 Welcome. We are very happy to be in Panama in this ninth edition of the World Economic Forum. We are celebrating the topic Opening Pathways to Shared Prosperity. We have developed a very complete program based on three pillars, economic dynamism, social innovation, and the importance of sustainable development in environmental issues and the modernization of economy and institutional infrastructure. We have here with us five of our six co-chairs. I must apologize for Mr. Stanley Motta, who is not here with us today in this session. He has been a great support for conducting this activity. This morning, here are Aran Chagonsales-Laya, Executive Director of International Freight Center from Switzerland, Mr. Arif Nakvi, Founder and CEO of the Brash Group of the United Arab Emirates, Fritz van Paschen, President and CEO of Starwood Resorts and Hotels. We also have Mr. Jorge Quijano, the Executive Director of the Panama Canal Authority, and Sir Martin Sorrell, Executive Director of WPP in the United Kingdom. Welcome and thank you very much for all your support and dynamic contribution to this session. I leave you now with Mr. Jorge Quijano. Thank you, Marisol. Thank you all for being here. It is a great pleasure for the Panama Canal Authority and for Panama, because after trying for so long to get the web to come and hold its forum here in Panama, as the President mentioned yesterday, this was a long process, took about five years, and we are very grateful for introducing Panama to you, introducing the Panama Canal to you and what we offer to the world and to this region specifically, as you know, we have been able to attain some 600, to get some 600 regional leaders and world leaders to participate. We truly have a lot of people from Europe and Asia. They represent more than 50 countries, and in particular, what pertains to the Panama Canal and to Panama itself. We are trying to work and showcase what Panama offers as a logistic center for the world to show our advances in infrastructure that we are working on and the possibilities with the specific issue of natural liquefied gas, energy, especially in that area of that new product that is becoming an export nowadays, specifically in the Gulf of Mexico area in the United States. Our country has a privileged position, and this is the one that allows us, provides us the opportunity to serve the world and to promote Panama as a motor for our logistics platform. We have maintained a level of growth throughout the last years of approximately eight percent. We see that Panama has attained through this, the Panama Canal as a motor, and the concomitant of the logistical opportunities. It has been able to represent a high percentage of the internal, the domestic growth product. And for Panama, this area is the one that is really a motor for our country. It provides great benefits for all Panamanians, so we would like to be great promoters. And we are accomplishing this through the Panama Canal expansion, not only when we are done with the expansion at that time, now we can see its impact on the Panamanian population, especially regarding employment. We have worked diligently not only to make the Canal a route, a path, but also to make Panama a destination for business. And this is exactly what the WEF allows us to showcase, so that all that are interested in doing business within an environment of growing economies, of those economies that are growing the most in the world at this time, it's the Latin American ones. And I believe that the presence of the WEF here ratifies that fact. And we consider that in the future, not only our nation, our Canal, but Latin America will use Panama as its location to open these economies. Thank you, Jorge. Arancia, first of all, I would like to share with you a warm thought regarding Chile for President Bachelet and what Chile underwent last night, an earthquake that, thanks to the higher power, it was not awful. Second to thank the WEF and Panama for its hospitality, I believe that we heard Mr. Quijano state the Panama's desire to become a model for other countries in the region. And I judge from the welcome we received at WEF were on the right path. The emphasis of the WEF, I would like to state, is on two pillars. Number one, the importance of secure, sustainable growth on a long-term basis. It's growth that comes with reforms to improve productivity, competitiveness of the economies in Latin America, to raise the size of the wealth of each of its countries. And I would like to highlight the role of trade. And it is not a matter of luck that we happen to be in Panama. It's a country that has embraced a model of opening trade. And the WEF presented its enabling trade report yesterday. It gave us an idea of the efforts that the WEF is conducting in this region to improve competitiveness and promote growth. Another element and important one that we must highlight is the role of small and medium-sized businesses in this growth, in productivity, and its improvement. There were many good discussions over how to do in each of our countries to improve the position of small and medium-sized businesses in the economy. We would also like to highlight the WEF's emphasis on empowering women economically. The enormous role that women can play in the creation of jobs, in generating growth, and in reducing poverty. I insist again on these topics. We need concrete ideas on how countries may include more women because they represent 50 percent or more of our