 Good afternoon. I'm Jim Hoglund and we are now in the process of mounting a challenge to the the general lack of attention that is paid to Latin America My distinguished predecessor as a columnist James Reston once said that the people of the United States Would do anything for the people of Latin America except read about them And I'm afraid that mr. Reston had a point but today with the crisis in Venezuela and the political situation in Brazil driving a lot of new interest coverage and Somewhat some fears about the course that Latin America is on We have a lot of attention being paid more and more We have four very distinguished panelists to take us through the mysteries of Latin America and to Bring us out at the end of this conversation With some questions from you To guide us into the future Our first speaker today is Andreas Rosenthal. He's a senior policy advisor at Chatham House president of Rosenthal and associates former Mexican ambassador to the United Kingdom and Andreas take it away Thanks, Jim. Thank you very much and thanks to the World policy conference for the invitation Latin America perhaps as you started off by saying in the United States It's not something a lot of people used to read about but I think today Latin America is very much on the front burner of domestic US policies and also in terms of foreign policy whether it's because of issues related to migration or questions relating to economic growth or populist presidents that have been elected in many of our countries as a result of enormous amount of dissatisfaction by the population Regarding previous administrations previous governments There's an enormous amount of volatility going on and I think That has put Latin America more in the forefront of interest in the US But also in Europe and in the rest of the world In a very general way the region if you count it from Mexico all the way down to the Antarctic and Include the Caribbean the English speaking and Spanish speaking and French speaking Caribbean Is not doing well We're not doing well economically with very few exceptions countries like Brazil and Mexico the two largest economies in the region are Growing at either Minimal rates or in the case of my country Mexico Probably towards zero real growth this year One of it is also self-inflicted So that one cannot put the blame on a global downturn In terms of economic growth the way one could with China or with some of the European countries If you if you remove Venezuela From the equation because Venezuela's growth is negative and has been negative In a very large way for the last few years We are not moving fast enough to Be able to deal with the annual new entrance into the labor market So in addition to other problems We have a social problem of young people who can't get a job and many of whom don't study either And so these so-called ninis in Spanish ni trabajan ni estudian is a very Serious problem in my country and I think in some of the other countries as well and Another issue which I think has happened and is part of the scenario these days Is that the region as a whole is retrenching? from global and regional affairs We are looking very much introspectively within our own countries As a result of the economic contraction, but also as a loss of interest among voters Voters today are much more preoccupied with their own pocketbook issues with issues relating to violence organized crime the migration issue and so we are very easily Abstaining from a larger participation as we have had in the past on the global scene And I think this is particularly true of Brazil and Mexico We both had leadership roles in different issue on different issues a climate change and other issues and we are now very much on our own The president of Mexico for example current president of Mexico has been in office for ten months Hasn't left the country once didn't go to the G20 summit didn't go to the UN General Assembly Didn't even go to the Pacific Alliance Summit which is a Mexican creation And and I think this is very indicative of this retrenching Into into an introspective world of both economic political and social issues So as a result of all of these factors I think Latin America is going to be to use in a a British expression punching below its weight In in the global on the global stage at a time when the opportunity to lead And we've heard a lot during this conference about lack of leadership The opportunity to lead Is very present But none of our leaders none of our domestic leaders are Really willing to take this on they are much more concentrated on their own Domestic issues. I'll just very quickly go through Some of the highlights of countries that are in trouble I'll start with Venezuela where as you know because it's been in the headlines a lot. There's a humanitarian crisis. There is a government that's whose legitimate legitimacy is being challenged by another leadership push You have a population that has left Venezuela about four not four million people are projected to have left Venezuela By the end of next year if things don't change there You have a Russian Venezuelan Alliance that has entered the picture Which is something that replaces