 Ladies and gentlemen, good afternoon. It gives me great pleasure to moderate the most interesting session on the Latin America context. I'm very pleased to be here. My name is Alicia Barsena. I'm the Executive Secretary of the Economic Commission for Latin America and the Caribbean. I'm very glad to be with a very distinguished panel today and I'm accompanied here by authorities, by very distinguished financiers. I have two ministers and one representative from banks. I have another banker with us and of course Moises who is from the, where are you from? Because you were the Minister of Industry and Commerce and then of course you were a writer and you were many things. But it gives me great pleasure. We have with us Idelfonso Guajardo, he's the Minister of Economy of Mexico. We have Marcelo Neri, he's the Secretary, I mean you have been now, you have been confirmed as Minister of Strategic Affairs of Brazil and also in charge of IPEA, which is one of the think tanks I guess of the economy in Brazil. And of course we have with us our Chair of this session in Davos and I'm very glad to introduce Roberto Ejidio Setuba, the Chief of the Executive, by Chairman of the Board of Directors of Itaú, Unibanco, Brazil. And of course Mario Bleher, Vice Chairman of the Banco Hipotecario de Argentina, thank you for being with us. And again of course Moises Naim, who is a very good friend and I'm very glad that you were able to join us in this panel. Now what is this panel going to be about? Well, it's not difficult to guess, it's going to be about Latin America. However, what is happening to Latin America? And I would say what are the core political, social and economic issues and what is the moment that Latin America is going through? I think this is the basic question that we really need to know and we want you the experts in this round table to help us to make everybody clear of where is Latin America today. And the first thing I want to say if I may is that I think when we talk about Latin America, we need to be very careful to understand that Latin America has subregions and I would say it's not behaving the same way in Central America and Mexico as this is in South America, for example. And that the two subregions are really very linked to different contexts in a way. Mexico and Central America are very much linked to what's happening in the United States which is having I would say a good moment or a better moment than before even the IMF today or yesterday published a new figure saying that the U.S. will perform better. It would be from 3.1 to 3.6 so that's good news for Central America and Mexico because they are very linked to that large economy. While in South America we are undergoing different situations. Actually in Seppal we had a projection of growth of 2.2 percent for 2015 and reading the IMF we will have to go back to our desks because the IMF pulled it down to 1.3. And basically it pulled it down to 1.3 and we have to of course we are going to see if we agree with that. We initially both of us coincided that it was going to be 2.2 that this year was going to be better than last year and it's basically because of Brazil. And Brazil was supposed to grow importantly and apparently the numbers in Brazil are going down. So this is why I think it's so important to have two very distinguished Brazilians with us today that you can maybe give us some light. And why is Brazil so important? Because Brazil has a lot of weight in the overall average of the region because as I said before not all the region is having a difficult time. I would say Brazil, Argentina and Venezuela are the three economies that are really on the downside. But there are other economies that are doing quite well. I have to say for example I would say that some countries that are doing more or less better than Argentina and Brazil is Colombia, for example, Ecuador, Bolivia, Chile is also on the slow down but still growing. And of course Central America and Mexico are going to have a better performance. Now did our region took advantage of the boom? I mean did we really did the structural changes that we needed to do when we had good prices and when we had good I would say a good moment for Latin America between 2003 and 2008? I think we did on the social front, Marcelo. I think we really pulled down poverty and now poverty is 28% in our last figures and extreme poverty is 12%. We come from a poverty of 50% almost in the 80s. So indeed we did a lot of effort. Indeed there is a new growing middle class, let's put it that way, with new demands. And I call it new because it's not the middle class as we used to know it. But so let me turn to you the panelists. Now that the economy is slowing down, exports are also slowing down quite a bit because in 2011 our exports were growing at 23% and now it's less than 0.8%. So export is not the engine of growth. And of course consumption has also gone down. You are the bankers of our region and you know that people are not consuming as they did before. So what can we do? And in my institution we believe that investment has to come back. That that's the only way this region can really achieve some progress. So what do you think? Please help me. As you describe it, there's so many things going on in Latin America. But I think that basically the region is going through adjustments. Adjustments that are needed because basically the world has changed. And those changes have been affecting Latin America. Basically we have this deceleration in China which has affected drastically the price of commodities and Latin America is a region where we export a lot of commodities. So this is an important portion of the external, the exporting income of Latin America. So once this income has reduced because lower prices, our capacity to keep the imports has reduced as well. So a lot of adjustments we have to go through in order to rebalance the whole economy. And this means devaluation currencies. This means higher interest rates to cope with inflation that comes from depreciation of the currencies. And on the top of that we still have the American economy which is good news recovering. But this puts some pressure also in the monetary policy of the Fed. So this also brings additional