country's societies in order to include women in a better manner and more within our economies. But we also would like to talk about improving competitiveness and also on improving the distribution of the benefits in our societies and to reduce the gap, the inequality gap that you see as one of the great risks for stability in our region, in Latin America. With this, thank you. Thank you again to the WEF for its hospitality and I am at your service. Thank you Arancha, Arief. Thank you very much for having me here and thank you for the WEF for organizing this. I'm delighted to be here in Panama. I've been here many times over the last few years and it's been a pleasure to see the progress of the country on a continuous and fairly relentless path forward. However, what is fair to say is that when you look at the entire region as a whole and Panama should be very pleased that it is hosting the WEF but it is doing so as almost like a mirror for the entire Latin America region and the last 20 years have seen a very radical change actually in the political, in the macroeconomic and the social structure environment in Latin America and this last 20 years has probably been more radical than the last 200 years. The most striking thing that I've seen in my knowledge or experience of this market is the rise of the middle class. The middle class in Latin America and its rise in the last decade has been remarkable. It's been striking and the region now has more people living in the middle classes than in poverty and this is a very, very important demographic shift that hasn't happened before. Also, of course, this continent and this area of Latin America has got some excellent demographics. It has a young, increasingly well-educated labor force, ready to take on new challenges and the most important element, sometimes when you live in the region you don't realize some of the things that we see from the outside. One of the most interesting things about this region is it is actually the most urbanized region in the world and therefore it offers a potential, enormous potential for higher growth. Four-fifths of the population of Latin America actually is now living in cities and there is a very rapid growth in tier two cities. Now, I'm sure all of you know that urbanization is one of the most incredible themes of this century and for the next 40 or 50 years going forward. Half of mankind today lives in cities. This is not a new statistic. We all know that, but what not all of us know is that we're increasing that number by about a million people a week across the world and that's the equivalent of eight New York cities a year and if you are so urbanized in this part of the world it actually means that Latin America has a head start over most of the regions in the world when it comes to urbanization because urbanization then lends us to the next big trend, which is the importance of cities at frankly the expense of countries and cities are going to become more relevant. The fact that you have so many tier two cities today mean that you have an assured growth market going forward into the future as well. We've seen the growth potential of this region. We've been investing in the region for a few years albeit in a small scale and we're now looking forward to expanding that enormously. We have a couple of investments that really prove the hypothesis that I've been making so far. ISAC Corp, which is a ladies clothing apparel business in the Andean region, Acurio restaurants both point to the fact that you can take Latin American businesses, grow them into regional businesses and eventually to global businesses and that's what we're very excited about. However the whole continent is not moving forward at the same pace. There's clearly a multi-speed Latin America that we're seeing emerging. Panama is by far and away the champion of this process. It's experiencing double digit growth and that's very exciting for all of us especially with its impending affiliation to the Pacific Alliance. I think the Pacific Alliance is also an extremely exciting development in this region. Once again it's important to know that the Pacific Alliance is already larger than Brazil in terms of population and is growing at twice the rate of Brazil. Now this is an important fact to know because these countries together collectively have a great purchasing power and a great economic capacity and I think it's very important for the rest of the world to focus on these countries rather than on acronym investing which is you know BRIC or MENTO, XYZ. Each of these countries has a great ability to outperform its neighbors and competitors and we're seeing a very positive outcome for this market. So that's why personally as an investor, as a foreign investor, I'm extremely excited to be here. I'm very pleased with the fact that it is happening in Panama which is one of the more dynamic economies in the region. A lot of my colleagues on the panel will be giving you a lot of statistics on why Panama is so exciting. I think that's a given as far as we're concerned and I'll leave you with one thought. Every region has a draw. Every region has a point that collectively pulls the region together and makes it exciting. So the Middle East region has Dubai. The Central Asian region has Istanbul. The Far Eastern region has Singapore and I'd like to say that I think going forward in the future it's going to be Panama that is going to catalyze the opportunities in the region and pull