the old Cuba Russian Alliance. So Mr. Maduro and the Venezuelan Government in power at the moment is being supported basically by Russia And and that is something which obviously upsets the US and so the US decided that as a matter of priority in its foreign policy It was going to move for regime change in Venezuela. Well Two years later, there is no regime change in Venezuela. The US foreign policy has failed miserably and There is no perspective as far as I can see of a change today in what's going on in Venezuela So we'll probably be faced with a great deal more humanitarian Tragedies in the coming months in Ecuador a more recent issue you have a president who is being assaulted by public opinion because of Reduction or elimination of subsidies for gasoline And he has had to move the capital his government from the capital of Ecuador from Quito to Guayaquil Which is an indication that he's to some extent the government has lost control of what's going on in the capital city Argentina We've heard the story before Argentina has been a up-and-down Roller coaster for most of its history having been one of the richest countries in the world again the faults on its international obligations Puts the IMF in a serious problem because of the 55 billion dollars that the IMF has pledged to support Argentina And there are elections coming up Later this month Where most probably the current president will be ousted by again? the Peronist populist movement Which will be headed by a candidate Fernandez Nicaragua Peru Haiti Haiti is another Tragedy Again after the earthquake after all of the suffering that the Haitian people have had They've had six presidents in the last two years and they're unable to find a way to govern and the current president is again Also being assaulted in the streets by popular opinion Dramatically demonstrating against him and asking for his resignation in Peru the last four presidents of Peru three of them are in jail and One of them had to commit suicide because he was going to be discovered as having been involved in a corruption scandal Nicaragua Nicaragua again a country that at one point was looked up at because it overthrew a dictatorship a somoza dictatorship of many many years now the Sandinistas who took over and Adjected the somoza government are back in the dictatorship mode the current president his wife run the country. They've now been Designated and and there also there is an economic crisis so putting those countries on one side and talking about my country and Brazil and Carlos Ivan will will be much more Detailed on the Brazilian situation We have this very many of the same problems. We have a problem of tepid growth We have a rising middle class that demands things from government that Government so far has not been able to give We have corruption scandals We have violence in the cities organized crime drug trafficking things which really have permeated our daily lives and which at the end of the day are creating a great deal of of This satisfaction by our people so not a good story I'm afraid to say And I know that we'll hear something about what investors believe Latin America still offers but the fact is that For a Latin American it's not a good time Thank You Andreas So next we head to Brazil Maybe we can find a little ray of hope there somehow I think you may if you look carefully if you look carefully Well In recent years Brazil has been the front page of the economist the Christ and real flying like a rocket and Then on a snubber issue That same rocket losing its momentum and falling so what happened between both both issues and What was actually the mistake behind the economist analysis I dare to say so Brazil in the beginning of the first Lula government that is 2002 Was in a very bad fiscal situation And Lula used his capital to fix that situation But that was not enough Brazil benefited enormously from a commodity search a surge on prices and As we say in Brazil we had a see of a see for an admiral an admiral see Perfect when perfect light everything was perfect and for many years we indulged ourselves into many Necessary justifiable social policies, but that were not so affordable in the long run not only that we insisted on giving power to corporations meaning the judiciary People in state-owned enterprises and all of that meant one thing potential deficit was growing in The beginning that didn't affect the rate of investments but after a while especially after 2008 2010 2008 was not bad in Brazil 2009 the GDP had a fall 2010 it was an extraordinary year, but composed with 2009 it just meant that we were growing at three and a half percent During all that period. We were growing at two percent more than Europe per year then with the Dilma government We started to have a lot of Keynesian this but that didn't study Keynes correctly and They started to intervene in the economy first intervention Try to have changed the electricity prices Try to control everything That didn't work That created havoc and the rate of investments started bit by bit falling At the same time we had a central bank dominated by people that were Hawks, I would say that had a very strong incentive to create a