effort from a monetary point of view for countries in Latin America. So you have pressures coming out of Latin America that will make the region to go through adjustments. We in the last decade, we have a very good decade. The region was very favorable exactly for the opposite things. Because we had commodity price going up, interest rates going down. So this was very favorable for the region. So we had a very big growth during those years. Now we are the way back, coming back to a more normal situation. So we have to adjust and probably I think that we will go through a lower period of growth in the coming years. Idelfonso, come in. You asked about the ability of Latin America to really capture the Bonanza years. To really bring in all the benefits through good times and really capitalize them. I don't think that we have been having that ability. Mexico had an oil bonus for more than a decade since 2008 to 2012. And we really wasted most of that oil bonus. And I think that also the commodity prices Bonanza or really good times in commodity prices was not really captured in the countries that depend a lot on commodity exports. We really have to think how to revert that tendency of not putting into real assets when we have good times in Latin America. Now you make a comment in terms of exports, in terms of the export is not being the engine for growth. I think the only exception in Latin America is Mexico. Because right now the growth rate of Mexico is basically explained because of the export sector. Our manufacturing is growing at 18% a year, at 9% and automobile exports are growing by 18%. So in the case of Mexico being open about four thirds of the Mexican economy are open to foreign trade. When you look at different points in crisis like the 2008 crisis or even before the 1994 crisis, what brings back the Mexican economy to growth is the export sector. And that's exactly what is happening this time thanks to the fact that the only economy growing in the world is the US economy. Now for us 80% of trade is depending upon trade with Canada and the US. And just last year, our bilateral trade grew by 13 billion dollars. That's the size of the Nicaraguan economy, just the growth in trade. So I do believe that Latin America had an undone homework that has to be done. And which is to conceptualize the importance of free trade in the region and how we can integrate strongly our value as a change in the continent. Thank you, Idelfonso, because there's a point here that I just want to bring the paradox, if I may, because that's my role to provoke. Because Mexico exports around one billion dollars a day, probably more. In the bilateral, there's more. With the US, no? The figures that you can use for, we're exporting, the bilateral trade is 500 billion dollars with the US, billion. So it's one billion and a half. One point something billion. But, but, but, my provocation is, how much of the national context of those exports is Mexican? Let me tell you. Because we believe that that's important. And that's why value chains are so important. Because it's extremely important and my job depends on it. Exactly. Well, I don't mean exactly, but I think so. Let me tell you, let me tell you what is, when we started the Maquiladora program back in the 70s, basically Mexico was just putting together parts. As you go through time, the auto decree had been converted through time. Today, there are some companies that had Mexican value added of 60% in the auto industry. And others 40, 65%. And depending upon the industry is how much value added is being done in Mexico. On average, it's 35%. But what I can tell you is that every day there is a more sophisticated and complex way to put things together with the sign. There is General Electric has a plant in Querétaro with 3,000 Mexican engineers doing the engines for the big, how do you call it? Aerospace. Not just for the planes, but also for the electric power. Here is our director of CFAM. And the point is that every time there is more value added, more design and more engineering in the process. And it goes along with developing your human capacities to really deepen value added. Now, you're right. TV sets were the number one exporter in the world. But the value added in TV sets is 5%. So, there is a long way to go in order to bring the technology and innovation in order to really deepen in that regard. But today, about 30% of the Mexican labor force is employed in highly dynamic, highly integrated industries. Good. Now, let me go to Argentina, Mario. And of course, I want you, Marcelo, to start thinking on something because you spoke about fiscal adjustment, didn't you? Right. Which, yes, has to be done. What's going to happen with the social sector? You will tell me later. But Mario, did Argentina, what happened with Argentina? Argentina started so well in 2003 and 2003 with great advancement. And, you know, what happened? What's going on? Well, of course, the period you mentioned is the period after a very deep crisis. It was perfect. No, but in addition to that, we have to recognize that the government of the president of the first government was able to recover the economy, keeping fiscal balance and keeping external balance. There were also external reasons. The fact is that if you go in an economic history book on Argentina, you never find periods where there was this twin surplus. And therefore, it was possible to grow, accumulate reserves, grow with a little inflation until these surpluses, twin surpluses, were exhausted. Continuing or even exacerbating these policies at times where the twin surpluses turn into twin deficits, of course, got this, this equilibria that we have today. That's on the one hand. The second problem has been the problem of investment that you mentioned. Investment has been very low and has been very low for a number of reasons, including the uncertainty about certain type of policies. And that is what is happening now. In addition to that, there has been a slight deterioration in terms of trade, not much because of the price of oil. And there was, I would say, disastrous energy policy that converted, that turned the balance of payment from a surplus into a deficit. And this is what has to be fixed