 Ladies and gentlemen, before I have the honor to make the opening for the clothing, allow me to say thank you. Thank you first and foremost, of course, to you for your anti-engagement over this summit. But of course, thank you to our very generous host state, thank you to Mexico. And allow me to say also thank you to the many teams who have been engaged in the run-up for this meeting, during this meeting and of course in the dismantling as well. Thank you to all the teams under the leadership of our regional director, Marisol Agüeta. Thank you, Marisol. Ladies and gentlemen, after hard-working days, we are coming out of this meeting full of hope in regard of Latin America's future. And of course, we know that this future depends on pushing forward Latin America's reform agenda. And this agenda rests on three pillars. First, strong institutions. Second, a sound economic strategy. And third, a well-engaged middle class. Strong institution means institutions that are transparent, agile and credible. Institutions that are fighting against corruption as well as criminality, so that reliable governments can foster the trust of residents. Second, a sound economic strategy means an economic strategy beyond commodities. It means investment into infrastructure for the mobility, trade and tourism. And more and more important, investment into infrastructure of energy and particularly digital infrastructure for connectivity and access. And third, we have to meet the middle class expectations. That means jobs, skills, training, education for the next generation for the youth. That means empowerment of the woman. And at the end, the message is very clear. Equal opportunities for all. Because ladies and gentlemen, it is the middle class that shapes Latin America's future. And ladies and gentlemen, yesterday we had the opening with a public sector with three respected heads of state who shared their vision. And now I would like to turn to our private sector champions, to our co-chairs, Excellencies, who would like now to know what is your vision for Latin America, what is your take away from this regional summit. So thank you very much. It is now my honor and pleasure to hand over to our today's moderator, Professor Andrés Velasco. Thank you very much. Thank you very much, Philip. Thanks again to our Mexican hosts. Thanks all of you for being here. We know you could be at the beach. You're not. You're here. We appreciate that. Congratulations. Well, Philip tells us we should be optimistic and we will try our best to be optimistic, but we also want to be analytical and try to go beyond the surface of some of these issues and get some new ideas ideally on the table. I was asked to provide a very brief summary of what I've heard, what the ethos is, what the concerns are, and what the hopes and expectations are at this meeting. And at the risk of oversimplifying and following with an idea that we should always go in threes. Let me put my three points on the table, which I'm going to call upon our panelists to discuss, elaborate, and perhaps disagree on. First, in Latin America, we face a renewed growth challenge now that the commodities boom is over, now that the period of extraordinarily low interest rates in the rest of the world and the rich world is beginning to end. And last but not least, now that it is not so fashionable as it used to be to invest in emerging markets. A few years ago, people were falling all over themselves to bring money to the Mexico, Brazil, Peru, Colombia, Chile's of the world today, investors are looking elsewhere. So the question is, how do we grow? On the basis of what do we grow? What's the role for industrial policy? What's the role for renewed productivity? How do we reignite productivity, et cetera, et cetera, et cetera. That's, I think, the big economic challenge. Second of all, in spite of a decade or so of economic growth, Latin America remains a very unequal continent, a painfully unequal continent. And here we can see the glass half empty or half full. On the one hand, some countries, not all, have made some gains. We see genicoefficient falling, different indicators of inequality beginning to budge after decades of immobility. But at the same time, we remain aware that inequality is still a big, painful fact present in our lives. And so the question is, what's the next stage in this battle? Some countries, for instance, have relied on cash transfers. Mexico was a leader, but not the only country. That's one policy tool. Maybe we want to look for other policy tools, their issues of other inequalities, not simply the inequality of income, their gender inequalities, regional inequalities, inequalities of access to opportunities, inequalities of political power. It is time to address those two. Last but not least, institutions. In any serious meeting, one has to utter the word institutions, so I've done it, institutions. The problem is, institutions in Latin America today are under challenge. If you look at polls in country after country, not only are governments losing the popularity contest, but all kinds of institutions, including political parties, the Congress in some places, the judiciary, private sector institutions like business associations or bankers, traditional institutions like the armed forces, even more traditional institutions like the church, all of them face challenges of credibility, of legitimacy, their approval ratings are down. So yes, institutions are important, but a lot of Latin American citizens don't seem very happy with our institutions. What do we do about them? How do we go beyond the headline and carry out sustainable political change, institutional change in a way that makes these institutions more credible and also more effective at the time of phasing people's needs and tackling the region's challenges. So that's my contribution. I invite our stellar group of panelists to talk about these things, and because I'm an economist, I am going to begin with the economy. Carlos Limes here, a man who knows about productivity, who knows about business, entrepreneurship. What's next in this post commodity boom, post EM fashion boom? How do we grow? What do we make? To whom do we sell it? And what are the roles for innovation and technology in all of that? Big topic, small time, two and a half minutes. Thank you very much, Andres. I would like as well to take the opportunity to thank again the World Economic Forum, particularly to Marisol for inviting me to have the honor of co-chairing this event. I think it's very important that we understand that we are living a new era. And a new era has new paradigms, has new opportunities, new risks, and particularly new challenges. We are in an era that is transforming the way we traditionally do things. We are in an era where the biggest bookseller chain doesn't have stores, in an era where the biggest school doesn't have classrooms, which is Khan Academy. And we're living in an era that is transforming the way we do things, the way we live, and particularly the way we should approach to the solutions. It's an era, as the others have been happening, that we are very confident that we'll bring a lot of opportunities. And particularly, it's an era that is bringing access to everything. It's giving us access to entertainment, it's giving us access to more information, but it also is giving us access to have better connection to better education, better health, and particularly doing it in a very large scale. It's an era where the services are the biggest growth on employment demand. And it's an era as well that for some of our countries, co-exist