reputation Against fighting inflation When the deficit was growing so instead of focusing on the deficit we increased the deficit By paying more interest well Public debt which was around 30 something of GDP is now at around 80% Still manageable By the way, we have but better public finances in the US. We don't have a US Navy Therefore, we are not international reserve currency But if we had if you lend us your Navy, we will be the international currency. So The disaster Manifested itself at full force after the beginning of the second term for Dilma Housseff And it was very fast GDP started falling the rate of investments fell Enormously there was a lack of trust and Dilma was actually impeached after two years of her second term for disobeying the fiscal laws Something that I've never heard Happen in Europe or the US Mirko was judged by the Supreme Court in Germany the second tier of the Supreme Court in Germany for Something similar to what Dilma did because when she saved the German banks from the Greek Greek from Greece's disaster But Dilma was judged by Congress and she lost her position the vice president entered as our constitution mandates and Immediately he started a series of reforms Those reforms the most important of which would have been the change in social security We're stalled after the work were accusations that he was involved in a corruption scandal He went to meet the businessman in the garage of the presidential palace and from that moment on Brazil lost governance With the election of a new president we started a new period and we went for Recovering the work on social reform and we are almost there thanks to a Good interaction between the president and Congress Congress in Brazil and this is ignored by many outside is very strong right now It is very powerful the president has There was a law concerning the abuse of power from magistrates from judges I enacted by the Congress and the president vetoed 45 items 30 20 33 of those items The veto was cancelled by Congress so Power is divided and this is very important because we belong To the average Latin American class That started there independence drinking from the French Enlightenment so as in France we had our candidates to be Napoleon's to be Napoleon's a third to be to be tiered to be Clemenceau's to be the goals We always have us demand for a strong man and of course Britain did have better credit at the time of Waterloo and could mobilize more people Because the decision on the debt was taken by Parliament this is a Deep and profound move that is happening now in Brazil and for investors. This is extremely important next year the budget is going to be mandatory Something that foreigners never guess is that we don't have a mandatory budget The budget if I say in the budget up to this year if I say I'm going to spend a hundred billion dollars in education If I decide I'm present I decide to spend 50. It's okay Of course the policy that I will would develop with a hundred billion is different from the policy that I would develop That I will develop a 50 billion so the present has to remember this power and this power has been reduced so Don't expect when don't expect Brazil to fix everything at once But we are moving into the right direction Disposable income has grown 1.7% on average in real 4% in the last year up to June and this is a good sign We expect better growth next year. It will take us three four years to recover full growth But it is possible provided we continue to stress on the reforms. Thank you Carlos An old friend of the WPC and many of us here Miguel Angel Marotinos the former foreign minister of Spain Well, thank you. Thank you for inviting me give me This opportunity to talk to this important issue Let me say to primarily remarked number one that being a spaniard. I really ask to my Latin American friends to be condescended with me because the spaniard we have a long list there is moving interest so we do with a lot of political and historical element, but Sometime as the former You know colony. I mean we are not very well understood number one number two, I will try to be Not ideological. I Will try to identify the challenges of Latin America today Either you are from the left or this or chi populist on the left on the right and trying to be Trying to be objective to Identify the challenge of Latin America today from a Spanish point of view and from an analyst international point of view. I will start by Commanding the world policy conference to convey this Latin America debate. It was an unusual Even there is not too many people. Well, thank you for being here with us, you know But there was a reason ten years ago Nobody will care about Latin America. There was not in the agenda Because situation was going quite well Latin America was growing in five percent average There was no military pooch no military coup There was some success story in Salvador even at the end of the day in even in Colombia They get really I went to the democratic processes even after the financial crisis in Europe in Spain and my compatriots they was queuing in the Brazilian consulate because Brazil was asking visa. So the new architect engineer was rushing to