it together. So thank you for being here and I'm very excited to be here. Thank you very, very much. Fritz from Starwood's perspective, what can you share with us? Yes, thank you. I'd like to say first of all that I'm thrilled to be here, not least because there's still snow on the ground in New York. But I will tell you that today I'm here both as a guest to Panama but also as a host to you as this hotel, the Western Playa Bonita is one of 1200 hotels that we operate around the world. We're in a hundred countries. Some of the other brands of ours that you may have heard of or stayed with hopefully would be the Meridian, Sheraton, St. Regis, W and of course the West in here. Aloft is another brand of ours. It's expanding rapidly around the world and I can tell you from our vantage point that this is an extraordinarily exciting time in the high-end travel business and I say that both from a global perspective but also seeing that those same global trends are playing out in very positive ways in many countries throughout this region and those trends primarily have to do with the rising wealth and middle class. We heard a bit about that already and the consequence of that of course with urbanization, the creation of infrastructure but connected to that also the globalization of business largely enabled by technology and the increasing importance of travel not just as a leisure activity but as a way of connecting business and while technology in some ways may supplant travel, it has a much greater effect at creating a global business community and connecting people so we continue to see high-end travel growing even much faster than global GDP growth rates and of course here in Latin America the rise of the middle class, the focus on building infrastructure across cities, has been a catalyst for growth. Today we operate 80 hotels in Latin America, we see that number going to 100 in the next three years and that's a function largely of those very same trends. In many respects Panama and the Pacific Alliance has been referred or excellent examples of the way forward for the region. We have to go beyond being driven for growth by raw materials and see that trade and tourism by themselves can in fact be very important drivers both of wealth creation, of job creation but also of further opportunities. The formula for growth at least in the travel and tourism sector as played out here in Panama has to do with improving airlift, expanding infrastructure capacity, allowing for permitting and investment to create and build hotels, flexible labor laws that make it possible for us to hire and train a workforce and all of those things here in Panama have played out extraordinarily well. We've been operating in the region for 45 years, we've been in South America for over 40 years and the growth we've seen in the last decade, decade and a half here in Panama is extraordinary today we operate seven hotels in this country and see opportunities for continued growth so with that thank you. Thank you very very much Martin. Yeah okay last last but not least Martin Sorrell, CEO of WPP. We are currently the world's largest advertising and marketing services company. I'm going to talk a little bit about brand Latin America and a little bit about in that context brand Panama but before I do let me put it in perspective because just picking up on some of the things that Arif mentioned, some of which I agree with and some which I'm a little bit hesitant to agree with. I see Latin America or we see Latin America and WPP as being a very important part of our business. It's actually 1.7 billion dollars of revenue and 20,000 people now in Latin America out of a total of about 22 billion including our associates as companies we own 20 to 49 percent of and 175,000 people around the world but Latin America just to pick on what Arif said and this is where I think he referred to the mnemonics and the disadvantages of the sort of analysis that Jim O'Neill at Goldman Sachs when he was at Goldman Sachs talked about in terms of bricks and next 11 minutes but these are, Latin America is one of the regions on which we are if I can use this phrase betting the future of WPP. One third of our revenues as a whole come from Asia, Latin America, Africa in the Middle East and Central East in Europe and that is the growth engine of most of the multinational clients that we deal with and the growth engine obviously of local and regional clients that are based in that part of the world. If you look at our business Brazil is about half of that 1.7 billion and whether Latin Americans as a whole like it or not Brazil is the engine currently of Latin America and Brazil accounts as I say about half of Latin American GMP and when Brazil stutters which at the moment Brazil is exhibiting a slower rate of growth that has an impact on the rest of the region whether you consolidate the populations into Pacific alliances or trade agreements or not the danger of doing that is rather like the EU these are separate countries with different cultures and different philosophies it's often difficult to get them to behave in a unified way and they're not actually one market so Brazil is obviously critical in that in that respect. Brown Latin America in our view is in a fairly healthy state it has one or two challenges coming on which I will come on to but generally the trends that Arif in particular mentioned of urbanization the growth of the middle class one of the things he didn't mention