with the other three eras. We in our societies have the agricultural, the industrial, and these new technological or access areas. It's an era as well based on the ICT, on the information and communication platforms and infrastructure. And I think the important discussions around all the different topics that we share is how can we make this transition faster, better, and more inclusive for the societies. It's an era that in these main infrastructure requirements, needs, and demands a lot of investment. And at the end, as Professor Stiglitz was saying in his opening remarks, it's an era that needs to boost employment so we can fight this inequality and keep building the middle classes in a much faster and much stronger ways. Thank you. You mentioned inequality. So in the opening round, let's move to that and let me address this question to Angelica. Angelica, you've devoted a good deal of your career to promoting women's rights and addressing gender issues. And in my mind, at least, and I suspect you're going to agree, gender inequality cannot be separated from broader issues of inequality. In particular, if we look at poor households across Latin America, many of them, in some countries, the majority of them, are households headed by a woman who has very limited access to childcare, she has difficulties going out and getting a job because she has no place to leave her kids, very little access to training, that woman, if she gets a job, she's often discriminated at the workplace. How do we marry these two agendas? How do we think about, for instance, employment promotion with good quality jobs for women as an inequality fighting agenda? Let me address this. Of course, it's known to everybody that we live in a region that's very unequal. I would like to state something that Professor Stiglitz said yesterday at the session of From Poverty to Prosperity. He said equality is a positive impact variable for economic growth. As you were saying, I will, of course, address this inequality on a gender perspective. I would like to mention some studies that have been done for the last 10 years, at least, by institutions like Goldman Sachs, Booth & Company, by the IMF, where they state that if we bring the labor workforce to the same percentage of women and men, today is 52 versus 80 men. If we bring women to that 80% inequality with men and the labor force, understanding that in the beginning, at least a third of the women would work only part-time, which is about 60% of full-time. Understanding the productivity would come down because it would be the first time they would come into the labor force. GDP in the region could increase up to 17%. So this is great for economic and social growth for the region. I know that this is an all-inclusive conversation for both the private and the public sector. It's good for men and women alike. It's not just good for women. It's good for societies. And we need public policy set in place. We need better daycare. We need paternity leave as well as maternity leave, not just one and or the other. And we just need basically to reduce the barriers for the labor force to come into place. And then the private sector needs to implement both public policies. But then again, today, we don't need loss for the private sector to implement home office, flex time, infrastructure for breastfeeding. And that is also good for men. It's not just good for women. So we need family-oriented frameworks within the corporations that we can put in place today without having to wait for any public policy to change. And we don't need to get lost in understanding the progress in equality in gender. Equality needs just three basic things to focus on. We need inclusion, development, and equal pay for equal work. Inclusion indicators where ratio of men to women and the participation participating in the workforce. We need development indicators where we can have a ratio of men to women on education and in performance. And of course, equal pay for equal work must be a rule that has to be set in place before all of this can happen. Thanks very much. And let me pose a precise follow-up question to Joe, because Joe is also somebody who's spoken very eloquently about inequality. But following up on Angelica's remark, if we're going to take seriously the fact that in most Latin American countries say only 40% of women of working age have a steady job, we have to think about issues like flex time, which you mentioned. That agenda is sometimes politically controversial, because more traditional segments of the left, for instance, think of flex time is potentially a threat to say job security. So in Latin America over the last few years, there has been a renewed emphasis on redistribution. That's a good thing. But the bulk of that emphasis is basically centered on tax and spend. And of course, the state is going to need more money. I myself came out in Chile recently in favor of a tax reform. So check on that. But then the more interesting question, or the more difficult analytically and politically, is what do we spend that money on? How do we square the circle of carrying out these policies very effectively inclusive in a way that requires changes in the labor market, for instance, that are not always politically easy to carry out? And what else is in that agenda that should be there that we're not talking about, Joe? OK, so first I want to emphasize that we need to go beyond the redistribution agenda, beyond that's important. But there's a real agenda here about the before tax and transfer incomes, the distribution of market incomes. And in a way what Angelica said really highlights that issue, that all of our societies have been marked by a lot of discrimination. And that means that some of the inequality is a result of the fact that we are discriminating in ways that both have exclusion, but also the wages are lower, the ratio of the wages. It's not just women, gender. There's also ethnic racial discrimination. So that's a way in which we can get stronger economic growth at the same time that we get a more equal society. Particularly important in this period, following up on your first question, even if the country's reform growth may be slower now that the commodity prices aren't as high. So the overall framework, I believe, is that you can address the issue of inequality and grow more rapidly. That equality and growth economic performance are actually compliments, particularly if you go beyond GDP as a measure of economic performance. I chaired International Commission on the Measurement of Economic Performance and Social Progress. And our commission agreed unanimously that GDP was a bad measure. It didn't include aspects of quality of life, family life. It didn't include aspects of inequality. So if you go beyond that narrow measure, especially, we can do better if we have more equality policies. But let me mention a couple of other things relevant to what's been going on, particularly here in Latin America, but also elsewhere. One of the big reforms here in Mexico has been competition policy. And competition policy, we were talking before, actually has many aspects. It actually spurs economic growth. And it lowers costs. And because of real wages, standards of living are affected both by the nominal wage and by the prices. If you lower costs, it's like the same thing on electricity, you increase standards of living. There's a second thing, though, which is things that we haven't been doing, still not on the agenda strongly, particularly here in Mexico, is raising the minimum wage. The minimum wage is not at a livable wage. I