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Issues to be addressed
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
2. Latin America between two policy paths3. The policy challenges in the region4. Lessons from the Colombian Experience
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
1. Emerging economies have become engines of economic growth.
2. During the last three decades developing countries have experienced a profound transformation driven by two components: On the one hand a rapid demographic transition. Since 1980
the World population has increased by 2.5 billion people and 95 percent of that growth has taken place in the developing World.
The other element has been a dynamic period of sustainable economic growth. In 1980 developing economies represented 33 percent of the World GDP and today that number is closed to 46 percent.
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
1. By 2050 19 of the top 30 economies by GDP will be countries that we currently describe as ‘emerging’
2. China and India will be the largest and third-largest economies in the world.
3. Eight countries – India, China, Brazil, Russia, Indonesia, Korea, Mexico and Turkey – will be responsible for most of global growth up to 2025
4. Emerging economies will account for 68% of global growth by 2030.
5. In 1980, 5% of goods were sourced globally. By 2000, this was 20%. By 2025, it will be 50%.
6. In 1980, world exports accounted for one-sixth of global GDP. Today it is a quarter. By 2030, it will have risen to a third.
7. By 2030 the urban middle class will rise to 42% of the global population. The number of people with daily income of $10 to $100 a day will rise from 1.8 billion today to 4.9 billion by 2030.
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
According to FAO: Demand for food could increase 50% by 2030
Demand for water has been projected to rise by 30% between 2000 and 2030
The International Energy Agency has said energy needs will grow by 40% by 2030. According to BP China represents 20.3% of the World Energy
Consumption (The world largest energy consumer in 2010 for the first time over the U.S)
Natural Gas consumption has experience its strongest consumption rate since 1984 (7.4%)
Coal share in world energy consumption has reached its highest level since 1970 (29.6%). China represents 49% of the world coal consumption.
In 2010 Global Biofuel consumption grew by 13.4%
How does Latin America fit in this panorama? Between 1980 and today some changes have occured…
1. The inflation tragedy is over: in 1985 regional inflation average was 159%, today is below 6%. This means that fiscal and monetary prudence have become policy principlkes.
2. Debt is no longer a threat: Debt to GDP ratios in the region have passed from 40% in 2002 to 20.4% in 2011
3. Between 2003 and 2011 the region experienced a growth average of 4.4%...the highest since 1967-1974
4. Democracy has expanded in the region with few exceptions…
5. Regional exports have increased 160% betwee 2002 and 2010
6. In 2011 the region faced a record number in FDI reaching almost 113 US$billion
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
Population
Close to 600 million people
Average age between 24
and 28
Per Capita Income in PPP
close to US$10.000
Poverty reduction
64% of our population is a expanding middle class.
During the last decade 40 million people have left the poverty line
Life expectancy has increased from 65 to 75 years.
Child mortality has been reduced by 50 per cent.
Literacy rates are above 94%.
Mobile phone penetration has increased by 78 per cent.
Internet access has increased by 33%
Healthcare coverage has increased by 50 percent.
water and sanitation coverage has reached 80%.
Commodities in time of Demand
10 percent of the World oil reserves.
6 percent of the World Gas reserves Almost 50 percent of
the World cooper reserves. 50 per cent of the
World silver reserves.
13% of the World iron reserves
26% of the World fertile land.
24% of the World beef supply.
Bio Reserves
20 per cent of the World
Biodiversity is concentrated in the Amazon
ring. Almost 50% of
the World potable water
supply.
57% of the world primary
forest
Policy Changes match four range of opportunities
The change process and the potential for the years ahead has happen by accident and it is a consequence of the consistency, congruence and sense of urgency that a group of countries have adopted as their policy cornerstone. Brazil, Mexico, Colombia, Chile, Peru and Uruguay represent 70 per cent of the region’s population and 75% of the regional GDP.