now. But let me say something in general about Latin America. Because what we hear here is something that can be summarized very clearly. The party is over. The party for the decade is over. And this is what we can observe clearly today. And it's over because we go back to the cycles. And one of the reasons, with the big exception of Mexico, is that as a matter of fact, countries in Latin America continue to be highly dependent on the export of commodities, primary goods. If you go back to Socepal in the 60s and 50s, you will see that there are a lot of discussions that can be very, very actual, as a matter of fact, today. And this is one of the problems that I really think that the economies have. Brazil is what 60% export of commodities. Chile and Peru is too third, same Colombia. And I think that the investment should, in fact, be directed into the diversification of the economy. But diversification along lines of comparative advantage, which is gaining on the value added of the commodities. Argentina has been very successful in one thing in terms of changing the structure. And it's to go along the value added chain of soybeans. We do not export really too much of the beans. We export much higher levels of value added. And there, the comparative advantage is unbeatable. You know, you mentioned investment. And I think in the region, more or less, our rate of investment is 22%, a little bit less even. Those countries that put themselves into investment as a counter-cyclical sort of instrument are better. Colombia, Ecuador, even Chile now is starting to take shape there. Now, what about institutions? I wonder, Moises, I mean, you have been writing about the end of power and things of the sort. You have been looking at the region and at the world in a way. So what do you think about the institutions, the rule of law? Is that affecting us or not? Or is it only the external context? I know our economies are very dependent on what's happening outside. But what insight? What do we need to do? What's going on there? That's a long-standing issue. You are absolutely right. Institutions have always been weak. And there has been some strengthening in some countries, in some sectors. But in general, institutions continue to be weak. And it continues to be true that it's much easier to adjust the country, to do the economic-fiscal adjustments, the exchange rate and the fiscal and the monetary. That's difficult, but it's easy. It's doable. We know how it's done. Instead, strengthening institutions and making them work, we know it's needed. But we don't have a lot of examples in which there is a sustained, reliable, permanent, impactful institutional building. And then there is periods of crisis where the wreak havoc in institutions. So when the region enters in its turbulence associated with the adjustments we're going to have, then institutions suffer. And that has been a long-standing pattern. There are some certainties about Latin America. We know that some of the things are going to happen. But there's no doubt that, as Mario said, the party's over. There's no doubt that an adjustment will be needed. There's no doubt that some countries are going to do it better and more deeply and more permanently and effectively than others. There's no doubt that others are just going to continue to try to pull the populist agenda. There's no doubt that other countries that started very strong with reforms, and I'm thinking of Mexico reforms in education, energy, telecommunications, competition, you name it. You name it, they were trying to do it, and I hope they can. But there's also the reality that now they face all kinds of surprising events that have created a political environment that is very toxic. The political environment in Mexico is a result of the security situation and the assassinations of the students, as we know, the corruption accusations. So it is very hard to do what they were already doing, which is incredibly difficult, but doing it in an environment in which there is this public that is disappointed, frustrated, and angry is very difficult. And that is not a Mexican-only situation. If you ask me to characterize what Latin American countries will have in common in coming years and what governments will have in common is to deal with very high inertial expectations. Because we come, as you said, from a very good decade in which there was a consumption boom. The social conditions in countries like Brazil were almost a miracle in terms of the number of people that were lifted out of poverty in Mexico elsewhere. Things were going well and people were eating more, people were consuming more. And that kind of expectation is now deeply ingrained. So now these governments will have to go to their publics and say, you know, there's going to be less of this. And that is going to unleash all kinds of difficulties that some countries are going to manage better, other countries are going to go or continue to go on an all-out war on checks and balances. We have seen in Latin America another common trend is that governments trying to curtail the checks on their power. We have seen governments throughout the region trying to control the mass media, to control the national assembly, the parliament, to control the legislature. You can see in a lot of these countries where governments and politicians are trying to limit the institutional setting that actually characterizes a democracy, which is that you have a government, a president, but the president has a set of constraints and these governments are going against it. And I finally, again, there's at the end of a commodity cycle or supercycle. The commodity supercycle in Latin America fed a political supercycle characterized by populism in a lot of countries. In some countries that went beyond the supercycle of populism, it became the ex-cycle, which is the extreme cycle. Countries went really crazy on populism, very extreme examples, and I think, of course, of my own country, Venezuela, I think in examples in Argentina and in others. And the consequences are there for everyone to see. It's a tragedy of unimaginable human suffering that it's not clear how it's going to end. But I finished just by saying that what is going to characterize