think it's like $5 an hour here in Mexico. And raising that minimum wage raises wages all the way up the scale. I feel I can say this because in the United States, we also have a real problem. Our minimum wage is at the same level it was almost a half century ago. I mean, can you imagine going a half century with no pay raise at the bottom? Meanwhile, the economy is continuing to grow. But I think it would also increase productivity if you did that. And that has not yet been up. In the United States, we haven't succeeded in doing that in Mexico and many of the other countries. The third thing is, I think it's really important for us not to make things worse. So what I'm trying to say is there are a whole set of rules by which our society and our economy works that increase inequality and dampen economic growth. And we ought to, we're doing some of the things, some of the things on the structural reform agenda like competition are right. There are some things that are not yet on the agenda. And what worries me, there are some things that are on the agenda that will make things worse. And this morning I talked about TPP, the Trans-Pacific Partnership. The United States has engaged on one across the Atlantic. I think that will be a set of rules that will increase inequality. Finally, let me mention, and that goes back what Carlos said about the importance of creating jobs. Because in a sense, in the end, both growth and inequality are affected by job creation. If you have high unemployment, you're going to get high inequality. That's partly what the business sector does, but it's also partly a lot with macroeconomic and monetary policy. If in this slowdown, particularly where the prices of commodities are down, you have contractionary policies, which will be a temptation in many countries that haven't created Chile's stabilization fund. Those contractionary policies will lead to lower growth, even lower and more inequality. And we've seen that vividly in Europe. But I hope we won't see that in Latin America, but we know what will happen. The second thing is monetary policy. Monetary policies around the world, I think, were shown to be very flawed before the crisis. And what worries me is that when interest rates in the United States go up, in response to improved conditions there, there'll be a tendency of those in Mexico and others to try to raise their interest rates without realizing the economic conditions are different and that keeping those interest rates low would actually help spur growth and job creation in Mexico and other countries. Well, that's a lot of issues on monetary policy. I have to say that one good thing that we have in the Europeans don't have is called a flexible exchange rate, right? Exactly. The caveat, of course, is that we have a lot of dollar debt. Big depreciations in the presence of lots of dollar debt can be trouble. So we need to find some kind of a middle point there. But one thing that I hear emerging here, and let me mention it before I turn to Elvardo, is the notion that jobs are really a win-win proposition. Jobs are good for growth. If you bring people into the labor force, you wanna produce more things, and jobs are also great for equality. Let me share one number with you. Among the richer households in the Republic of Chile, people at the top 10%, on average, there are 2.3 jobs per family. Father, mother, and one of the children is working, or at least one of the children is working part-time. If you go to households in the bottom 10% of the income distribution, on average, you have half a job per household. You've got to put two families together to get one steady job. So incomes are badly distributed, but access to jobs are also very badly distributed, and that's got to be part of any growth agenda, and also of any, Joe was right, redistribution, but even before that, pre-distribution agenda. That's a very useful distinction made by a man called Hacker at Yale, a political scientist. We should be talking about pre-distribution along or sometimes before redistribution. Now all of this, better childcare, better labor markets, better public transport, competition policy, calls for an effective state, and the state is nothing but the sum of the institutions in the state. So let's turn to Eduardo to help us understand a little bit how do we meet not only the challenge of a state that is undergoing a legitimacy crisis, but also a state from which we're going to demand that they do a lot more things and better. All these things that we need for both the growth agenda and the pre-distribution agenda. How do we square that circle of it? As if I had the solution for everyone, right? Of course. And in under three minutes. Two and a half years. So, well, I think the starting point is the institutions are losing the shine and they're losing the quality that they should have. And this I think should be looked at from the angle of the leadership as opposed to the institution themselves. Why do I say leadership? Because the global financial crisis and social media have accelerated our scrutiny of good leadership. And in the end, all the economic issues of from innovation to inclusion, and so forth and so on depend on the right leaders and we've seen it in action. In some jurisdictions you see good leadership taking the right management attitudes and the right investments, thinking long term as opposed to their own term in office. The same goes, I think, for private institutions. Companies, and we work all the time with them, they do have to reinvent themselves because of the crisis and because of the shortage and the commodities crisis that you raised at the very beginning. They have to rethink themselves as to be more efficient, improve their governance, and that goes then to the ethics and the work on better governance, better compliance, which should derive in more trust from the consumers, from the people. So the point that I would like to raise is in my view, it's about leadership, it's about the talents, it's about the human beings as opposed to the institutions. And it's about the ethics, the way we govern ourselves. If we don't do something and do it very quickly at the pace we're going and the accelerated crisis and the accelerated social media, the institutions are gonna suffer. And that is very hard to remediate in my view. So leadership, let me pose a question to Carlos about business leadership because if we look at these polls in which people are asked, who do you trust? A lot of Latin Americans don't trust political leaders or political parties or traditional political institutions but in many countries and in many circumstances they also express mistrust in business leaders and traditional business associations, as Joe Stiglitz I'm sure will remind us they don't trust bankers either. We'll give a chance to say that at some point. Carlos, what should business leaders be doing in Latin America to regain that trust? Joe mentioned, for instance, competition policy. Maybe they should be embracing competition policy. What other kinds of things should we be expecting from business leaders so that they can also make a contribution to regain this mutual trust? So I think as well a characteristic of this era is that nobody can solve the problems by itself. So it's an era that is requiring much more collaboration and co-responsibility in the tasks that need to be addressed. I think and I think it's part of the agenda that was discussed within the forum that public-private partnerships should be stronger but as well they should address not only economic issues but as particularly social issues