This group of countries have common characteristics that explain their outstanding performance:
1. The strengthening of Liberal Democracy
2. The adoption of an institutional Framework in favor of foreign and national investment.
3. The construction of a sound and sustainable social safety net.
4. The expansion of export markets and the commercial integration with the World (FTA’s)
5. A public administration driven by results.
6. A sound Macroeconomic Administration driven by fiscal and monetary prudence.
7. Better regulatory environment
8. Construction of strategic infrastructure.
9. The consolidation of an innovation agenda leaded by an improvement in education.
10. A well capitalized financial sector and the constant expansion of financial services. Today countries like Panama, Dominican Republic, Costa Rica, Salvador, Guatemala,
Honduras, Belize, Paraguay, as well as most of the Caribbean States, are following that line of behavior
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
Policies have been the root of Latin American Changes
Building Modern
Democracies (5 parameters)
Security
Freedoms and Private Initiative
Independent Institutions
Social Cohesion
People Participation
A dynamic Economic
transformation
Investment Target Policies
Maintaining Fiscal and Monetary
transformation
Integrate commodity and knowledge based
economies.
Expand export markets
Create an Entrepreneurship culture
(Innovation agenda)
Closing Social Gaps
Improve education (quality, coverage,
vocational)
Insure Universal Healthcare
Formal Job creation
Access to Finance
Climate Change,
Environment and Energy
SustainabilityExpand renewable
sources
Install an energy efficiency conscience
Improve waste management
Protect the Amazon Ring
Reduce Co2 Emissions
1. The current context of Emerging Markets and the evolution of Latin America 1980-2012
Despite the changes that have been achieved some important challenges remain…
2. Latin America between two policy paths
The regional current Political Map is a “Tale of two cities” like the Charles Dickens Book… (The ALBA and the non Alba Model)ALBA
(Leaders: Venezuela, Ecuador,
Bolivia, Nicaragua and Cuba)Anti-U.S
Lack of investment Confidence
Ideology driven countries
Political Polarization
Modern Democratic Center Countries (Brazil, Colombia,
Peru, Chile, México, Uruguay, Paraguay, Panamá, Republic Dominican, Costa
Rica, etc)
Cooperation with the U.S
Pro Free Trade
Investment Confidence
Independent Institutions
Political Stability
State Long Term Policies and Mgt by Results
Organized Party Systems
The Democratic Center takes the lead: • Investment grade countries are in this Group: Mexico, Brazil, Chile, Colombia, Peru and Panama.• Countries with more market access through FTA’S are in this group• Countries with more FDI are in this group• Countries with more Middle Class Expansion are in this group.• Better fiscally sustainable social programs: Chile, Mexico, Brasil and Colombia.Only the group of Countries in the Democratic Center will become the regional active participants of the Emerging Markets Boom…some of the ALBA Members will see some benefits, but without solid long term development agendas, they will face transitory profits…
Venezuela
InflationReduction in oil
production
Brain drain
Social conflict
InsecurityPrivate initiative in
Jeopardy
Bolivia
Loss of citizen support
Quality of live deterioration
Lack of private initiative.
Loss in private investment
Ecuador
Press Liberties in danger
Lack of long term private
investment.
Political stability at the expense of higher tensions.
Oil driven political power
Nicaragua
Institutional deterioration (Reelection without
constitutional authority)
Corruption
Private initiative: Uncertainty
Shameful Chavistas
2. Latin America between two policy paths
Bad policies are deteriorating the political and economic context in the ALBA Countries….
PeruHumala Challenges
Maintain Investment Confidence(The mining
royalty debate)
Improve social
expenditure targeting
Improve Labor markets• Combat
informality• Improve
productivity
Continue with International insertion• Implement the
FTA with USA• Pacific Agenda
with Colombia, Chile and Mexico.
Security
Human Insecuri
ty
Legal Insecuri
ty
Political insecuri
ty
Individual Liberties
Property rights at
risk
Limit freedom of expression
Limit freedom of press
Independent institutions
Courts controlled
by the Executive Branch.