go to Brazil to Peru Going out of the crisis in Europe. I was going to a Latin America and the rest in me It's funny for a minister. You have problems, huh? You are in a bad situation. No, we are now so They didn't make headlines But today I will give you three main headlines number one a Statement of the candidate of Argentina that the polls say that is going to win the election in Argentina Alberto Fernandez He said the main problem of Argentina is the hunger Can you understand? the most important country in agricultural Production cannot feed his citizens the hunger Second headline President Macron or President Bolsonaro Amazon What is going on in the environment? framework and what Amazon means is for the by diversity for whole of course Brazil but for the whole international community what it means for the Latin America economy not only the Amazon but in Bolivia the forest and the raw material the Environment the nature Because the Latin American economy has been during the last four decades or even more depending only on raw materials third headline Ecuador my friend And Rosenthal mentioned indigenous people taking over keto capital who could imagine Five years ago three years ago that keto will be you know invaded and trying to be a brute From indigenous community to trying to overthrow the regime three Headlines that reflect the three main challenges of Latin America, and I will try to be brief number one economy Either populace on the right or populace on the left They has been no as serious economic policy in the majority of the Latin Latin American countries There has been a low productivity today the figures you mentioned They are growing at 0.5 even Brazil imagine Brazil 0.8 Argentina Not only 0.9 Mexico zero and they are Producers of the most important Natural resources that combine and facilitate the economy of the international trade No fiscal reform You know what is the the pressure of fiscal reform in Latin America the average 10 percent In Germany 40 percent Spain 38 and Sweden 50 They don't pay taxes. They have no been introduced in this fiscal reform From the left to the Bolivarian and whatever to Macri or to any Government had been in Latin America. So the economic reform should be addressed Number two challenge the environment as I say the Amazon is the symbol What they are going to do with these resources They can continue with these extractive production. I mean in Bolivia. They have little they have gold. They have oil Well, okay, it's only agricultural product natural resources and How they are going to maintain and satisfy the sustainability agenda. They use the G agenda They have to address this issue and Third challenge is the political and social challenge the most important one and that is the reason Why today we have a steel people in the street of keto? There have been many success story, but one that of course is not so popular is Bolivia Then we can discuss maybe by people around me. They were against my position But can you run run run rule a country I? Put the example of Bolivia were the 60 percent of the population 60 percent are indigenous and that till 2003 and 2004 it's only 15 years ago They were not citizens. They didn't participate in the political life They didn't vote. They were absolutely outside the political system and Evo Morales introduced them and Succeed to get them into the new reality and today Bolivia is growing at 4% And we have a very nice and positive economic situation, I don't know if it's going to win the election. I don't know so You cannot avoid to take into account the social element of Latin American countries With all my respect to my body Brazilian friends, of course, you have a lead you have the economic or you know Cluster But if you don't address the situation in the social poor areas of Rio de Janeiro Sao Paulo People will revolt people will not accept and that is one of the main concern What is happening and I finish in Argentina? Why after the collapse of the kids was a disaster? Kirchner, okay, everybody know how much Problem were caused by them, but then everybody was expecting the Macri will be the magic formula neoliberalism and back And he failed again so The three challenge have to be addressed together the economic the environmental and the social and political reform you know, thank you for that very forceful and clear presentation and Our last speaker is Bertrand Badre Who is former managing director of the World Bank and today heads an inverse investment firm Whose name is blue like an orange, so it sounds like we can expect some optimism from Bertrand Merci je vais parler en français pour une fois c'est un luxe rare et apprécié Il me revient le rôle compliqué après tout ce qu'on a entendu heureusement que carlos a donné une petite note plus positive sur le brésil d'expliquer pourquoi Si j'entends tout ce que j'ai entendu à ma gauche il reste une bonne idée d'investir en amérique latine aujourd'hui Alors une fois que j'ai dit ça Silence mais fondamentalement c'est bien ça que j'ai choisi de faire en quittant la banque mondiale En partenariat avec la banque interamiché de développement nous avons créé blue like an orange en hommage à polé luard la