(Bloomberg) — Can Latin America seize the opportunities in front of it stemming from supply chain disruptions, cheap labor and a growing technology industry in order to revert a decade of tepid growth?
That’s one of the key issues being discussed at Bloomberg’s inaugural New Economy Gateway Latin America event being held in Panama City. After a day that saw hesitation on the speed of adaptation for cryptocurrencies, warnings of growing populism and the potential to leverage relationships with both the US and China, speakers Thursday will address health, food scarcity, clean energy, cities and biodiversity.
You can follow the agenda here and the event will be streamed on the terminal at LIVE GO and on the web.
Tether founder Pierce sees “large” LatAm crypto adoption (4:35 p.m.)
Latin America is getting “large numbers” of investors entering the crypto space, said Brock Pierce, chairman of The Bitcoin Foundation and founder of Tether. “We are absolutely seeing large numbers of people in LatAm using this technology for things like remittances. The fundamentals are there.”
Still, algorithmic stable-coins are an ongoing experiment that still needs to be battle-tested to weather economic storms, he added, noting that he “still believes” in them even amid recent volatility.
“For the time being there’s a direct correlation between the old economy and the new economy,” he said. “That’s likely to continue to be the pattern.”
Though the US dollar is the reserve currency for all crypto transactions, investors shouldn’t put “too much confidence” in very new coins. Pierce also said there’s long term value in NFTs, though wouldn’t invest “heavily” in the space.
Private sector must take lead on biodiversity (4:05 p.m.)
When it comes to preserving biodiversity, the private sector has to take the lead, said Joshua Tewksbury, the director of the Smithsonian Tropical Research Institute. They’ll have to take on the challenge of understanding the investment opportunity, and increasing the conversation on where to invest in environmental, social and governance, he said.
“I think the private sector has the capacity to move faster,” Tewksbury said.
Danielle Wood, an assistant professor and director of the Space Enabled Research Group at the MIT Media Lab, said she’s optimistic because she sees enthusiasm from the private sector to be a positive player on biodiversity, both due to client pressure and from companies’ own internal desires.
Measuring the value of biodiversity can be challenging, more so even than the impact of climate change or carbon emissions. But when looking at the cost of maintaining biodiversity over replacing it, it’s going to be very expensive proposition to recover whatever is lost, Wood said.
As for balancing economic growth with environmental sustainability, the impact the planet has on growth is exceptional and often underestimated within local economies, Tewksbury said. If the impact on an ecosystem like the Amazon rainforest moves beyond an irreversible tipping point, it could result in a global impact that’s an existential threat, he added.
Copa says top leisure destinations beat pre-pandemic levels (3:45 p.m.)
Latin America is leading the recovery in passenger capacity, with demand beating 2019 levels and some top leisure destinations like Cancun and Punta Cana doing better than before the pandemic, said Pedro Heilbron, chief executive officer of Copa Holdings, said in an interview with Bloomberg TV’s Caroline Hyde. The comeback of leisure travel is the “big surprise” on the heels of the pandemic, with corporate travel still about half of what it was before the virus hit in 2020.
The company is grappling with jet fuel prices at record levels, but still isn’t seeing a slowdown in demand because of high prices.
“That’s the new challenge for the airline industry, but it’s also one we cannot do much about, except for trying to improve revenues and keep costs under control,” Heilbron said.
Local food sources can fight inflation (3:35 p.m.)
Chef Elena Reygadas, one of Latin America’s top restaurateurs, said she focuses on sourcing local and diverse ingredients both to preserve less known edible fruits and plants but also, in the current environment, to combat rising food inflation.
“If we conceive our menus and dishes with as much ingredients as possible we can keep our biodiversity alive,” Reygadas said. “And the more local we are, the more we can fight against the inflation that’s going on.”
Reygadas is the owner of the Rosetta and Lardo restaurants in Mexico City, among other eateries.
Public-private partnerships key to the electric mobility ramp-up (3:15 p.m.)
Uber is working on partnerships, like an alliance with Enel in Chile, to improve infrastructure to make it easier to deploy electric vehicles and reduce emissions, said George Gordon, its head for Latin America. Uber is working with the goal of having all trips globally be zero emission by 2040, he added.