Latin American coming years is these constrained, stressed governments trying to fight the constraints and dealing with a very angry public that has now two subjects in mind. One is not to lose the standards of living and the income and the possibilities that they achieve during the good years, that's one. And a second, and I think it's to be applauded, but it's dangerous because it has negative consequences, too, in terms of the political dynamics it provokes, is the end of the peaceful coexistence with inequality and corruption. Latin America for many, many decades took for granted inequality. Inequality was a fact of life. Latin America is said to be the region in the world with the highest inequality, and so inequality was something like the weather. You just lived with it. Now, not anymore. Now, people are not taking it anymore, and the fight against inequality has become a very important issue. That is in the agenda everywhere. And the second very much associated with this is corruption. People are not willing to sit down and just take it anymore. Unfortunately, the war on corruption is also driven by scandals, is driven by a lot of effervescence and media and publicity, and not with a lot of institution building of the kind you mentioned. That is the way to ensure that opportunities for corruption and impunity are less. Thank you, Moises, and this gives me very much, you know, Marcelo, when people went to the streets in Brazil. Remember that. It was not really, not yet the moment we are living now. And I remember talking to you and other people. What happened? Why is all these people outside? In Rio, in Sao Paulo, many, many students and young people were out. And I would say that, yes, the cycle is back, but I think the region is a little bit more resilient than it was in the 80s, for example. I mean, we are a little bit better in institutional frameworks, in macroprudence policies, so forth. But, of course, we still have a lot to do. But coming back to this question of Moises, people are angry, and it's true. They are angry because of inequality, they're angry because of corruption. And there's another thing that I wanted to ask you about, and that is this terrible, I would say, contradiction between public goods and private goods. People inside their homes have satisfied more or less their durable goods. They buy televisions and this and that, getting indebted or whatever, but they buy their own things, their household. Very good. Outside, outdoors, the moment they step out of their house, no public goods. Security, corruption, I don't know. I mean, drugs, no transport. So how do we cope with this? Number one, and how do we impede that in Latin America happens what in Europe we need adjustments, of course, but if we only go for fiscal adjustments and we stop investing in social programs, that also could be a problem for us, isn't it? Marcelo. Sure. I believe this is really a new decade, the 2010s we see. First, growth was good for the whole continent in different speeds across countries. This is not so much true these last years, these last two, three years. The last decade was very good in terms of inequality. Inequality fell almost all over Latin America from very high levels. It's not true anymore. Latin America inequality has been stagnated since 2010. The same thing in Brazil. So inequality, the two parts, the growth part, we are not doing so well, and the inequality part also we are stuck. And I believe we should try to recover these middle path. We have to do both things at the same time. Inequality is still very, very high because actually all this fall of inequality, we are back where Latin America was in 1980. In Brazil we are back where we were in 1960, very, very high level of inequality. So the social agenda, my role here given by you is to be the social conscious of... So I believe first we have to do the fiscal adjustment, talking more about the Brazilian case. I think this is an opportunity where we have to evaluate which programs, especially in the case of Brazil where we have a very high tax burden, a very high public spending, is the opportunity to separate the good programs from the bad programs. So we should not just be cutting things, but cutting things, looking at the more efficient and equity. It's really an opportunity. I think in the case of Brazil, there is some sort of a paradox where, for example, you get 2012, 2013, and probably 2014, you had very slow growth GDP per capita GDP grew something like 0.8% a year, so very small, but per capita household incomes grew at 5.5 per year. And it's growing for all over, all the segments. So we are not anymore in the decade where the poor get the highest gains. Everyone got gains in terms of all over the income distribution growth for everybody, but not back it by GDP growth. And I think this didn't reach yet. 2014, labor market in Brazil, which is the main source of income, is still growing, not only very low level of unemployment. So the political difficulties will be quite hard when, if you decelerate, if you take back these household income growth, although GDP growth is very small. So, for example, last two years, or last year, for example, had something like 2.7 million, low middle class, another 1.6 to high middle class in Brazil to a traditional middle class, so the process is still going on. And since we are a democracy, you have no feedback, not only for social welfare. And part of this, the point you are mentioning, that how is life outside our houses, part of it is getting worse because of the good side. It's a collateral effect, people bought cars, and we have to live in a traffic jam every day because the public investment didn't follow at the same pace. So I agree with Moisés that we have very high inertial expectations. And with additional point, which is worse than that, I think our ability to go through downturns is much... we are much less tolerant than the gains we perceive when it went up. So I think this politically, I think, and to some, just to put a point on the table, it's a very... maybe true for Latin America, but part of the protests in Brazil, which is not... First, the agenda of protests didn't go through the elections. I mean, it didn't affect very much