Independent institutions are
controlled by the Executive
father
One Party controls the Parliament
Citizen participation
Limited
Controlled
Instruments vital for political
pressure.
Social Cohesion
Class polarizat
ion
Fiscal policy is unsustai
nable
Venezuela
Challenges
Regional integration
Urban security
Drug consumption
Cost of money
InfrastructureWeak Doing Business Indicators
Foreign Policy
Brazil
The Challenges of Doing Business in Brazil
Area: 8,514,877 sq km Population: 203,429,773 (July 2011
est.) GDP: $2.172 trillion (2010 est.) GDP Composition by Sector:
Services: 67.4% (2010 est.)
Industry: 26.8%
Agriculture: 5.8% Unemployment Rate: 6.7% (2010
est.)
Exports: $201.9 billion (2010 est.)
Export Commodities: Transport equipment, iron ore, soybeans, footwear, coffee, autos
Export Partners: China 12.5%, US 10.5%, Argentina 8.4%, Netherlands 5.4%, Germany 4.1% (2009)
Imports: $181.7 billion (2010 est.)
Import Commodities: machinery, electrical and transport equipment, chemical products, oil, automotive parts, electronics
Import Partners: US 16.1%, China 12.6%, Argentina 8.8%, Germany 7.7%, Japan 4.3% (2009)
Good results but there are some worriying “TO DO BUSINESS” indicators Country DB 2011 DB 2010
Mexico 35 41
Peru 36 46
Colombia 39 38
Chile 43 53
Argentina 115 113
Uruguay 124 122
Ecuador 130 127
Brazil 127 124
Venezuela
172 170
Doing Business 2011 shows some elementes that affect Brazil as a destiny for investments (127 out of 180 in the Doing Business Report)
1. Bureaucracy2. Weak Infrastructure3. Weak Technology4. Preference to Local Companies5. Complex tax system
The Challenges of Doing Business in Brazil
Brazil in comparison to the Region best and worst performersIndicator Brazil Chile Mexico Colombia Peru Venezuela
Starting a Business
(Proceadures)
15 8 6 9 6 17
Starting a Business (Days)
120 22 9 14 27 141
Days for Construction
Permits
411 155 105 50 188 395
Hours devoted to pay taxes (Hours
per year)
2600 316 404 208 380 864
Days to enforce a contract
616 480 415 1346 428 510
Enforcing Contracts (Cost
% Claim)
16.5 28.6 32 47.9 35.7 43.7
Cost to export US$ per
Container
US$1730
US$745
US$1420
US$1770
US$860 US$2590
Brazil Infrastructure challenges
Brazil’s infrastructure ranks 74th out of 133 countries, even though its overall economy ranks 56th, according to a World Economic Forum (WEF) survey that asked firms to rank global competitiveness. Among the BRIC economies, Brazil’s infrastructure ranks similar to India’s (76) and Russia’s (71), but it lags China’s (46). Within Latin America, Brazil’s infrastructure ranking is near Mexico’s (69) and is significantly better than Venezuela’s (106), but it is far behind Chile’s (30);
Infrastructure spending in Brazil has been in a declining trend over the past 40 years, averaging 5.4% of GDP during the 1970s, 3.6% in the 1980s, 2.3% in the 1990s, and 2.1% in the 2000s. Some studies suggest infrastructure investment of 2.0% of GDP is needed simply to sustain the current infrastructure stock in Brazil.
Brazil must invest 4% of GDP (doubling its current investment) for 20 years to catch up with Chile, the benchmark in Latin America, according to our estimates.To catch up with South Korea — the benchmark in Asia — Brazil would need to invest 6–8% of GDP per year.
Source Morgan Stanley
Brazil Infrastructure challenges
Challenges for infrastructure development
Improving the business
environment. Brazil needs a more stable
and credible regulatory
environment The main issues are: 1)
regulatory bottlenecks, 2)
excessive renegotiations of
concessions, and 3) the lack of efficiency
of regulatory agencies.