Enel X’s head of South America, Simone Tripepi, added that the company is working with Uber to replicate its Chile partnership in other countries.
Emissions out of Latin America are growing faster than elsewhere in the world, making it a key issue regionally, said Adriana Lobo de Almeida, executive director of the World Resources Institute in Mexico. Improving public transit is a necessary step, with 200 million out of the 570 million living in Latin America relying on it regularly.
Formula E sees growing interest in zero-emission racing (2:50 p.m.)
Formula E racing, currently the fastest growing motor sport and the only motor sport to produce net zero emissions, is using the reach of sports to spread the “key message of sustainability and electromobility”, said Alvaro Buenaventura Acosta, Latin America director for Formula E. More than 100 cities want Formula E racing as part of a rise in consciousness on climate change.
Roche’s double-digit growth (2:10 p.m.)
Roche Pharmaceuticals expects to grow more than 10% in Latin America this year, driven by innovative drugs to treat cancer, hemophilia, multiple sclerosis, and rare diseases as well as in the ophthalmology space.
“Latam has been for years now a growth market,” Rolf Hoenger, the firm’s area head of Latin America, said in an interview.
The company is following regulation changes in the region around telehealth and drug approvals, and engaging with governments toward more accessible and sustainable health systems, he said.
Roche is also awaiting results on a trial, set in Colombia, around an Alzheimer drug this year. Latin America “is an important site for clinical trials, and we have interesting ones happening here,” he added.
Cities make a comeback (1 p.m.)
After a pandemic-induced exodus, people are flocking back to cities.
“People thought cities were over before that, but physical encounters are important,” said Carlo Ratti a director at MIT SENSEable City Lab.
But the changes brought on by Covid-19 such as hybrid work, and the growing concern with sustainability, will force governments and companies to adapt.
“The pandemic has changed the way we’re traveling and working so we need to redesign cities,” said Edelio Bermejo, the head of Global R&D and IP at Holcim Innovation Center. “Everyone in the value chain needs to discuss how to make buildings and construction more sustainable.”
Mauricio Ramos, the Chief Executive Officer at Millicom, said he’s working with governments to provide Wi-Fi outside and build smart cities. Costumers, he said, are willing to pay more for a sustainable product or service.
The resurgence of cities also has governments going back to some basics: Marina Bragante, the deputy secretary for Economic Development, Science, Technology and Labor for the state of Sao Paulo, talked about efforts to clean up polluted areas to rebuild public spaces.
Lasso says high oil prices helping Ecuador close fiscal gap (11:45 a.m.)
Ecuadorian President Guillermo Lasso spoke in a virtual interview from Quito.
The war in Ukraine is keeping oil prices elevated which will benefit Ecuador’s public sector with the potential for the fiscal deficit to close below a previously estimated level of 2% of GDP this year, Lasso said. At the same time, non-oil exports are also rising from pre-pandemic levels with bananas, shrimp and flowers finding new markets.
While some emering market countries are struggling with high inflation and debt burdens, Ecuador — which has a long history of defaults — is not at risk of a financial crisis, Lasso said. While the cost of imports of things like urea are surging, the country’s dollarized economy is not seeing a broad inflation spike.
After a first year in office that focused on stabilizing the economic and health crises in the country, the second year will be dedicated to promoting more public and private investments. Some $1.8 billion will be spent by the government in infrastructure while Lasso is personally talking to potential investors in mining to create jobs.
Copper is the new oil, key to building new economy (11:20 a.m.)
Metal producers have to reinvent their relationship with communities in order to gain social licenses to grow output and feed the clean-energy transition, according to billionaire mining entrepreneur Robert Friedland.
Speaking on a panel, Friedland said mining is crucial for building a new economy, given “copper is the new oil.” But the industry has to be better at engaging communities and reducing environmental footprints to gain acceptance. That means adopting a more holistic approach to communities by rolling out projects in everything from farming to education, he said.
Referring to ongoing community protests that have stalled output at MMG Ltd.’s Las Bambas copper mine in Peru, he said: “Miners need to reexamine the enterprise from day one to try to prevent that kind of problem from occurring.” With regards to ESG, he said: “Companies that get it right will inherit the industry. Companies that don’t, will die.”