was the growth of digital interestingly because of because of the growth of telecommunications mobile telecommunications in particular what we've seen is an acceleration of digital and digital media to an extent that we haven't seen maybe in some of the more traditional legacy countries and that we see mirrored in China in countries like China and India and the urbanization thing that Arif mentioned is very it's very important the sort of work that we've done with IBM for example on smarter planet and smarter cities embodies that so I would say this I would go back to to the launch of Brand Colombia that we we did in Cartagena with Luis Moreno president of the Inter-American Development Bank several years ago when we both talked about this being the decade of Latin America our business last year in Latin America grew like for like like for like excluding currency and acquisitions at 8% which compared with the worldwide growth rate of three and a half percent this year it's budgeted Latin America's budget to grow at 11% that's our businesses like for like excluding currency and acquisitions so we expect a stronger year and that certainly has been the case in the first couple of months of the year let me just turn quickly to brand Panama Panama to my mind could well be the Singapore of of Latin America and I would encourage people it's Singapore is slightly bigger at five million population but a very very integrated government and a very very integrated approach to economic development and I think some of the lessons of the growth of Singapore could be could be extremely useful in the context of brand Panama or development of Panama the developments of infrastructure the canal the airport I think will challenge Miami Miami has historically been a more convenient centre in many respects for many multinationals but I think we're starting to see the growth or the the greater examination of Panama at least as a regional headquarters and there are one or two shining examples of that happening already we think about Latin America certainly WPP is Brazil in this order Brazil Mexico Argentina Colombia Chile Peru those are the the key economies at the moment I just quickly go through them in terms of prospects brazil has slowed the critical thing in brazil is how the government and others execute I think execute on the world cup in a few months time and the Olympics 2016 clearly the the issue of inequality that's just been raised is is important in this context and there will be I think a certain amount of activism around both events drawing attention to the question as to whether such large investments should be made in these types of infrastructure at this particular point in time of the economic cycle having said that there are discrete legacy benefits that come from a world cup and particularly from an Olympics which I think have to be brought to people's attention in a more in a more articulate way but brazil basically we believe in the long term has very strong prospects Mexico with energy reform in December of last year we think is a very high growth prospect and the the president of Mexico will be here tomorrow and he will articulate it in a more effective way Argentina obviously has some challenges although our own view is that these challenges as in we've seen in the history of Argentina presents opportunities Colombia very strong post the elections the reelection of Santos and of course Chile in Peru Chile smaller about 14 million people stable economy but Peru very much a growth engine I would just mention Paraguay in parentheses it's a it's a forgotten country in the context of Latin America but we see increasingly interesting growth prospects driven by the commodity price boom that we've seen over the last 10 years just finally on the challenges brazil I've mentioned the economy has slowed and we have the Olympics and the World Cup Venezuela clearly there are big challenges there and and unrest and if you look at the fundamentals of Venezuela in terms of energy and energy supply they are extremely strong and one hopes that the Venezuelans will will will improve the prospects for the economy and the country because as I say the fundamentals are so strong and Argentina clearly major opportunities there in terms of human resources in our industry some of the strongest creative output in the world comes from Buenos Aires and Argentina but not just human resources natural resources too one thing I just mentioned finally which has not been mentioned our biggest challenge in these fast growth markets not just Latin America but Asia central eastern Europe and the Middle East and Africa in the fourth quarter of last year was in currencies the weakening of the fast growth currencies the softening of the brazilian rail the argentina argentinian currency the turkish lira the the the russian ruble all of them we saw devaluations in the q4 of last year of anywhere between 5 and 28 percent and these have to work their way through the system this is a result of the tapering that is threatened or coming from will inevitably come from the united states and the impact on the growth economies that is one of the biggest short-term issues that we face as a company but also I think as the region as a whole but having said all that our view on the growth prospects of the region and the constituent countries countries remains undimmed and we remain extremely bullish on Latin America and countries such as panama as well thank you very very