the outcomes of the elections one year later. So we have to be careful, other issues dominated the scene. And the point I would like to raise is the following. In part, the protests, people don't like inequality, but people are also annoyed by the fall of inequality for political economic reasons as well. Basic, simple political economic reasons. So we are stuck. If inequality stays, it's bad. If it falls, it's bad for some. What I see is our possibility, especially in the case of Brazil, is that we have a hidden variable, which is uncertainty. By means of a confidence shock, that's what we are trying to do now. I think it's a way to improve them. Everyone can win. It's different from income inequality, where you have good news for some, bad news for the others. I think a confidence shock is good for everyone. So I think this is the... Confidence. Very important. Roberto, what do you think? I think listening to everybody here, we have a very common ground, which is very clear, that we recognize that we had very good years in the last decade. We did not take the advantage of those good years in order to create stronger institutions. We did not that in Latin America, mainly. We basically did not the investments that we could have done. And most countries, especially in Brazil, they increased consumption, which was very popular, very good for many perspectives. But now that this cycle is going out, it's ending, we have a problem because we are not able to keep the good news, especially for low-income people. Those were favored by that cycle. I think the challenge that we have now is this one, how to keep the improvements in place, the gains, the social gains in place. And I think that one thing that was very clear in Brazil in those manifestations was the fact that people is becoming tired of inefficiency, of mismanagement of the public sector, of corruption, because at the end of the day, those things basically reduce the output. And any kind of output, social output, physical output, the inefficiency of corruption makes the possibilities much lower. So I think that we will see much more pressure now because when you are improving everything, corruption is not felt because things are improving. But when things are not improving anymore and you have to become more efficient and you have to do everything that's possible to improve the output, then corruption becomes much more felt, much more severe. People become much more aware of that. So I think that probably we will see this becoming, as is it in Brazil right now because of the Petrobras issue. I think the discussion is on the table. And laws are on the table. So the Supreme Court is called to discuss which is a very big issue, that we will involve clearly a lot of politicians, a lot of big companies, and this will be something very important to see how we will get to the other side. Let me go to the public, if I may. Mario, unless you want to... They say in Congress, there's a chance to replay to... Of course. Please. Moises made a very good point in terms of institutional building. And he had priced the Mexican reforms. And he's in the center of equality and trying to make society more just. And if you look into what's happening in Mexico, once you open the economy and you have all those rigidities in your system, who is really getting the gains from opening the economy? The big companies. The ones that are linked into the international system. But when you try to get winners in the small and medium-sized firms, the fact is that for them, was more difficult to get cheap electricity, get financing at competitive prices, trying to buy inputs for their industry at competitive prices when we have very, very highly concentrated markets. The OECD made a study where they conclude that Mexicans were paying 40% more than other citizens in the world for the same goods, thanks to highly concentrated markets. So when you look at that, you really need to open opportunities for everybody to really join into the productive process. And in order to increase productivity, you have to open these opportunities for everybody. So in the center of the effort that Mexico has done in six economic reforms plus other five that had to do with the judiciary system and electoral reforms, you need to really take into account that you are trying to make the country a country that is more ready to open opportunities for all. The implementation of the reforms where we are right now had to happen soon for the people to support them because if not, they don't know what you are talking about. As of January, the guy sitting right there has produced electricity prices for the industry by 16% for the commercial sector by 10%, for the domestic households by 4% and 2%. So you have to really make people feel the impact of what you are doing. And at the same time when you are moving ahead, you have to make financial credit more available for small business and to really give opportunities to society. The problem is that the guys that are always opposed to these type of changes, at the moment we were approving this by consensus of all political parties, they could not stop the process of consensus-building. The fact, and he is right, at a point in time when we have a problem in Iwala, the state of Guerrero, it was the right excuse for all these groups opposing the educational reform, opposing the energy reform to really take that as a lead and come out in protest. Now, let me also make very precise about the size of the problem. Mexico has 32 federal entities. Of those 32, the problem is highly concentrated in two of them, Guerrero and Michoacán. Obviously there is a political movement that has been extremely successful in portray that in a bigger image for the country. I'm from Monterrey, and when you look the country, it is exactly the tail of two Mexicos. The center northern part of Mexico has been very dynamic, highly integrated, and the south part of Mexico. Why educational reform was very important? Because I'm the result of public education in north of Mexico and I can assure you that somebody being born on the same year than I was in Oaxaca will not have exactly the same opportunity as I do have because Oaxaca has been kidnapped by a union that