feel that we are not growing or having foreign investments in an integrated way. My question would be what would you recommend to a developing country to have integrated economic growth? What would be your recommendation for a developing country? If you allow me to just get one more question here and yes over there so we can have, we only have less than 10 minutes. Who's next? Thank you over here in the center and then we go there. Hi Duncan Wood from the Wilson Center. There was a brief discussion of corruption and odor break earlier on and many of us have celebrated the discoveries and the investigation but there's a cautionary tale as well there. I think a lot of people across Latin America are looking at the odor break scandal and Brazil in general is saying we don't want to open up the Pandora's box because that's going to create an adverse investment climate at least in the short to medium term. I'd be interested in hearing your reactions. Thank you. Over here please. Go ahead. Thank you. Hello. My name is Andrea Costales. I'm from Quito Ecuador and I represent the global shapers. My question is what is your point of view for the countries like mine when every year we see the government more as an obstacle for investment? What should we do as a private sector? What should we do as entrepreneurs? What should the private sector do when we have all the negative scenario coming from the government? Thank you. Any more questions because I'm going to close it so that, okay, one less here and we close the question session. Hi thanks. Vivian Liu from Singapore one of the YGLs as well. My question is what does Latin America think of or what role would most in Latin America think of Asia playing in your economic development going forward? Asia? And in particular South East Asia not just North Asia. Did you get it? Yeah. Okay. Thank you. So we have five minutes so whoever wants to start answering the questions from the cautionary tale of the Odebrecht case to obstacle for investing governments being perceived as that. Go ahead please. Look in the case of Honduras as we all know is one of the poorest countries in Latin America. They have a very interesting thing that the Honduras Congress and the government approved which was to create a zone kind of aligned with very much of what special zones were developed in China where you have special security rules, different labor laws, etc. I think that today the opportunity for a country like Honduras is to try to insert itself into the whole system of value chains that are part and parcel of NAFTA and this means integrating itself better with Mexico. Why? Because Honduras will continue to be at least for some time a low cost producer and this can allow them to begin to integrate into areas that historically they haven't. If you look at the production capabilities that Honduras has today and the type of exports that it does beyond pure commodities is largely around textile and apparel. But this can be broadened and the way to broaden it in my view is to integrate itself more into clearly what can happen with the North American market and for that matter with the rest of Central America. I would take the question on Asia very briefly. Asia is a very rapidly growing region in many ways not just from an economic growth but also population. It is a consumer of the quantities which are produced in abundance in Latin America. I believe having the approach to trade agreements, the TPP if that can continue as part of the way for Latin America to be closer to Asia that's important. But I'd add another element which is find some of the best models and Singapore is one of the best models where there's been a incredibly high savings rate, investment in infrastructure, investment in education, as well as a not corrupt public sector. The salaries that are paid to the central bank governor to the minister of finance are higher or as high as wages paid in the public sector. They've been able to build a system which is relatively free of corruption and I would also look to countries like Singapore as examples of development models that have worked incredibly well. Thank you. Go ahead. Maybe on the question on integrated investments. What I do see is governments as well as companies that work in silos. You talk to one minister talking about something, the next minister talking about something, not integrated enough in the government, not integrated enough is in companies. So where I think we need to start in order to make integrated investments more effective and actually happening is governments and also private companies working together but also within governments, within companies, within industries to get away from the silo culture that we seem to like as human beings. In the last minute, well two and a half minutes but last minute, cautionary tale that comes along with the other break case, how would you Ricardo? Well I think we learned a little bit like in the relationship between the region and drugs. That you know they were really just exporting them, they were not really part of us so if you disrupt them it will be violence and so let's coexist with it. So a little bit the idea with other brushes, you know corruption, hanky panky has always been there so let's coexist with it. I think that this is a watershed event and there's a before and there's an after and we have to get to the after as quickly as possible but we cannot assume that now we don't know that the way infrastructure has been built has been you know accompanied by massive massive corruption and that by the way probably other brush would say well we were competitive on the bribing side so like a market equilibrium so it is a practice that we somehow need to get hold of in a way that doesn't just stop investment, stop infrastructure construction but I think we have to face the reality and we have to get to the other side of the watershed event. I think here technology has a big role to play. Now you can make the beating process very public, you can make the costs very public and you can make the payments to companies that contract public works and the advancements of the project very public and so the technology can be a lot of help to allow for that to happen. Now that means that governments have to accept that they want to do that and that has to do with the financing of politics as well. This goes two ways, I think Clare was very well, this requires more and more pressure by the people and people want to know where the money is going and what we saw in Brazil what we saw last weekend in Argentina is I think it's a reflection of that. We've seen in Guatemala also for example, we only have half a minute to say thank you for a dynamic conversation and thank you also for being here this morning, I hope it's a productive meeting for you too. Have a good afternoon. Thank you.