much that has been a very thorough presentation of different perspectives on Latin America since we're very short in time I would like to invite you for three questions for those asking questions I just remind you be brief and be very clear about who you're addressing your question to see louise perfor yes louise please yes I wanted to know a little bit more about the can you Guillermo Martinez from la prensa panama I wanted to know a little bit more a little bit more about the social gap and specifically if you can talk about panama recently in january oxfam published a report in which it showed that one percent of the world was keeping half of world's wealth and in that report it showed that I'm sorry that the policies that governments are developing are addressed to that one percent of the world's population I wanted to know what's your intake on that do you have that same idea and could you say how that works for panama who are you addressing your question to in general to you miss or get that and if possible to mr sorrell and mr quijano as well thank you I can answer part of the question remember that the panama canal is not necessarily acting as the government we are an engine for enhancing national economy we do not make decisions in regards to where the investments go I believe that the appreciation that you made is very valid the numbers or figures that you mentioned are global numbers and not necessarily the situation in panama so I believe we're all working towards contributing in the particular case of the panama canal every day we want to give more not just in sense of the direct contribution made by the canal but also we would like to be an engine behind the economy so that there's a better distribution of wealth through employment because it's not just about subsidizing it's also about finding a way to give opportunities so that everybody can be productive in the subsidized environment when you just give without giving any jobs to people that doesn't make the country more productive and in order to have that sustainability level that we spoke about here we have to be a very productive country and I don't mean that we need to have big companies I'm saying that we need to have that engine of job creation and we need to make our efforts like any other government in Latin America and the world so that we can have the opportunities to have more balance I add to that as well just as a spokesperson for the travel and tourism industry we represent nearly 10 percent of global GDP and and employment at the same time and what is I think a positive influence of our industry especially is that we create jobs in distributed locations across geographies so second tier cities as well as capital cities and at the same time in doing that we do it at probably the lowest cost per unit of investment it's the most cost effective way for countries to create jobs and opportunities also at entry levels and many of our senior executives started by their first job coming into the global workforce by coming into the travel and tourism sector and so we see ourselves as a force for positive growth today we employ about 10,000 people in our hotels throughout Latin America and we would see that number going to 12 or 13,000 and that's just our hotels and of course the small and medium enterprises that are again stimulated by the presence of hotels and the influx of capital and cash that comes with the growth of travel and tourism we see as a force for improving the social situation throughout this region and also in many of the fast-growing markets around the world just Arif I think said it very well one of the the benefits I mean for example if you look at China if you look at India if you look at Russia if you look at Brazil literally hundreds of several hundred millions of people have been brought out of poverty into the middle class and that has happened in you know in the case of China from Deng Xiaoping's famous speech in 1985 so you've seen an industrial revolution which has drawn agrarian countries primarily agrarian countries into industrialized countries in a very short unprecedented short period of time and has created the sort of tertiary industry I was in China last week for a week at the China Development Forum where this point about tertiary uh tertiary service sectors like our own like the travel and tourism industry are becoming more important however I do agree with the point behind your question what has happened since layman since the near financial collapse that we saw in September 2008 is a world of cheap money and there are two aspects of government policy that have to some extent created what you're talking about that is the the half of percent the one percent that owns if it's half or whatever the proportion of the world's wealth there and the firstly cheap money has benefited probably the rich more than the poor the second thing is when I left school university in the 60s that the prime focus of government policy was maintaining full employment that is not the prime purpose of government policy anymore the prime purpose of government policy in most countries of the world is to prevent inflation and it's the rate of unemployment that an economy will suffer at zero close to zero inflation that's the critical issue and you see rates of unemployment which are extremely high for example in Spain 25 percent general unemployment 50 percent amongst youth and where I think you're absolutely right is that this is an