is really restricting the development of human rights and the development of children in that part of the country. So what the president did the last week of November is that we have the responsibility to guarantee the same conditions for justice, security and opportunities for those southern states than what we have in the rest of Mexico. And I agree with Moises. This is the next challenge for Mexico. If we do not guarantee exactly the same quality of life for all Mexicans, then we are jeopardizing the future of the Mexican development. But the fact is that's exactly where the next effort has to be concentrated. Realizing that not just putting things under the carpet for the last 30 years is going to solve the problem, but you have to face the challenge. It's a good point and I think it coincides with confidence, corruption, transparency. How do we bring that back to the equation because our countries are facing this for different reasons. I wanted to bring somebody from the public that we have around us because many of you are very knowledgeable and just to say that in terms of reforms just let me put an example of the fiscal reform and I'm sorry I saw Mauricio Cardenas step away, but he's undergoing a very important fiscal reform in Colombia and his major problem is political, not technical. It was the same in Mexico I think and there are other 12 countries that are undergoing fiscal reforms to try to go for more progressive taxation. It's not the case in Brazil. You are already over 30% although indirect taxes. But anyway, it's not the case in Brazil, it's not the case in Argentina, but it's the case at least in Central America and Mexico the tax burden is very low. However, the companies and the entrepreneurs don't like this. So I would like to listen to some views from the audience. We have also Ricardo Hausmann here. Do you think these are the problems Ricardo? Do we have to go further? Do we have to you have spoken many times about diversification of productivity, the low productivity, the innovation, the technology where does that stand? I don't know if there's a microphone for Ricardo. Thank you very much. It's a pleasure to be here. I was listening very attentively to the discussion and I think that the it has a little bit of a flavor of pessimism and it has a little bit of a flavor or very conservative in the sense that we want to preserve the past, the gains of the past not lose the gains of the past and how can we ensure more equality and our only idea, our only contribution to the world is conditional cash transfers which is sort of like palliative or very long run but I didn't hear sort of like a discourse of ambition of imagination of okay so what are the new things we're going to be doing that we're not doing now? What are the new things that we're going to be exploiting with the technologies that are coming up? Are we going to be a player of those technologies? Are we just going to be observers of what other people are doing? Is our agenda to balance our books and to improve the rule of law and institutions or do we have something that is really more ambitious in terms of the imagination we have about our future? The European Union is a region with 20, how many countries? 28 countries and probably 35 languages. We're a region of 20 countries and one language plus Brazil, right? Important? Very important. Because Latin America has a vision of itself or the only thing we've done is we've transformed Mercosur into a bad joke. We've created a bunch of institutions that have done nothing to the collective defense of democracy. We have laughed our way out of the democratic charter. We have in this moment a human catastrophe happening in Venezuela and there is no diplomatic initiative of anything. So where is the ambition, the super ego of this region, the imagination, the aspiration of this region for the 21st century? I am sure, I'm sorry to not hear it. Oh, very nice. Yes. Great. Wait, wait. No, no, no. Ricardo, this is fantastic. I want to thank you very much for that intervention and I have Gerardo Candiani in front of me. Yes, and I tell you why Gerardo, because you are a very powerful entrepreneur in Mexico and one of the initiatives that I think has been an important initiative has been the Pacific Alliance, for example. So what are the possibilities of the Pacific Alliance and Mercosur? We just had a dialogue in Chile between the Mercosur and the Pacific Alliance and a lot of opportunities are emerging from that, from intraragional cooperation, from intraragional coordination. We only have 19% of intraragional trade. Europe has more than 60. That means that 60% of their exports go to Europe. In our case, only 19 and we are going down instead of up. So is this initiative something that can bring innovation, creation? What do you think? You can answer in Spanish yes, or give us your view. I can speak in Spanish. I think we all speak Spanish here. I think the process that we've witnessed in Mexico is very important. All of the reforms that we've made over the last couple of years have made Mexico a more competitive country. The level of integration and penetration that we're witnessing in Mexico together with North America is around 30-40%. So I think in the coming years what we will see is a very important process. Ongoing reforms which will fundamentally change Mexico's situation and our links with Latin America, the Pacific Alliance is also a very important approach, very relevant. What we are facing the significant challenges ahead have been touched upon in this discussion and what we're behind in the private sector is how to push growth, how to fully implement the reforms and our other priority is capacity building, strengthening the Mexican institutions. We are promoting the state of law, the rule of law, securities, justice, democracy and doing or putting an end to corruption. Now that, certainly would be of great benefit to Mexico would also be in harmony with what's needed in the rest of America. I think we're on the right track. I think the major issue which we also need to bear in mind is fiscal reform. What we want to see is a strengthening of internal consumption and demand strengthening the market, investment and creating jobs. What