and that this collaboration or partnerships should be done between sectors and between regions as well. We have seen as it's happening with the Pacific Alliance how getting more collaboration and more integration makes regions stronger, makes them develop better, makes job creation have a better opportunity. So I will say that we need to do more collaboration regarding more programs and more problems beyond the only economical ones. Angelica, what about the role of NGOs? You've been involved in civil society also in business. NGOs are not a substitute for the state but maybe they're a complement to the state. We wanna strengthen civil society, like institutions one has to say that to feel good about oneself but if one looks at Latin America vis-a-vis other regions of the world I think it is fair to say that historically maybe not so much anymore civil society was weaker but we see a civil society that is becoming empowered maybe because of technological change maybe because of a more educated middle class who knows. Both Eduardo and Angelica how do we see this evolving and what else can we do? What other levers can we pull to make this a faster process? You know NGOs definitely are key players nowadays to make things happen as well as the private sector and the private public sector but I believe that in our region sometimes we, well in the past we perceived this kind of philanthropy as charity which does not work. So charity we found out does not work so we need to move into NGOs who do more of what Matthew Bishop said, Philanthrop capitalism where for example my foundation and in other foundations what they do is not just give them something to just cover whatever the problem they have but they train people. I think training is extremely important in our region. I also think that NGOs need to be more geared into programs that can help them start but just push them out there so they can have that financial independence that they're working that can be job creators as well. So I think we just need to change that vision on philanthropy, on really pushing all those people along into their own independence. I think that when you give people without them having worked for it, they in turn turn back and are not very appreciative and they can turn on to you but if you give them the tools and you give them the know how and you train them for whatever it is that they wanna achieve in their life then those people can participate in a more positive light and then you can also gear them towards being participants of formal economies and that can happen because I've seen it first hand with what we do, especially with women which is who I work with. A lot of the way, we're making bigger demands on governments and traditional institutions to be transparent. We should be doing the same thing vis a vis civil society, right? I fully agree, absolutely. NGOs, private sector, they have an increasing important role in being transparent, showing integrity and that's where we may be able to rebuild the trust, showing that one is taking measures to consolidate the democratic institutions by investing in the rule of law, its enforcement and inclusive and very serious internal compliance programs. I think that's the way we will only be able to restore trust and people's confidence in leadership and in the institutions. Thanks very much. We're gonna open it up to questions from the audience in one second but before I do that, I wanna pick one bone with my friend Joe Stiglitz here. TPP Joe. There are two kinds of criticisms one can voice against the TPP, the TPP sorry and I share one and I don't think I share the other one. Let me explain what it is that I'm talking about. Unlike businesses in Thailand where they can easily sort of become part of the Chinese based value chain, you make a part for the iPhone and gets assembled in China sold worldwide or unlike businesses in say Central Europe where the same thing can be done for goods assembled in Germany, Latin companies and Latin American economies with a big exception of Mexico which is plugged into North America, we are not plugged in into any value chains and of course this makes something that you and I would like industrialization difficult. You can't just make a component you gotta make the whole thing and then market it in some faraway country. This seems to me a very strong case for further trade integration along the lines of the TPP. It makes it easier for a company in Santiago or in Lima or in Medellin to plug into those value chains and it is going to be the Pacific century so we wanna be making friends in that part of the world. On the other hand, there's the intellectual property issue which you've written about, I just wrote a piece about. There are demands being made by the United States which are hard to square with both economics. There's no economic law that says that patents should be as long as possible and which also could have bad effects on income distribution, bad effects on innovation. How do we think about all of this and on balance given that we have these two tensions, are you for or against the Trans-Pacific Trade Partnership? Well, maybe I'll begin with the bottom line. I'm very much against it and it's not that I'm against trade. I mean, the fact is that tariffs are already pretty low. They could get lower but this agreement is mostly not about trade. It's not only about the intellectual property provisions which will make access to healthcare, access to knowledge more difficult. The knowledge gap is one of the most important gaps between develop and developing countries and it's gonna make it harder to close that gap but it's mostly about drugs and it's being driven by our pharmaceutical industries and when I say pharmaceutical, it's big pharma. It's not the generics who are trying to provide low cost drugs and have been strongly against the agreement. So it's only a small fraction of our drug companies that are pushing this agreement but the worst part is what is called the investor agreement. It has a whole set of provisions, most of which are designed to make it more difficult to have regulations about health, safety, worker conditions, environment, even financial sector like the regulations that Chile signed on about capital controls that became a problem when QE occurred and there was an onslaught of capital and most countries like Brazil who didn't have these agreements started doing things, Chile was in a difficult position to respond. What's interesting is there is no evidence that these provisions lead to faster growth, more investment and the largest country in this region, Brazil, has been very explicit about not signing an agreement where the investor state dispute resolution where a private firm can sue in private arbitration panels a government, they have said they will never sign such an agreement and South Africa has such agreements and they've canceled them, they've announced it because they wanted to have a regulation for affirmative action to respond to the decades of apartheid and they got sued for those regulations that were trying to create equality. So a country that wants to have gender neutrality, you know, gender equality, they can be sued if you pass a law saying you have to have equal pay because you can be sued for recovery of the expected profits that you would have gotten from the exercise of discrimination. Can you believe that? And these are not only potential suks, they're saying South Africa. And I mentioned this morning the case of Uruguay where Uruguay is being sued by a cigarette company for regulations that are just about packaging