The founder and executive co-chairman of Ivanhoe Mines Ltd. also urged governments to be “very, very careful” not to make operating environments too onerous and scare away investments to friendly jurisdictions. A lithium cartel is a “terrible idea,” he said.
Fernanda Avila, mining secretary of Argentina, said the South American country’s later embracing of mining has a silver lining. “Argentina can introduce the ESG framework from the beginning of the life of the projects.”
Food crisis requires more public-private cooperation, capital (10:35 a.m.)
Members of a food panel called for more action from governments and the private sector to accompany all the talk about how to mitigate a looming global good crisis.
There’s been a lot of talk about the need for public and private entities to work together more, but not enough action in terms of coordinating production and distribution of food, according to Ertharin Cousin, head of Food Systems for the Future. “There’s not enough financial action from either side,” she said, calling for more flows of “blended” capital.
A key tool to resolving the situation without compromising sustainability objections is technology such as digital farming, which can help ensure stable yields and optimize crops, said Mauricio Rodrigues, President for the Crop Science Division in Latin America, Bayer AG. It’s the role of government to make sure that technology spreads, said Marcela Escobari, assistant administrator at USAID’s Bureau for Latin America and the Caribbean.
The supply chains put together by the private sector for the global grain trade were built on globalization, said Bioceres Crop Solutions Corp. Chief Financial Officer Enrique Lopez. It would be hard to build something else now, he said.
Next pandemic has to be different (10 a.m.)
Covid-19 hit Latin America hard, and the region has to change its approach to deal with a next health crisis, according to Panama’s Minister of Foreign Affairs Erika Mouynes. The country is actively preparing and advocating to act as a bloc to buy vaccines, much like the EU is doing, she said.
“It has to be different the next time around — it doesn’t matter if you are able to vaccinate your country if your neighbors are still struggling,” she said. “The way vaccines were distributed the first time around clearly did not work.”
Rolf Hoenger, the area head of Roche Pharmaceuticals Latin America, said it’s key to know not only to invest more, but better.
Daniel Nathrath, the founder and chief executive officer of health fintech Ada Health, added that people need to look not just at virus cases — Covid accounted for about 25% of all assessments done by Ada — but also at the indirect effects of a health crisis. Data showed depression in kids and teenagers more than doubled in Germany amid prolonged school closures.
“I would advise governments to take a holistic view,” he said.
US awaits democratic opening in Venezuela for relief (9:35 a.m.)
Juan Gonzalez, Special Assistant to US President Joe Biden and Senior Director for Western Hemisphere Affairs at the National Security Council, spoke in a virtual interview about policy toward Latin America.
The US needs to see negotiated solutions between the Venezuelan government and opposition that leads to free and fair elections before reviewing the possibility of lifting economic sanctions, Gonzalez said. The issue of easing sanctions is not about boosting supply in the global oil market, he said.
Biden’s policy toward Cuba is about being “hard on the regime and soft on the people,” Gonzalez said. Biden wants to see a “secure, middle class and democratic” Western Hemisphere.
It’s too early to say whether the leaders from Mexico and Brazil will attend the Summit of the Americas in Los Angeles, Gonzalez said, as some countries demand the inclusion of Cuba, Venezuela and Nicaragua at the event.
Cortizo on crypto law, China trade and growth (7:40 p.m.)
In an interview with Bloomberg’s Stephanie Flanders, Panamanian President Laurentino Cortizo said his country is boosting cooperation with the private sector to lure investments and has the pandemic under control which is driving the fastest economic growth in the region.
While both China and the US are key trade partners, the US is most strategic relationship, Cortizo said. After a pause, trade talks with China will resume soon and Panama will push for more of its agricultural products to be included.
A new crypto law approved in Congress will be reviewed by lawyers and they’ll make a recommendation on whether to approve, partially sanction or reject the legislation, Cortizo said. In its current form, it wouldn’t be signed, he said, and any new rules will have to guarantee that the country’s fight against money laundering isn’t weakened.
“It is an innovative law from what I have heard, it’s a good law,” he said. “However, we do have a solid financial system here in Panama and one of the things I’m waiting on is when you have a global regulation of crypto-assets.”
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