we are seeking at the moment are changes which as the Secretary have said is the importance of building the domestic market which is so important for Mexico. We are continuing on a path of integration, opening up there to historic developments with the Pacific Alliance. We need to continue on the path of reform implementing those changes that are necessary for Mexico to continue moving forward. Justice, democracy and corruption, 5 points, 5 key points. Let me come back to the panel and let's see if we can answer or not answer but at least step up our expectations, Mario. I want to comment on Ricardo. I generally agree with him in the point that he made about the vision generally because there are things that have to be taken into consideration. You cannot build if you don't know what has been done wrong. And pessimist is no more than an optimist with some experience. That's not a particular point but I agree with him that you need a vision. You can look at this in the following way. We have better institutions than we had before. We have better economic policies but the institution is not as good as they should be. The economic policy is not as good as it should be. Why? One of the reasons is because we tend to copy institutions. To take a model and copy it. And I think that in many cases I'm not being the appropriate institution. For example, if we do have these super cycles we need institutions that deal with the super cycle. And economic policies that deal with the super cycle. I personally for example think that Latin America has made bad usage of the idea of central bank independence and I can elaborate on that in a different opportunity it was the attempt to copy institutions without developing our own and those that really are needed for our own purpose is one of the problems. The second problem is the idea about the role of the government. We saw that the less government the better and it's not the case. The better government the better but not the less government the better. If we are talking about investment we are talking also about infrastructure. Who is going to finance infrastructure in Latin America? What about the development of human capital? You need better government you need less corruption or whatever you want to do in order to improve the government but that's not necessarily you need less government but we tend to adopt these rules that came from other places and I think that there is where the vision should be. What institutions are really appropriate for the needs and for the conditions of the region? What is our ambition Moises? I'm going to argue against ambition and against imagination. I'm on us. All right. I like it. How can one not agree with the appeal to do more creative imaginative things but let me give you examples of imagination and ambition in Latin America. Who would disagree here that one of the most imaginative and ambitious leaders we have had in Latin America is not Hugo Chavez. He was ambitious. He changed the country. He had the ambition to change the whole region. He exported his revolution. He developed links to other places in the world that we have not had before. So if you go down the list of imagination, of ambition of Hugo Chavez, he's at the top. He would be an answer. Here I am. If he was here, he would tell you what are you talking about? I have been ambitious. I have been my imagination run wild. The same Nestor Kirchner, Christina Kirchner, Daniel Ortega. I am being facetious. I am a little bit. I am provoking. You see my point. My point is, of course, how can one not agree with Ricardo? Of course, his description of the embarrassing behavior of some of the large countries in terms of what's happening in the region and in diplomacy, in letting... A lot of the things he says are impossible to disagree with. But my point is that it is not enough to prescribe ambition and imagination. We need to define how and who. Actually, whose ambition are we talking about? Societies. Well, Hugo Chavez will tell you that he represented all of the poor of the country. Christina Kirchner and Lula and Dilma will tell you that they represent the nation. There are some policies. There are social policies. All everything they've done is representative of what the country wanted and is unprecedented. And look where we are. So all I'm saying is, of course, we need ambition. Of course, we need imagination. But let's be very careful on how we define who's ambition, whose imagination and how you execute. As you know, ambition and imagination without execution or with bad execution or with bad ideas are very dangerous. Imagination and ambition can be a variant of populism that is very dangerous. I will just take up on Ricardo's original intention about ambition and imagination. Give you very simple examples. Of course, I understand that warning that Moises is making. But in Alianza Pacifico, one of the commitments we did besides liberalizing trade within the four countries was eliminating visas for Peru and Colombia. Tourism from Peru and Colombia has increased by 62% in Mexico in the last six to seven months. Obviously, you have a risk. You can get some criminal traveling, but then you have to use the right technology, the right cooperation with the countries to really prevent and secure your borders against organized crime going across. You are not going to hurt your touristic sector by doing restrictions all over the place. The other example, and we are still fighting with Alianza Pacifico, why are we so protective of fifth liberties in flights in the region? We should open skies. We should liberalize maritime movements of ships in the region. Do not make any restrictions on cavatash stopping within national territory because our logistics of communication are terrible. That's why our value chains are not linked. So if we really want Latin America integrated, we have to do everything is in our power to really connect Latin America. And today, we are still far apart from doing it. Even Alianza Pacifico, yes, we receive half of the investment going to the region, yes, we are a very important part of GDP, but Latin America without Brazil and without Argentina is not complete. So the next step has to do at least with the regulating the