saying the package, cigarette package is labeled dangerous for your health and then like in Mexico, they actually show it by what's happened to your blackened lungs and guess what, when people see that they don't buy as many cigarettes and it's working but the cigarette company is saying you're taking away our profits and you have to compensate us for not killing your citizens. These litigation is extraordinarily expensive. Mayor Bloomberg is paying Uruguay's cost because they can't afford it. Bloomberg is committed to having health in New York but the US government is committed to making sure that Uruguay people exposed to cigarettes that will kill them. And to me, I think that's unacceptable. So these are basic principles around which you organize a society. And one of the really heartwarming things after the morning session where I raised this, described this as the new opium war, back in the 19th century, China, the way the trade imbalance, exports exceeded imports was corrected. China had lots of things the West wanted, the West didn't have anything that China wanted. There was a big trade surplus and Europe figured out a great way to correct that, export opium. And it has, I teach in the business school, one of the products that all of you know the best kind of product is one with repeat purchases, customer loyalty. And opium is really good in those terms. Once you take it, you stick with it. So China figured out it wasn't so good and they stopped, they said, you can't export opium to us. And the West's response was, this is a basic human right that we have to kill you and to sell opium. And not only a right, but they went to war, twice they went to war and it was where they got the concessions on the East Coast of China. President Obama is now waging the 21st century opium war. Not opium, but of course, cigarettes, cigarettes kill. We recognize that in the United States, Mexico recognizes that. And yet in TPP, there is a provision that will be an onslaught against the ability of governments to put regulations of this type against climate change. As we discover a new hazard, we discover asbestos or some other new chemical, it will not be possible to put regulations without paying the companies not to kill you. So you can understand why I may have some emotional response that I think this is not, if it were just about trade, I would support it. So for the record, I'm gonna agree with Joe Stiglitz on one thing and disagree on another and then we'll open it up. Agreement, some of the demands that the US is making on intellectual property make no sense. On the grounds, you very well explained. Agreement, it is crazy to do away with any ability of governments to control capital flows. So yes, that should not be part of the TPP. On the other hand, I do not believe that any of these things are integral and inevitable parts of the TPP. That is to say. The US never signed an agreement without these provisions. That is not quite true. Chile has an agreement, for instance, a free trade agreement bilateral with the US in which we stood firm. We said we will retain the right to enforce capital controls and we did. And in fact, we've used them. And that's one of the reasons, for instance, why Chile has managed better through many of these crises. So you're right. The negotiating position of the US on many of these grounds is untenable. But I'm from Latin America and I think we're gonna negotiate hard and we're gonna come out at the end of the day with a better TPP, see? So we're in Latin America, Joe. We're optimists. Now, we're gonna open it up. The gentleman right here in the front row. Thank you for sharing such insights with us this afternoon. My name is Jacques Philippe Vigelje from New York. I'm a YGL. I have a couple of questions. One for Professor Stiglitz and the second for Ms. Fuentes and Mr. Slim. Professor Stiglitz, last time we saw each other was at the Council for Relations in New York and you were talking about some of the findings from your research of OECDs with respect to upward mobility. And that was very surprising to many of us in that room. And I think it would be beneficial if you could share some of the key findings that are relevant to Latin America as they look to move forward and increase the middle class, increase the economy. What are some of the things that the region should avoid with respect to what you find in your findings? With respect to Mr. Slim and Ms. Fuentes, I think there's some low-hanging fruit that should be picked, not least of which is more an inter-regional trade. That was brought up in a session yesterday. If you look at Europe, it's something in the order of 69% of GDPs associated with inter-regional trade. Whereas Latin America, it's in the mid to high teens. And so what role should large business play with respect to increasing that inter-regional trade, especially in lieu of the fact that regional governments don't have a lot of support and if you were to wait for that to lead to more of that inter-regional trade, it could take a very long time whereas private capital, private markets, private business could really move with more agency and create a more responsible, more productive region. My family hails from Haiti, so definitely include the Caribbean. Thank you. Why don't we take that beginning with Angelica when we'll make a round and then turn it back to you. I am mindful of the fact that in 15 minutes, our Swiss hosts are going to be Swiss and tell us to end. So let's keep interventions hopefully fairly brief and to the point. Angelica. You know, I think one of the most important things for inter-regional trade would have to be to have similar policy on different areas. It's one of the things that, for example, TPP has been working on because sometimes you can bring in several products into a different region, but then into another region you cannot because they have different, I must say they said different policy in different areas. So I think that in order for trade to be, you know, to have a better free flow across the region, we need to, you know, have better policy and to have similar policy in the different regions and just pick the best that there is in the different countries and hopefully work together to make an effort on having that, to having a better trade within the region. Carlos, you wanna comment on that? Yes, I was mentioning before we were living in the smaller world every time and there are many types of economic interaction between economies. One can be financial, other can be pure trade of products, other can be capital investment. So I think it will depend on what is the opportunity or the strategic synergy that it might come from that. What I think is that we have, as Professor Stiglitz was mentioning, some things that can allow us to view that there are many opportunities regarding investment, more economic interchange. One is the interest rates that are low and they are low long-term. That's something that we haven't seen in many years and even though they can be right, they can go up, they will still be low. The other part is that there is a lot of money in the financial markets worldwide, pension funds, different type of investment funds, looking for potential investments within the economies. The other is that particularly for the economies, strong economies such as US or Europe, the cost of energy coming down, at least give us a view that we can be optimistic on the mid and long-term growth of those economies. So that can generate an economic component that for the countries can give something very important that is key in this new era. One