Rethinking fiscal priorities. The
government needs to redesign spending
strategies and rethink priorities by 1) addressing budget rigidities,
2) reducing mandatory
earmarking in the budget, and 3)
revisiting structural
entitlements (i.e., social security
reform)
Reforming the tax system. The government intake is close to 40% of GDP, while
companies spend on average 2,500 hours per year to prepare, file, and
pay their taxes.
Reform the Police Structure
Citizen participation in the fight against organized crime
The security challenge
Mexico
ChileTwo situations
Characteristics
Economic Stability
Political Stability
Investor Confidence
Innovation and entrepreneurshi
p agenda.
Quality of live and
opportunities
Youth distrust in Political
Parties and in Government.
Aggressive protests
Dependant on the China effect
EcuadorThe political condition
Economic
4.5% Fiscal deficit
Oil price has been the driving force.
Investors distrust
4.5% inflation
Political
The President has concentrated more powers
Conflict with congress and with independent media will deteriorate as the Government pushes more interventionist
reforms
There is not a clear opposition figure
Urban security has been deteriorating
Bolivia: new problems arise
Economic
Populism platform loosing popular support
Fiscal superavit driven by more tax collections
Economic Growth above 4.6% driven by Gas price
Inflation close to 9%
Investors distrust with the exception of foreign
governments corporations
Political
2/3 of Congress controlled by the President Coalition
Hunting of all opposition leaders
Confrontation with Santa Cruz Governor Ruben Costas.
Next week 56 Supreme Court Judges will be elected
International
Under the influence of Chavez
Improvement in the dialogue with the U.S
International Market Distrust
Country Homicides per 100K
Hab
Violence cost as % of GDP (Live years
lost due to handicapped
circumstances)
Private sector losses due to
insecurity (% sales)
Violence costs as % of
GDP
Number of gang
members
Number of gangs
Honduras 43 1,31% 4.5% 9.6% 36.000 112
Guatemala
45 1.43% 3.9% 7.7% 14.000 434
El Salvador
58 1.99% 4.5% 10% 10.500 4
Nicaragua
14 0.96% 3.1% 10% 4.500 268
Costa Rica
8 0.58% 3.6% 2.660 6
Panamá 11 0.63% 2.5% 1.385 94
Central America: The security Drama
Violence and organized crime
Not the same stories
A region of different development stories
Central Americaa) 3% of the Region GDP
(US$163 Billion)b) 7% of the Region
population (43 million)c) Income inequality
d) Moderate investment levels
e) Low tax collectionsf) Fragile energy matrix
Caribbeana) 4% of the Region
Populationb) 2% of the Region GDPc) Tourism dependenced) Natural disaster riskse) Low industrial basef) Need for long term
access to markets
The China effect…
Country China Ranking as a trading partner
Porcentage of total exports 2010
Brazil 1 15%
Mexico 4 2.2%
Colombia 3 6.2%
Chile 1 16%
Peru 2 16%
Venezuela 2 7.9%
China’s influence as a trading partner will continue to increase, thus strenghthening its political and diplomatic relations with the regional key players…
China is the destination for c.10% of LatAm exports today, and is the largest trade partner for Brazil and Chile. LatAm was also the largest recipient of announced Chinese outbound investment in 2010, focused on energy and mining.
U.S-Latin America relations The evolution of U.S Latin America Relations…from Doctrines to specific
policies… Doctrines
Monroe Doctrine
Teddy Roosevelt “BIG STICK”
Howard Taft “Pan-American Union”
FDR “Good Neighbor”
Ike Pan American Operation
Alliance for Progress
Carter “Human Rights Agenda”
Reagan Regional Cold War
Bush “War on Drugs” and tradeClinton “NAFTA” & “FTAA”
Objectives
Protect the region from foreign invasions and strengthen the U.S influence in the hemisphere
Exercise strategic control of the region applying hard power (Military interventions in Nicaragua, DR, Haiti, etc)
Build and institutional and permanent diplomatic coordination under the U.S Leadership.