terre est bleue comme une orange whereas it's blue like an orange Pour nous attaquer aux questions qu'ont été soulevées par mon voisin qui est le monde en 2015 a pris un certain nombre d'engagement sur le développement durable et le climat et une bonne partie de ses engagements seront gagnés ou perdues à l'échelle de la planète notamment en afrique et en amérique latine et donc j'ai choisi de commencer en amérique latine parce que c'est un continent où il y a beaucoup d'opportunités alors je me souviens très bien de ce que m'avait dit louis alberto moreno le président de la banque intermaïcaine Il y a deux ans d'ailleurs je l'avais réuni devant mes possibles investisseurs il avait commencé en disant natin america is great, but there is a footnote. It's not for beginners And that's exactly the point quand on a entendu tout ça donc c'est vrai que quand on regarde le continent dans son ensemble 2019 c'est pas une très bonne année c'est pas une très bonne année parce que la croissance est affecée au mexic qu'elle reprend à peine au brésil et on peut prendre pays par pays on peut effectivement dire ça ça va pas et au niveau de l'ensemble du continent qui est en plus tiré vers le bas par le venezuel qui pèse beaucoup sur la croissance macro du continent on est juste au-dessus de zéro dernière destination du fmi pour cette année même si l'anticipe un rebond l'année prochaine tirer notamment par le brésil donc vision macro pas très pas très enthousiasmant vision politique un peu un peu compliqué comme la plupart des gens passent assez peu de temps à comprendre amérique latine il lise le journal il dise la capitale de l'équateur a été transféré de qui taux à guayaquil il lise les élections primaires en argentine il dit ben oui on croyait que macris c'était macron et on fait pas du tout il regarde les disputes entre bol sonaro et macron il disent à la la le brésil on n'y arrivera pas et je peux continuer la liste où le fait que le président du mexic effectivement ne soit pas encore sorti du mexic on tout ça on peut on peut dire on peut regarder se dire va le ver il est plutôt à moitié vite qu'à moitié plein et il faut avoir ça à l'esprit mais en même temps et c'est mon job je pense qu'il est en réalité plutôt à moitié plein qu'à moitié vide alors à la fois parce que 2009 c'est un moment où on prend une photo mais que c'est une photo qui vient quand même après vingt ans de progrès de changements ça a été rappelé depuis vingt ans il ya de la croissance le revenu par habitant augmenter il ya un développement des classes moyennes de la société civile des institutions effectivement il ya trois présidents peruviennes qui sont en prison enfin 600 prisons c'est que le système judiciaire fonctionne c'est plutôt positif à c'est pas ce qu'on aurait eu à 25 ou 30 ans et on peut reprendre le cas du brésil etc donc il ya des institutions qui tiennent la route il ya une société civile qui qui bouge donc tout ça tout ça est un facteur de confort les progrès économiques depuis vingt ans ça n'arrête pas du jour au lendemain on est pas au bord d'une falaise où le système s'effondre on est un moment d'ajustement effectivement la fin du cycle des matières premières les tensions commerciales pèsent plus sur l'amérique latine que sur la plupart des autres continents et ça il faut pas le faut pas de nier mais en même temps c'est le moment où le mexique devient le premier partenaire commercial américain devant la chine et l'intégration mexique amérique et asunis pardon est un facteur qui profonde qui montre le travail qui a été fait par le mexique dans l'intégration de valeur Depuis vingt ans et qui maintenant fonctionne qui fait que je suis plutôt optimiste sur le mexique parce qu'il n'y a plus aucune chance c'est maintenant tout big to fail pour les états unis plus compliqué pour le brésil donc voyez on peut on peut regarder tout ça et surtout et c'est pour moi je vais essayer de pas être trop long qu'on puisse répondre aux questions je ne reviendrai pas dans le détail des pays mais c'est surtout ça illustre un sujet qu'on peut retrouver d'ailleurs avec des échos en afrique ou pour les gens quand ils regardent l'amérique latine c'est un ensemble comme l'afrique est un ensemble on dit les marchés émergents et après quand on est un peu plus spécialisé on dit ben oui à l'asie émergente il ya l'afrique et l'amérique latine et c'est en partie ça fait en partie du sens parce que il n'y a aucun des marchés financier latino-américain individuel qui est à l'échelle de la planète donc c'est vrai qu'on résonne en allocation amérique latine et qu'on regarde assez peu dans le détail et encore une fois c'est le même sujet qu'en afrique on oublie que l'afrique c'est 55 pays et que l'amérique latine c'est 32 pays donc il faut regarder dans le détail c'est pas parce que il ya un problème acquittot qui a imprimé a Bogota etc donc effectivement je reviens à ce que disait l'huysalberto moreno c'est pas pour les débutants donc il faut être sélectif et les conversations je finirai peut-être là dessus sur deux points les conversations que j'ai pu avoir cette année en allant discuter de projets au brésil au mexique ou ailleurs mais c'est que c'est pas parce que la croissance du mexique