untenable situation uh in the longer term that if you have 50 percent or even 25 percent or even 15 percent which you tend to have is say in the UK or the USA of youth unemployed that is socially unacceptable and and the problem is in the private sector there's too much of an aversion to risk multinational companies sit on about 4.2 million trillion dollars of cash net cash relatively unleberaged balance sheets post layman and the reason is they are unwilling to take risk risk taking risk is the only way that we will generate jobs not just in the small business sector which has been referred to before but in the bigger industrial sector too and I think there's a critical issue so the answer to your question is I think it's half wrong because we have seen a a social revolution and it's half right because it particularly in the short term in in the last five six seven years we've seen inequality developing to uh I think an unsustainable degree well if we if we'd had more time this would have been a fabulous debate my Martin because although largely I agree with you obviously there's some areas of disconnect the one thing that I do want to say to you when you ask that question is that you know this whole exercise around quantitative easing is actually a reflection of governments in 2008 as Martin referred to it actually realizing and recognizing that this problem was too large too structural and too unsustainable so you know what we did we kicked the problem down the road okay by increasing the liquidity in the system to incredibly unsustainable levels we've actually deferred the problem today after tomorrow not even tomorrow and the reason why we got there in the first place was frankly greed all of us were guilty of greed we're now at a point where 47 countries around the world are going to be having elections in the coming 12 months and what that means is that we're entering an era of populism okay because no government wants to take the hard measures that are necessary including the slowing down of quantitative easing in order to be able to address and reflect some of the issues that they need to focus on so again we're not going to have any of that so we will continue to live in cheap money and we will continue to live in the era where businesses will be able to access cash and like Martin said they'll essentially be saving their own cash and borrowing cheap money now what all of this is telling me is actually something else that I refer to as the hunger of liquidity liquidity finds its way into some very very weird places and some very weird outcomes so for example Turkey is a country where we've all known for 10 years that the Turkish current account deficit is frankly unsustainable it's at 90 percent but why is it that all of a sudden this year there's this massive run on the currency again going to back to a point that you mentioned and all of a sudden people are beginning to get concerned about the resilience of the Turkish economy the reality is that the hunger for liquidity has moved elsewhere and people are now beginning to look at the Turks as being a politically unsustainable system so politics finance and society today are coming together in a way that is absolutely unintangible unintangible you know what I'm trying to say unravelable and and we're in a scenario which is very interesting because the world is becoming more globalized so I think we should watch the space we haven't finished the issues around social change yet lucy do we have time for one last question probably one very short and a very short answer just to conclude Alicia Gonzalez from El País Spain my question is very specific to mr. Quijano you have spoken of the importance of the enhancement of the canal what is the economic impact of the delay in such works and do you believe that this final agreement will be the last one and is the new date that has been set the final date yes any kind of delay in the works will definitely constitute for us a cost an additional cost because we expected that before the end of this year we would be aligned with our new canal so the impact is significant we estimated that for the first year due to the lack of operation of such structures will represent about three hundred three hundred million dollars for the Panama Canal yearly on the other hand if the agreement that we have reached is the final one well I can say that I hope that this new commitment on behalf of the Panama Canal and not just the contractor who we deem are very serious and that is a legally binding document we hope that they understand that they are exposed to any lawsuits in the event that they breach such agreement we know that there have been different moves made by both parties to reactivate the works we are not at a hundred percent at this time but today we are at least having the production levels that we had back in October and back in November and way beyond the levels that we had in December January and definitely in February when it completely stopped so we believe that the solution that has been found for this issue has been the most reasonable one given that at this point the contractor still has a space to set any claims that they might have and as we have insisted since October November and December everything had to be done according to the contract and so the Panama Canal would always be facing any contractual obligations that we might obtained against third parties thank you very much we now conclude this press conference