Regional support for World War II and coordination to face the Great Depression
Improve development assistance to prevent social turmoil (Creation of the IDB)
Improve development assistance to prevent the communist expansion.
Promote Human Rights policies to confront the emerging power of dictatorships in the region.
Intervention in Nicaragua, Grenada and Panama.
Fight against Drug Cartels in the region concentrated in Colombia, promotion of NAFTA and Unilateral Trade Preference Act.
Enactment of NAFTA, promotion of the FTAA (1993) and the Andean Trade Preference Drug Enforcement Act.
Policies
Bush Vs Obama and the FTA’s… (Next slide)
U.S-Latin America relations
Two administrations and its strategic approaches…Bush:
1. FTA’s with Chile, Colombia, Peru, Panama, CAFTA, DR.
2. Actively supported the fight against terrorism in Colombia.
3. Promoted the Democratic Charter in the OAS (Signed in Lima September 11 2001)
4. Politicaly confronted anti-democratic regimes in the region.
5. Stablished the Millenium Corporation.
6. Debt Relief for Bolivia, Nicaragua, Honduras, Haity and Guyana.
Obama: 1. FTA’s with Colombia and
Panama took almost 3 years to be ratified.
2. Actively supported the fight against terrorism in Colombia.
3. Political diplomacy with anti-democratic regimes in the region.
4. Timid speech against Drug Cartels in the region.
5. Cautious attitude towards the security crisis in Mexico and the U.S share of responsibility.
Security
28.837 homicides
2882 kidnappings
69 homicides per 100.000 habitants
1645 terrorist attacks
350 mayors out of their municipalities
158 municipalities without police
Economy
Average Economic Growth 1994-2001: 2.1%
GDP per Capita: US$2377
Investment as % of GDP: 16.5%
Exports: US$11.975 million
FDI: US$2.100 million
Inflation: 6.99%
Fiscal balance: -3.2%
Social
Unemployment: 16.2%
Health Coverage: 25 million Colombians.
Pension affiliates: 4.5 million
Poverty: 57%Education Coverage: Primary 97%, High school: 57%, University: 24%.
Mobil Phone Lines: 4.6 million
Internet coverage: 1.9 million
Ten years ago Colombia was a fragile state…The Colombian Paradox: a long and stable democracy in a permanent threat from terrorist groups, drug dealers and
organized crime…
Colombia faced a Confidence Deficit
The elusive quest for peace
Many governments exhausted all their political capital attempting to reach
peace through political dialogue…the result was
military strengthening from illegal armed groups and a
rapid growth in their criminal activities (68% thought the country was going in a negative track)
Terrorist Groups (Guerrillas and
Paramilitaries) had created a sense of
defeat in the Colombian people.
Fear impacted in the Colombian
people Mindset
The lack of investment
The drain of human capital
The sense of danger in Colombian roads.
The expansion of massive kidnappings
created an emotional domino
effect
Building Confidence became our priority
We introduced a comprehensive policy framework…
Social Cohesion
Investment with fraternity
Democratic Security
Confidence
Security as a Democratic Value
Security
for all
Confront all
criminal organiza
tions
Security without martial
law
Security with
freedoms and human
rights protection
Security in
coordination with
the people
Investment Target
Security:HumanLegal
Political
Sound Macroeco
nomics
Incentives
Access to
markets
Competitiveness factors:• Infrastr
ucture• Regulat
ion• Connect
ivity• Logistic
al chain
Social Cohesion
Highest quality in education
Universal
healthcare
Access to
Finance
Stable Jobs and
entrepreneurial spirit
Connectivity
Our policy achievements generated a turning point
Indicator 2002 2010
Homicides 28838 7400
Kidnappings 2882 123
Homicides per 100K Habitants
69 16.3
Terrorist attacks
1645 250
Municipalities without mayors
presence
350 0
Municipalities without
police
158 0
Indicator 2002 2010
Average Economic Growth
2.1% 4.3%
GDP per Capita
2377 5300
Invest % GDP
16.5% 24.6%
Exports US$11.000
US$ 39.000
FDI US$2.100
US$ 7.000
Inflation 6.9% 2.5%
Indicator 2002 2010
Unemployment
16.2% 11.6%
Health Coverage
25.1 million
43.1 million
Pension affiliates
4.5 million 7.1 million
Poverty 57% 38%
Education coverage (Primary, Hs, University)
97%57%24%
100%79.4%35.5%
Mobile phone users
4.6 million lines
41 million lines
• Reached the highest economic growth in more than 20 years.