is that the things that used to be lax in our countries that didn't allow us to develop, today they can be opportunities, particularly examples like infrastructure. Good infrastructure programs can find a way to get finance. They can be a strong generators of employment and economy within the society. And there are going, being more concrete, I think there are many opportunities that can be addressed and it will depend on how the countries target those opportunities regarding their strategical importance or the strategical complementation they can have in this new ecosystem. Joe, cheap oil once upon a time would have been an obvious win for the US. Will it hinder the development of non-traditional form of energy? Should we be worrying about that? Yes, I mean you should be worried about it because I think the incentives to try to develop renewable energy which will, America is still the largest contributor per capita to global warming. I mean we've been surpassed by China in total but on per capita basis we're multiple times that of any other country. I wanted to go back if I can to the question that was posed about equality of opportunity, upward mobility. What he was referring to is a really striking fact about the United States that among the advanced countries it is among the countries with the least equality of opportunity and that's very different from the way Americans see ourselves and the way most other countries see us. What that means is the light prospects of young American are more dependent on the income and education of his parents than in almost any of the other advanced countries. This is a natural result in a sense of a systematic pattern. Countries with a high level of income and wealth inequality tend to have low levels of equality of opportunity and so as America's inequality has gone up, inequality of income, equality of opportunity has gone down. There are some checks against this but unfortunately we aren't doing the right thing. Two messages that come out of this. One of them is you should worry about the degree of equality of income and that's where the advances in Latin America over the last 15 years have been very important and it's going to be very important as growth slows down that you keep up the pressure on that issue. The second thing is good public education has been in the past the most important check against this. One of the reasons for the lack of equality of opportunity is in effect there's the intergenerational transmission of advantage and when you have a private school system children of wealthy parents get to go send their children to very good private schools but in America we also have a local public education system. United States has more economic segregation today than we used to have that means rich people live with rich together and poor people with poor people. You have schools in the rich districts that are very good because it's all locally financed or mostly locally financed and so the divide in educational opportunities has increased and it's getting worse and so the message that I take out of that is a lot of discussion about education in Latin America, a lot of advances have been done but and there's a concern about equality of education and it's shown for instance about the deficiencies in the PISA scores but it's going to be really important I think to make sure that there's more equal access to high quality education for everybody. If you don't do that you're going to wind up like the United States where everybody talks about equality of opportunity but we all know it's a myth. So message for Latin Americans, don't copy the system in the U.S. of financing education with local taxes both unfair and inefficient. One thing to take off the list, the woman in the second row piece, sorry I don't know your name and if we can get a microphone to her that will be great. Global shapers of in Barranquilla, Colombia and as one of the 50 shapers who are here representing the voice of youth in the region my question is exactly that according to your perspective what is the role that youth are playing in the transformation of the region? Who wants to take that one up? Should I make just a couple of comments from an outsider? And then I feel a little bit nervous saying it's as an outsider but I think there are two things. One of them is- So I've seen you on panels for many years I've never seen you be nervous I'm sure you can handle this. One I think gives me a lot of optimism because the enthusiasm, I'm glad there's so many young shapers like you here the enthusiasm and the consciousness about these issues the issues of environment, gender equality all the issues that you brought to the table are really rising to the national agenda partly because the young people are stressing it. So I think that's the optimistic side but from the other side from the economic point of view I think there's going to be a very big challenge going forward making sure A we provide the education and then finally the jobs in a lot of other countries in Europe right now job opportunities for young people are not there. And so that's one of the reasons why it's going to be really important to maintain the macroeconomy at a pace of high job creation in order to keep the kind of enthusiasm that you have. Can I mention something on that regard as well? Thank you, Liga. It's not so much so on the economy side but I think that the young generations are the ones that are really going to shape the future especially on the subject that really interests me. I have run into your generation and you're looking for a place in life not just to do more, like my generation Eduardo's generation, maybe not Carlos says but to also be more. But to also be more that is so important. The kind of projects that you have that I've seen are really projects that are not just good for the economy but they're good socially as well. And I think it's up to us to support and to really help you along in moving into that direction. And you will be shaping what for many, many years we've been striving for. Men, your generation, most of at least the ones that I've talked to don't want to be weak-em parents. They want to share the education of their children. So I think you're the ones that are gonna transit into a more equal society if you really get together and understand that it takes of both to make a more just in society. Let's take another question. First hand up was somebody in a red shirt about five rows or six rows back there. Yes. Yes, again, from Mexico, from the consulting firm side, Law and Economics. I would like to ask Professor Stiglitz regarding a more general question. I would like to move to question not of the TPP but in more general, the free trade agreements. I think they're a compliment, a policy only, and they're not the panacea. There are many other policies that have to be put into place in order to see the benefits and to democratize the benefits of free trade agreements. But regarding to the investor state mechanism that you questioned, and I would like to contradict your view in this sense, particularly taking into consideration the Latin American reality in which there's a problem with the rule of law and with corruption and with credibility of our judicial systems. And I do believe that the investor state mechanism does provide to investors the protection they need in our countries. And there is a problem of course in the way it has been applied and we could narrow the possibilities of companies to demand the states in certain cases like the ones you mentioned that are very ridiculous. But this is a