Brussels, 29/06/2007 (Agence Europe) - A French engineering company landing a $560 million biofuels contract in Honduras, a Peruvian association of small-scale raw marble producers cooperating with the prestigious Italian Carrara marble: these are but two of the 5,000 examples of economic cooperation projects between European and Latin American companies set up through the Community AL-invest programme. Since 1994, the programme has been helping small and medium-sized companies (SMEs) in the two regions become international, through “matchmaking” operations, helping SMEs take part in trade fairs and training. Meeting this year in Ljubljana, the operators of the AL-invest network - local chambers, regional development agencies, professional associations and consultancies - took stock of action undertaken and considered the development of the programme, due to enter its fourth phase covering the period 2007-2013.
“When political decision makers speak about EU-Latin America relations, they don't have concrete examples. We can give them examples, experiences, success stories,” said Arnaldo Abruzzini, Secretary General of the European Association of Chambers of Commerce and Industry (Eurochambres). With other partners such as Bancomext and employers' federations, Eurochambres is a member of the consortium which is responsible for the daily management of AL-invest. At a time when political forces are calling for an end to economic cooperation programmes between the EU and other regions of the world, Mr Abruzzini added, AL-invest shows decision-makers that “European money has been used well”.
Samuel Simón Pulido, who is responsible for managing AL-INVEST within the Commission, believes this Community programme arouses “great interest” among large, medium and small companies for the development of trade links between the EU and Latin America. Juan Meijía, General Secretary of the Latin American industrial association, AILA, believes that AL-INVEST is an “institutional link between the EU and Latin America quite separate from the political link” and that it finally costs “very little compared to the influence that it enjoys”. For the period 2003-2007, the amount earmarked for AL-INVEST is €60 million.
Fourth phase. “The future of AL-INVEST is ensured until 2014”, said Dirk Vantyghem, Director for International Relations at Eurochambres. He pointed out that the Commission has taken a decision of principle aimed at financing a fourth phase of the AL-INEST programme. Between 2007 and 2013, the allocation for this programme would, in his view, be €50 million for the first three years and €40 million until 2013. The Commission will launch two studies to analyse the impact that the programme will have and to organise reflection, in November, on the future of AL-INVEST, with a view to making the fourth phase of the programme operational by mid-2008.
Aiming at quality. At a time when the outlines of the fourth AL-INVEST phase are still to be defined, the meeting of the programme operators showed consensus on the need to grant greater priority to project quality. The idea, as Fernando Ramos of Eurochambres explained, would be to no longer support only a “sector specific event” but above all “longer term projects” although this is not yet possible. The European Commission took the same view. The aim of the future programme could be to “stress the quality of services rather than the quantity”, noted Samuel Simón Pulido, speaking of the declaration by the EU/Latin America summit in Vienna which underlines the importance of enhancing social cohesion and regional integration (see EUROPE 9192). He pointed out that participation in trade fairs is currently what takes up most of AL-INVEST's budget, and said it is necessary to integrate the services proposed better.
Juan Mejía, who also spoke of avenues for reflection on the future of the programme, imagined a mechanism whereby cooperation could be “converted into a chain”, which goes from the preparation of a specific event on to participation at that event and then on to ensuring the follow-up to action taken. He also recommended that a better balance be struck when breaking down funds, with above all the participation of the smaller countries of the Andean Community and of Central America, as well as seeking new members such as the Inter-American Development Bank (IDB). One can imagine synergy with international organisations so that Latin American companies have “credit lines” allowing them to borrow at less cost, Mr Ramos said. In Mexico, the rates of interest are around 17% to 18%, a level that makes borrowing prohibitive for many SMEs. Eduardo García Villaseñor, General Secretary of the Ibero-American association of chambers of commerce (AICO), believes that greater attention should be paid to tourism as this would be beneficial in so far as the tourist sector generates considerable employment requiring little or no qualifications.
The AL-INVEST programme must not just be a “money pump”, said Roberto Alzetta, General Secretary of the Venice Chamber of Commerce, convinced of the need to give the network sustainable value by including fair trade in AL-INVEST IV, among other things. In his view, participation of profit-making private entities in the AL-INVEST network can pose a problem in that they would tend to give preference to the quantity of projects rather than to their quality. Nonetheless, his proposal does not seem to meet with very much enthusiasm among European and Latin American operators with whom he has discussed the matter informally.
Lima 2008. Eurochambres has conducted a survey among 800 European companies on the nature of their trade relations with Latin America. The results of the survey will be presented in September and will serve as a base for a strategic document for the organisation, which wishes to focus on the expectations of the economic world at the EU/Latin America summit in Lima next May. Mr Abruzzini spoke of several difficulties encountered by European companies. These include: - problem number one, corruption, which needs to be looked at in earnest; - transport and logistics, as it costs more to send a container to Asia than it does to Latin America; - tariff and non-tariff barriers, the latter being “even more dangerous” than the former as they are “not transparent”; - and infrastructures, not only physical (such as roads) but also intangible (such as education and training).
As the Lima Summit will take place in the context of the Slovenian presidency of the EU, Dimitrij Rupel, Slovenian Minister for European Affairs, assured AL-INVEST stakeholders that his country hopes to strengthen relations between the two regions. He went on to add that many Slovene companies are interested in entering the markets of Latin American in areas as varied as banking, financial services, textiles, manufacturing, pharmaceuticals, construction and machine tools. His Peruvian counterpart, Antonio García Belaúnde, pointed out that the “aim fixed by the EU/Latin America Economic Forum in Vienna is to double investment and trade flows by 2012”. (mb)