• The largest education, health and connectivity coverage in its history.
• The largest poverty reduction in Colombian history
• The biggest FDI rates in history• The lowest violence records in 30
years
• Expanded the middle class• Highest exports in
Colombian History.• Paramilitary groups
dismantled• FARC structure severely
dismantled• Per Capita income more
than doubled
Colombia’s current challenges
Security
Maintain Macro-Vision and Micro-
Management
Continue dismantling all
terrorist organizations
Continue dismantling drug cartels apparatus.
Strengthen Citizen Security agendas
with local authorities
Economic
Face new trends of currency
appreciation
Maintain and increase FDI flows (Security, incentives
and stability rules)
Fiscal Policy to face new countercyclical
challenges
Increase tax collections
Expand new trade markets through
FTA’s
Social Cohesion
Fight labor informality and
create quality jobs
Insure education and health quality
Expand vocational
training coverage
Create Entrepreneurial Family Transfers
program
Political
Judicial reform.
Strengthen Democratic Center
Improve local institutional
capacity
New law implementation
(Victims and land)
Prevent the emergence of
populist movements
In search of the knowlege economy
Despite the long list of positive results we still lagg behind in the transition to a real knowlege economy… (Lets look at PISA tests and researchers)
• Among the Latin American countries participating in PISA tests, between 20 and 50 percent of students score below level one (the lowest performance level) in math and between 10 and 30 percent in science, which means that a larger proportion of 15-year-olds lack basic numeracy skills and the rudiments of scientific knowledge.
• According to the data available from 13 countries in the region, there was on average only one researcher per 1000 workers in the labor force in Latin America and the Caribbean. This number is seven times smaller than the OECD average and nine times lower than in the United States. In China the figure is 1.8 and in Spain 5.4. In the region, Argentina leads the ranking with 2.4 researchers per 1000 workers, followed by Chile and Brazil, with 2.0 and 1.3 respectively. Guatemala and Paraguay show the smallest numbers, with less than 0.15 researchers per 1000 workers in the labor force.
• In Latin American and Caribbean countries there are more researchers working in social sciences and humanities (and in other unspecified fields) than in engineering and technology. In fact, except for Mexico and Uruguay, for the rest of the reporting countries, engineering and technology frequently has the smallest share (less than 20 percent). The natural and agricultural sciences continue to be the dominant fields of research: together they typically represent between 30 and 40 percent of researchers.
In search of the knowlege economy
• In contrast, although some progress has been made in recent years, Latin America still invests significantly less in R&D than benchmark economies. According to Red de Indicadores de Ciencia y Tecnología (RICYT) estimates, R&D investment in the region represented 0.67 percent of GDP compared to 0.52 in1997. Between 2000 and 2007, the R&D investment in the region grew at an average annual rate of 7.8 percent, a bit higher than the OECD rate of about 5.9 percent but at a significantly slower pace than in China (22.5 percent).
• In OECD countries, the business sector is the main and the fastest-growing source of R&D financing. Sixty-five percent of R&D expenditures on average are financed by business. In Japan, South Korea, the United States, and China, this share is above 70 percent. In Latin American and the Caribbean, business’ share in R&D financing represents less than 40 percent. Between 1997 and 2007, this figure remained largely the same.