question of limiting that possibility of demanding the state in those cases and also creating more responsibility and obligations to the investors under these mechanisms which also should be revisited but not eliminating or not questioning an agreement because it has a chapter on investor state. So we have an advocate for investment agreements. Okay, wanna take that up, Joe? Yeah, I'll try to be brief. I'll try. I think the point I wanted to make first was that there's no evidence that these investment agreements lead to more investment and more trade. That's been studied extensively and therefore the notion that they will result in better outcomes is just there's no evidence for it. There is evidence that they lead to the kind of problems that we saw if we've seen in Uruguay. Just to, I hope Latin America negotiate a better agreement. There was a lot of pressure on the USTR just to carve out the cigarette issue. So they wouldn't be berated by me and say we've already taken care of that. They refused and this was in, a lot of American NGOs were on this issue, health, and they refused. So I hope Latin America is successful but I am not optimistic. But a couple more points. Brazil, I think, has signed for the first time a couple agreements where they have investment agreements but they have not had this investor state dispute resolution mechanism. What they've said is let's try to prevent, let's try to create an environment where we don't have these kinds of disputes. Let's try to create an investment climate where we don't wind up in court and we prevent the problem. And that's what they've done. They signed agreements with Mozambique and with Angola and what they've shown is you don't need this provision inside an agreement. And India, South Africa, and I say in Brazil have said no way are they gonna touch any agreement with these kinds of provisions. Finally, at the very least, there ought to be a change so that civil society, worker groups, labor unions also have access, equal access. But it's only corporations that can sue. So for instance, if there's part of an agreement that says you're supposed to do certain things and they don't fulfill that, civil society, labor groups, any other, the only people that can have access to these dispute resolution are the corporations. It's an unbi... No other legal framework says you are entitled and no one else can. So let me say, we've talked a lot in the United States. We had a very big discussion of these agreements. In the beginning of the Obama administration, they set up a commission to look at them and the USTR and the business community refused to move in response to very strong views from labor, from civil society. And unfortunately, the Obama administration in the new agreements has said we're not going to use a compromise, they've refused and we're gonna go with what the corporations, the big corporations wanted. So that's why I'm not very... Even he's dish his own domestic constituency, people who got him elected on this particular issue, campaign contributions do make a difference. So we have a lawyer in our midst here and I just wanna redirect this question to Eduardo in the following way. The question said, look, we have lousy legal systems, maybe that's true, maybe that's not, depends on the country and the circumstance. So we should use a non-local legal system to arbitrate disputes. I can imagine two positions on this, one that says, well, if it's bad, we need to supplement it overseas, that's a great thing. But I could also imagine somebody saying, well, if we have something overseas for a subset of people, namely investors, we will never develop a good legal system at home to address everybody's needs and everybody's rights. As a lawyer, how do you think about that? 40 years as a lawyer taught me that paper is worthless when the parties don't want to reach an agreement. And whether you use arbitration, whether you use WTO or any other mechanisms, it's a matter of setting the right rules and the right values and principles and objectives at the very beginning. If there is the wrong motivation at the very start, it's always gonna be a win, lose, or lose, lose. We may have time for one more question. Second road front here. Or maybe more if the host will allow us. Good afternoon, my name is Johans Karsten. I'm a global shaper from Cordo Bacab in Argentina. And I've heard a lot about the loss of trust in leadership within these days and it were one of the most interesting discussions. And I want to ask if you don't think that the attitude of some, and I want to remark some leaders to deny society in its role as one of the principal stakeholders of their institutions having contributed to this loss and how do you think it can be fixed for the future? So the tension between civil society and traditional political leadership, who wants to take a crack at that? I'll be the start, go for it. Yeah, I raise the issue of trust. And by the way, I'm your regue and but I don't smoke so that's my business, I'm making sure. The issue of trust and leadership is getting worse. And it's not in politics or in party politics or it's not in government. The media has also lost trust according to some barometers that are very publicized. The issue to me is integrity and civil society can do a lot. It can be more demanding. It can help to set rules of transparency. It can help through NGOs to use digital media, social media and digital tools. There are, even I heard this morning in India there's a website called ipadabribe.com and that has to have an impact. But the key to me is the youth and working, thinking in the long term. We need to change the mindset. We will have room for one more question. And I'm just going to apply the principle of whoever has had his or her hand up for longer will go for the far over there. Yes, you have the last word. If you can get a microphone. I'm from Caracas, Venezuela. I'm a global shaper. And as you said, youth is the hope but particularly for me, you guys are the hope because you have more weight in terms of decision making. So in order to have the change that we're willing everybody to have and to find sacrifices has to be done. And it needs to, quídate tú un poquito. Yes. Give me some space now to ourselves to all the youth. Especially particularly you guys in which way are you willing to step, step behind? And Leila, come on, and that's it. For a moment there when you said quídate tú I thought you were going to refer that to President Maduro and I was eager to applaud. I'm glad to see I was not the only one. Well, we have a youthful member of our group. Angelica, it's clear. So the youthful member of our group is going to address that. At least you give me some expectancy that I can still be, I go for quite a walk. I think that what is very important here is to get either in companies, in governments, in social organizations, a good institutionalized process that is based on having the strategy of the entity to be reaching the goals it requires and to be preparing the replacements it requires. As well as I have been mentioned for quite some of the answers, the importance of collaboration and in collaboration, some of the things that are happening in the paradigms particularly with companies is that nobody can do everything. So you may have a relationship with a company where you are a competitor, partner, provider, customer, and alliance at the same time. And that is what this society requires, that everybody does each job addressing, and sorry if I sideline a little bit, but there are going to be, we are going to see more opportunities happening. Following