est 0% que tout le monde est à 0% ça veut dire qu'il y a du plus 5 et du moins 5 et ça veut dire qu'on peut aller sur le plus 5 moi j'ai découvert au mexique et je le lis avec humilité parce que j'aurais dû le savoir avant qu'il ya un boom dans les technologies a guadalajara par exemple il ya des entrepreneurs je suis allé les voir qui ont signé des accords avec les israéliens et qui font des choses absolument exceptionnelles brésil pareil dans la fin de la fin tech au brésil et cetera je peux prendre des exemples partout donc il faut se désengager cette vision un peu misérabiliste macro sur le thème ça va pas etc qui est exact mais qui ne représente qu'un reflet la certaine de choses qui se passe dessous et puis par ailleurs c'est ce que vous venez de dire des enjeux majeurs du continent et je pense que ça va se voir de plus en plus alors malheureusement de manière un peu désagréable cet été sur l'amazonie c'est que c'est sur la question du climat comme sur la question de la biodiversité de la nature qui vont être au sommet des négociations internationales en 2020 c'est en amérique latine que ça joue entre 40 et 50 pour cent de la biodiversité mondiale est en amérique latine on a bien vu sur l'amazonie l'absorption du carbone on a dit que c'était le poumon de l'humanitaire après d'un an c'est le poumon du brésil en question de souveraineté n'empêche que ça va être au coeur des sujets et donc d'investir comme j'essaie de le faire sur ces sujets de développement durable en le continent ou va se gagner ou se perdre ce combat je pense que ça fait plus de sens que jamais il y a bien de la valeur non seulement morale etique alors j'en suis convaincu économique Merci Bertrand nous avons 12 minutes pour les questions très précis très court et très clair Jean-Louis Jagarin il y a des questions question purement effectuelle sur l'aspect géopolitique soit de pour l'amérique latine quelle stratégie chinoise quelle stratégie chinoise en amérique latine vous avez dit que les russes soutenés à fond les vénézoliens le chinois aussi ils ont des intérêts économiques il y a quand même une stratégie un peu concerté de ce côté-là deuxième question la bombardement de l'immigration il ya plusieurs scénarios mais comment ça y a quand même le verrou américain le verrou trump est en train de fonctionner si le si trump est réélu il sera évidemment maintenu renforcé quelles sont les conséquences notamment pour pour l'amérique centrale et pour le mexique anyone want to well maybe maybe I can talk about the mix well by the way I agree entirely with Bertrand in spite of the fact that I'm negative about the region as a whole today as compared perhaps to some years ago I still think that Latin America has the potential and certainly in the case of my country of Mexico as he very rightly pointed out it is still a favorite destination for investment both domestic and foreign and I don't mean I didn't mean to be negative about where we're going in the future it's just that everything has combined this year to be somewhat negative to answer to answer the question about migration and and Mr Trump it is true that Mexico has had to deal with a an ever-growing anti-immigrant sentiment in the United States where the current administration is trying as hard as it can to avoid taking in immigrants whether they are economic migrants or asylum seekers from Central America and that has had an immediate effect on Mexico because most of these people who have traveled in some cases all the way from Africa to try to get to the United States are stuck in Mexico and they're stuck in Mexico at the northern border on the Mexican side which is not the best place to be it's an area of violence it's an area of organized crime presence and at the end of the day the Mexican government having to face this very new phenomenon is not was not and is not prepared for it we follow the humanitarian process in terms of our international commitments and try to deal with the people but it's very difficult when you have right now about 80,000 Central Americans Africans Asians who have all come and spent a lot of money and in some cases risked their lives to get to the border to try to get into the United States with an American government that is doing absolutely everything it can to avoid having them come in most of these decisions by the Trump administration are under judicial review and it's very possible that at the end many of them will be declared either unconstitutional or they will have to be reversed but for the time being it's a major major problem and on the on the other issue I think at the end of the day you have this great variety and you know we Moratino spoke about Latin America and and the French the French influence on Latin America I've I've said now for a number of years that the notion of La Meric Latine is a purely fictional thing that was invented by the French to try to have a political social legal and other influence in a region where Spain left at some point and France decided that it wanted to have some sort of a hegemony there and so La Meric Latine was born there is no Latin America Latin America is divided as is Europe and as is Africa and it's to some extent unfair to