Latin America's lessons for Asia - and vice-versa

East Asia and Latin America have much to learn from each other but it will need curious minds on both sides.

When we in East Asia think of Latin America it’s likely to be because of a festival celebrating the food, music or culture of this vibrant region. In moments like these, the 12,000km distance between the two regions seems to be wiped out.

But what happens one week later? It seems our stereotypes about Latin American countries are confirmed; we are entertained, but our curiosity is not tickled.

Yet, had we used these events to look into the way people live in Latin America and experienced their development process, it would lead us to significant discoveries. They would focus our attention on starting to build the world’s future greatest economic growth pole – which is exactly what East Asian-Latin American  economic relations could become, if properly nursed and strategically designed.

Latin American ambassadors, businessmen, politicians, and other leaders present in East Asian capitals can do miracles to explain their countries to us. However, unless we understand the ultimate meaning for us of developing these relations, they would never come into being and the world’s greatest future economic growth pole will never materialise.

Yet the minority of people living in East Asian countries who have been able to use the power of their curiosity have seen what this economic relationship could be – if we were interested in learning from the other’s experience.

Indeed, the need to develop a quality relationship has been felt at official levels. Thus, a top-down approach has been developed for pushing for greater cooperation through dialogue between Asean and the Mercosur trade bloc, for example, to take advantage of its involvement in the Forum of East Asian-Latin American Cooperation, in the Singapore Latin American Forum and others.

What is missing is a bottom-up approach to effectively link East Asian and Latin American countries with solid economic relationships.

It is a people approach that can nurture mutual understanding and appreciation of other experiences, as a matter of fact and without judgment. The direct involvement of business communities living in East Asia in cross-regional initiatives would help identify opportunities for creating supply chains for specific sectors, such as electronics and furniture.

Initiatives of this type are essential because Asian counties, have something to learn from the Latin American development experience and vice versa.

Take agribusiness. In Latin America, innovation has become essential to strengthen productivity, competitiveness and sustainability in the agricultural sector and contributes to the development of the rural sector. Thus businesses in the sector have become world leaders from which East Asian countries could learn.

Asian alternative: Bali

Similarly, each Latin American country has biofuel sectors in different stages of development; the main drivers are the production of cleaner fuel, and diversifying and increasing values of farm production and exports.

Conversely Latin American countries can learn from East Asia’s development experience. For example, state and private sector (banks, financial institutions, incubators, angel investors, and venture capital funds) are partnering to supply highly effective support to small businesses, while the state’s assistance is boosted by capable bureaucracy which uses policies to design incentives to crowd input at sector participation. The private sector (better trained, motivated, and more business-minded ) is better equipped to deal with the small- and medium-sized enterprise than the state.

For East Asian countries it is possible to foresee the future for Latin American cities. Indeed, while Latin American and East Asian cities have much in common, they both have to face two alternatives: 1) bet on an economic model that aims to “grow” first and “clean” later; 2) ensure a sustainable trend from the outset with urban development that balances economic growth, social equity and natural resources protection.

Moreover, Latin American countries can learn from East Asian experiences on infrastructure. Indeed, Latin American infrastructure is notoriously inadequate and its quality leaves a lot to be desired. Yet, to reap the rewards of said infrastructure, as in the case of Malaysia, Latin American countries must increase both investment and savings over the long-term by creating institutional capacity, strengthening the rule of law, and building stable macroeconomic policy frameworks.

Similarly, palm trees are another sector for mutual learning. Most of the palm trees are grown on a few islands in Malaysia and in Indonesia with the most biodiverse tropical forest found on earth, and where there is a direct relationship between growth of palm oil estates and deforestation which is also plaguing Latin American countries.

These are only examples of the experiences that can be exchanged for mutual benefits. What is essential is that  by learning the lessons, both sides will keep moving on their development paths. In so doing they will take advantage of the changes associated with economic and financial globalisation in order to develop their respective economic “miracles”.

¬ Haymarket Media Limited. All rights reserved.
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