what Professor Stiglitz was saying on education, I tend to disagree because I think the digital education will give a better equalizer for content and for access to teachers' guidance and become a very strong, and it's already happening, complementary process within education in a massive scale, even in the more marginal communities, where we will reach that any people that is connected will be able to reach the same content and guidance that any other people around the world. So I think it's a process where more than stepping aside is to know how to collaborate, how to give space to the more capable people, and it's an issue more than of age, it's an issue of capacity, commitment, and hard work to achieve it, and I'm sure that the space for all of you will be open, but I agree totally with you. We always say that the young people is the future, but the reality is what we, leaders in different areas are doing right now, and we need to address it, we need to work for it, and we need particularly to do it right. Thank you very much. Can I make one comment? I am getting looks that says we should end it, but we will give an helicap. Just a very quick comment on what you said. You know, one of the things that I mentioned is that we are here to be behind, you know, or to be the force to push you along in the projects that you have. I don't think it should be Kitatereki, so I can take over, I think it should be, put yourself in that spot, and we have to have the willingness to support you and what you guys, you know, want to do, because at the end of the day, the world is for you, you know, you need to create your future, so I think it's, you know, like Carlos said, it takes of everybody collaborating, and the willingness of the ones that can make things happen, you know, do that for you. Open the space. So, let's begin to bring this wonderful session to a close. At some point, I'd be asked to summarize what was said, and I'm not going to attempt that crazy task. I could not possibly pull it off. Let me just underline two things that I've heard here. There's some things that we seem to know, or at least that we seem to agree on. For instance, the idea that job creation is good on many grounds, on grounds of equity, on grounds of growth, of dynamism, of social inclusion, those are things that we can work on. There are other things that we don't necessarily agree on, but more importantly, there are some things that we don't necessarily claim to have the final answer on. And the people up here, even the very useful ones may not know all the answers, but I'm sure that the younger people in the room will come up with those answers very soon, and in that spirit, please join me in a big applause for everybody here. Now we are going formally to put an end to this, and let me invite Marisol, our Mexican host, so that they will, first of all, ring a bell, or whatever it is one does, and secondly, tell us about where we meet next year. Thank you very, very much. Thank you. Thank you very much. Well, the Swiss host became Latin for a few minutes today, but that was great, and it was all worth it, and thank you for the global shapers to igniting such great conversation here with the great answers that you made. Thank you for joining us. I also thank our wonderful co-chairs. Each one of you have been very inspiring in all the work that we have done, but this is only the beginning. We look forward to working with you towards the whole cycle of the year to make things happen. So thank you very much. I also thank the forum staff. This is teamwork, and this is the proof of great teamwork. And I can only thank another great member of our team, which has been ProMexico. When we decided to undertake this challenge, we decided we would be working as one team, not as counterparts, and the results that you have seen is a result of that. So thank you very much. Thank you, Mexico. Thank you, Francisco. I'll leave you with a floor. Thank you very much. Thank you. So you remember you're in Mexico and speak in Spanish. Muy buenas tardes. Bienvenidos a todos. Good afternoon, everyone. Welcome to all the global shakers. Welcome all of the academicians. Welcome, everyone. It is a true privilege to be able to share this message with you. On behalf of President Enrique Peña Nieto, who sends you his warmest greetings. He is with President Santos in Mexico City at this time. He hopes that your time here in Mexico has been very fruitful. As you know, the World Economic Forum for Latin America is one of the most relevant fora in the region. And it focuses on strategies and global trends, focusing on economic paradigms as we have been hearing just now. This was an excellent opportunity for the private and public sectors to come together. And we want to give a warm round of applause to the young entrepreneurs here. Obviously, we are trying to encourage a debate about strategic issues for development. In 2015, we had very encouraging results. Let me share some of those with you. About 1,000 people have attended this conference. That is a record for the event in Latin America. In number and in quality, I would add. We had more than 45 countries represented. This is also historic high. We had heads of state from Haiti, Panama, and Mexico, 48 countries, 35 public sessions, 45 private, 223 bilateral meetings, and 28 ministers from 14 countries. We also reached some significant benchmarks. We had the 10th version of the World Economic Forum on Latin America, and this is the first time that Cuba participated in the Latin American World Economic Forum. Here we were focusing on prosperity for the Northern Triangle to encourage energy connections. And the conferences and panel discussions that have been held have given us many lessons learned. And we have been able to move forward in a systematic fashion as we focus on renovation. We are at a time when we must focus on structural reform in order to encourage growth in Latin America, the Caribbean, and of course, Mexico. And here at the Maya, Riviera Maya, we focused on issues important for the world. We focused on how we can improve productivity and competitiveness not only in Mexico, but in the region. This innovation or this renovation agenda is broad and it bodes well for a promising future when it comes to productivity, infrastructure, the environment, and more, focusing on education, innovation, and also responsibility. Without a doubt, we are going to strengthen the links between us and we will build an agenda for renovation that will allow us to achieve our global objectives. As President Peña Nieto shared with us, we have ahead of us a great challenge and we have a number of activities to be carried out. It was an honor for us to show Mexico a country in transition and to be the standard bearer of the World Economic Forum. I would also like to thank the government of Quintana Roo for their contribution to the success of this forum, but my greatest thanks is to the World Economic Forum for choosing us for the third time as the host country for this important event. President Peña Nieto has seen the importance of this forum for Latin America and it has offered us the opportunity to build a more prosperous future. Let us focus on development and let us all work to be better. I also would like to invite you to the lunch that the Secretary of Tourism is offering where we had our dinner before. I want to thank all of you for joining us at the World Economic Forum on Latin America. I wish you safe travels home and I hope that you will join us again in Mexico. We will always receive you with open arms and an open heart.