• In technologically advanced countries, the government conducts a limited and declining portion of R&D (11 percent on average in OECD countries). The business sector is responsible for 70 percent of R&D expenditures and the higher education sector for 17 percent. Non-profit organizations account for the rest. In contrast, in LAC countries, one-fifth of R&D is conducted by the government, while firms conduct around 41 percent, almost as much as the higher education sector (38 percent).
• Although the production of science is improving in LAC, it still remains low compared to industrialized nations. Internationally, the region ranks in the middle in terms of publications per capita, despite improvements. On a normalized scale of 0-10 (0 = lowest, 10 = highest), relative to the 182 and 183 countries available for this indicator in 1994- 1998 and 2004-2008, respectively, the region’s score increased from 5.3 to 5.7. However, if we were to normalize with a sample limited to OECD and emerging countries (BRICS), this score would fall to an average of 1.5.
Research and Development
1. In OECD countries, the business sector is the main and the fastest-growing source of R&D financing. Sixty-five percent of R&D expenditures on average are financed by business. In Japan, South Korea, the United States, and China, this share is above 70 percent. In Latin American and the Caribbean, business’ share in R&D financing represents less than 40 percent. Between 1997 and 2007, this figure remained largely the same.
2. In technologically advanced countries, the government conducts a limited and declining portion of R&D (11 percent on average in OECD countries). The business sector is responsible for 70 percent of R&D expenditures and the higher education sector for 17 percent. Non-profit organizations account for the rest. In contrast, in LAC countries, one-fifth of R&D is conducted by the government, while firms conduct around 41 percent, almost as much as the higher education sector (38 percent).
3. Although the production of science is improving in LAC, it still remains low compared to industrialized nations. Internationally, the region ranks in the middle in terms of publications per capita, despite improvements. On a normalized scale of 0-10 (0 = lowest, 10 = highest), relative to the 182 and 183 countries available for this indicator in 1994- 1998 and 2004-2008, respectively, the region’s score increased from 5.3 to 5.7. However, if we were to normalize with a sample limited to OECD and emerging countries (BRICS), this score would fall to an average of 1.5
In search of the knowlege economy
Research and Development
1. •Although the production of science is improving in LAC, it still remains low compared to industrialized nations. Internationally, the region ranks in the middle in terms of publications per capita, despite improvements. On a normalized scale of 0-10 (0 = lowest, 10 = highest), relative to the 182 and 183 countries available for this indicator in 1994- 1998 and 2004-2008, respectively, the region’s score increased from 5.3 to 5.7. However, if we were to normalize with a sample limited to OECD and emerging countries (BRICS), this score would fall to an average of 1.5.
2. As in the case of R&D investment, the production of patents is concentrated in very few countries. During the period 2005- 08, three countries were responsible for 75 percent of the patents granted by USPTO to Latin American inventors (1042 in total). Thirty-seven percent of patents granted to the region were for inventions made in Brazil, 25 percent in Mexico, and 13 percent in Argentina.
3. In absolute numbers, between 1995 and 2008, the most striking expansions in the absolute number of trademarks are reported for Chile (it increased 6 times) and Panama (5.5 times); followed by Brazil, Colombia and Mexico (around 3 times). However, in the international ranking, all of them drop in the normalized score. This is due essentially to the increase in the number of emerging countries applying for trademark protection
In search of the knowlege economy
Science and patents
1. In terms of access to computers the gap between Latin America and the OECD is widening. The number of personal computers per 100 inhabitants has expanded in the region from 5.5 in 1995 to 11.3 in 2006, while in OECD countries this ratio grew from 24.8 to 54.4. Therefore, the gap in penetration rates is persistently rising (from 19.3 to 43.1 computers per 100 inhabitants).
2. The digital gap in internet and broadband subscriptions is widening substantially. The number of internet subscribers in the LAC region has increased from 0.8 to 6.9 per 100 inhabitants between 1998 and 2008. OECD penetration rates have also grown from 4.7 to 27.3. As a result, the gap between the two regions reached a record level of 20.4 subscribers in 2008.
In search of the knowlege economy
Technology Gap
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