way we do business together. Making more efficient borders, facilitating custom procedures, and really making things happen. Because otherwise, rather than going to facilitation of trade, I mean, we used to have a free trade in the auto sector. All of the sudden, it was canceled unilaterally by Brazil and Argentina. We have to renegotiate the partial opening of trade. The three years before that, Mexico had a deficit. But when we started having a surplus, our neighbors didn't like it. And so, the point at the end is why should we stop the market growing and benefit all the region by just liberalizing trade? So at the end of the day, I think that there are actions that we can take that can be really innovative and challenging to really open the region for a more prosperous future. Marcelo. Okay, to get Ricardo Hausmann provocation, I think it's education, of course, is the key. It's good for growth. It's good for inequality. It's good for imagination as well. Good imagination. And to get his point, I think in Latin America, Brazil in particular, but Latin America, we are very close immigration-wise. We have to open our borders not only for trades, for capital, but for people. In Brazil, we have only 0.3% of immigrants for a generation. So we have a big, big the second thing on education is the youth. I see a very I'm very concerned because although the youth is improving in terms of education and other dimensions, they are not improving during the youth years. We are having and the youth in Brazil has in Latin America as a whole has never been so big in the past and will not be as big in the future. So we really have to invest. To work and to see the future, the imagination will come from the youth. And I think our youth is not, I mean the protests come from the youth to large extent, but the youth themselves they don't know what they want. Their parents don't know what they want and the government even less so. So I think you really have to engage, use technology, but especially I think we have education challenge. We have the instruments that we didn't have before, but we have to use them. You know that we are making a radiography of the 22 percent of young people between 15 and 30 years that do not work nor study. We discover a very interesting fact. I know we are a minority here, but women, the women factor is very important. No, and I'm very serious because if all the women could go into the labor force in the same conditions as men in terms of time because they don't have to take care of the elders or the children or whatever and they are paid the same thing, our calculation is that poverty will diminish from 2 to 10 percent according to different countries. 10 percent in Bolivia, 2 percent in Argentina because you already have a lot of parity, but I mean, it's serious. We have to look into that in that segment of population with an open view. Young men, young women that are very well prepared because today our young people are more educated than ever, but they don't find jobs. Roberto, what are you saying, ambition? The good ambition is good, but I totally agree with Moises. I think that when we talk about vision, strong vision and ambitions and things like that usually especially in our region, it comes together with a charismatic leader and I don't think that's what we need. Although the region is probably the best region in the world to produce charismatic leaders, we are very good on that. But I don't think that that's the solution. I think that over time we have suffered a lot because of that. I think the way to go is to build strong democracy, strong institutions. A lot of emphasis on education, I think Marcelo is correct. Education is the key for the future, is the key for creating institutions. So I think that we have a long way to go. There's no miracle, there's no vision that will solve the problems, but we have to work very hard. Thank you, Roberto. I want to thank you all because I think this panel has been very interesting. I cannot finish without saying that my quest in life is equality. Because I believe that all of this, trade, economics, da, da, da, da, is to have people have a better life, better welfare. What I believe we need in Latin America is structural changes. That is, how do we move from low productivity to high productivity? Innovation, technology, knowledge. These are the things that we're missing. Education is one of them, but it's not the only one. We have to make sure that we are all up and running in the new technologies. We're very far behind. So I hope we will be able to do something. You wanted to... Do we have a minute, Fernando? Anybody that wants a young man, I cannot say no. He's between 15 and... He's between 15 and 30. He's probably, you know... The 78% that is... Yes. Thank you very much. My name is Andres. I'm a global shaper from the Caracas Hub in Venezuela. And I just wanted to add that reflection and also sort of a question. First, I hear... We hear a lot about making democracy stronger and going against corruption. But it ends there. I mean, corruption, we're not going to get rid of it if we don't know and tell people and know the causes. For example, is it due to immature politicians? Is it due to lack of transparency, lack of accountability? So that's something that needs to be addressed and not the people, but the politicians. People that need to take care of the rule of law. And the second one and it's very important is that it took this panel to talk about the youth one hour. And we have a demographic dividend in Latin America. We need to talk about the youth even more in order to you know, to have better results. Thank you. Thank you. Thank you, Andres. I think you are the perfect ending of this panel. The answers will be I suppose, responded in the dinner, right? Fernando, in the dinner of Latin America because you are raising something that I really think is very important. Young people are also in need of information. They want access to information, open government, open everything and they want to be part of the accountability process, I think. And we have to open up our institutions to be able to be looked at by the young people. So thank you very much all. Have a very nice rest of the day. Thank you.