try to categorize and compartmentalize Latin America as a single entity and the objective is to have access to the raw material it's essential for China and that continues and at the same time it's to place where the United States leave and to make an influence to countercarry the politics of the United States that had at a given time were very hegemonic the United States for a few years except Mexico of course because it's the neighbors it wasn't object of a deep strategy of the State Department I remember my discussions with Colin Powell Hillary Clinton I discussed what is your position on Latin America or on Central America obviously on Brazil but on they didn't have and in my opinion except in the case of Cuba and Venezuela of course in the case of Cuba and Venezuela and the result and we see what is the result so to tell you material first and replacement and presence where the United States are not present I would add to recover the money that we owe Latin America countries who have sold in the case of Venezuela it's been $50 billion that they owe the Venezuelans to the Chinese Carlos your question was where will the Chinese target they target the automobile industry they target the reconciliation of the energy system of South America these are the two biggest light motifs in South America unfortunately two Europeans are the owners of a large part of the automobile industry of South America but they target we are not paying attention that Mercosul is not the European community Mercosul is a union between four maybe five but four at the moment countries who have the characteristic to have a Germany which is 70% of the GNP again if you consider the GNP of Brazil in terms of car sales it's $2,000,000 trillion in terms of GDP according to the IMF it's $3.1 billion 60% to 5% of the GNP are services what do the Chinese do now they buy small, medium size of an investment bank to have the list of customers they don't pay any price they want to penetrate in the Brazilian medium companies to increase the exportation either Chinese or Brazilian that's the real the real position and finally it's true I agree with the President the Latin America was born of two dreams the Habsburg dream followed by the Bourbons the other the Plantagenet of the Habis family don't forget it's two different dreams it's an Atlanticist vision the other is a continental European vision these are two origins that you have to master you have to approach Brazil and other nations of the Latin America that's why Mexico is fundamental because Mexico is closer to the end not physically but closer to the end but it has a deep cultural separation but it also has a lot of friendship thank you Carlos what is quite funny with what Carlos Ivan just said is that for years and years since we signed the ALENA the Brazilian government told us Mexico is no longer part of the Latin America Mexico has sold its soul to the United States today Mr. Bolsonaro does only that sell his soul to the United States we have a question here it's true thank you gentlemen Carlos my question is the implication of FTA between EU and Mercosur countries in the last 20 years a lot of discussion and negotiations were done but you didn't get any solution as to FTA with EU but suddenly you between EU and Mercosur countries you are now having the framework of FTA so intention of EU side I think lies the stopping the de-horrestration of Amazon area so your government will accept the FTA from such kind of framework and we have about a minute left so if it's one minute I will say that I will answer you Professor Tanaka afterwards but I will give you a longer answer but the short answer is both Europe and Brazil and even the US are under the same stress the rise of innovation in Asia is displacing downwards the middle class in all these regions of course our middle class is poorer than European middle class it's poorer than American middle class but the phenomenon is the same so it's a simple fiscality problem their taxation on GDP is smaller than ours so therefore there is less money for innovation if they raise the relative rhythm of innovation the relative rhythm of innovation falls and what is important is a relative rhythm of innovation so we have natural resources but we export planes everywhere and you must have flown Embraer in the US or Europe and Middle East we dig oil 7000 meters on the level of the ocean we have many industries and we are suffering this impact and of course unless we have we want to have pizza delivery specialty in Brazil for the server sector which will mean everyone will be very poor we have to go after innovation this is a trick so trade agreements are necessary of course they are difficult this is my answer so it is our best interest to preserve Amazonia despite of any other foreign influence we depend on that for biotechnology we depend on that for water for agriculture and so forth so there is a lot of things that have to be understood and the problems are not as simple as they seem I want to thank the panel for expanding my knowledge of Latin America exponentially I thank the audience for hanging in there to the bitter end you are all hardcore I can tell thank you so much