Foreign Direct Investment in Latin America in the 1990s

Summary

FDI in Latin America has witnessed a resurgence in the 1990s after the debt crisis and capital drought of the 1980s. This inflow results both from more market-friendly policies in the recipient countries and lower returns and growth in developed nations. The latter factor has also attracted many short-term, portfolio instruments to the continent which can be highly damaging to local economies when not properly regulated. Privatization has been among the more important country-specific variables attracting direct investors to the region. Despite the positive effects of FDI, Latin American countries are still beset with problems such as unequal distribution of income and poverty that direct investment is unlikely to ameliorate.     

The development finance challenges facing Latin America in the 1990s

Growth in Latin America in the 1980s was much slower than it had been in previous decades and real resource transfer has been negative since 1983. What are the chances that this situation will change in the nineties? Where can the necessary development finance come from? Can bottlenecks be avoided?     

Financial Liberalisations in Latin America in the 1990s: A Reassessment

This paper studies the experience of Latin America (LATAM) with financial liberalisation in the 1990s. The rush towards financial liberalisations in the early 1990s was associated with expectations that external financing would alleviate the scarcity of saving in LATAM, thereby increasing investment and growth. Yet, the data and several case studies suggest that the gains from external financing are overrated. The bottleneck inhibiting economic growth is less the scarcity of saving, and more the scarcity of good governance. A possible interpretation for these findings is that in countries where private savings and investments were taxed in an arbitrary and unpredictable way, the credibility of a new regime could not be assumed or imposed. Instead, credibility must be acquired as an outcome of a learning process. Consequently, increasing the saving and investment rates tends to be a time‐consuming process. This also suggests that greater political instability and polarisation would induce consumers to be more cautious in increasing their saving and investment rates following a reform. Hence, reaching a sustained take‐off in Latin America is a harder task to accomplish than in Asia.     

Latin America’s Competitive edge in Europe

The Hamburg Institute for Economic Research, the Institut für Iberoamerikakunde, Hamburg, and the Institute for European-Latin American Relations, Madrid, on the occasion of the 1993 Annual Assembly of the IDB/IIC Board of Governors in Hamburg, organized a seminar on “Latin America’s Competitive Position on the Enlarged European Market”. It was held under the auspices of the European Communities, Brussels, and the Inter-American Development Bank, Washington, D.C. The following article summarizes the discussion.     

Germany’s trade with Latin America

This study analyses the development of the Federal Republic’s foreign trade relations with 20 Latin American states within the 15 years from 1963 to 1977. It examines primarily the exchange of goods between the Federal Republic and the seven most important Latin American countries which on an average of the last 15 years accounted for more than 75% of the German foreign trade with the Central and South American states.     

Integration and consumer protection: The case of Latin America

The author analyses Latin American attempts at creating a Common Market in which the free circulation of goods and services is guaranteed. He is concerned with the impact upon the emerging issues of consumer protection. The most promising project of economic integration has been initiated by the 1991 Asunción Treaty in which Argentina, Brazil, Paraguay, and Uruguay participate and which has the aim of creating a Southern Common Market (MERCOSUR). The author describes the institutional mechanisms set up in order to establish MERCOSUR by the end of 1994.The safeguard clauses allowing for restrictions on trade in the interest of consumer protection follow the model of the European Communities but are not controlled by an independent Court of Justice. Therefore, harmonisation of legislation is imperative but difficult. If such harmonisation is not feasible, goods may become banned in some Member States while circulating freely in others, and marketing practices may at the same time be forbidden in some and allowed in other Member States. This could eventually endanger both integration and consumer protection.

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Integration und Verbraucherschutz — das Beispiel Lateinamerika

Zusammenfassung Der Autor untersucht lateinamerikanische Bemühungen, einen Gemeinsamen Markt zu schaffen, wo der freie Verkehr von Waren und Dienstleistungen sichergestellt ist. Er beschÄftigt sich mit den Auswirkungen eines solchen Projektes auf den Verbraucherschutz. Die am weitesten gediehenen Initiativen sind 1991 durch den Abschlu\ des Asunción Vertrags bewerkstelligt worden, an dem Argentinien, Brasilien, Paraguay und Uruguay mitwirken, um einen Gemeinsamen Markt des Südens (Mercosur) zu errichten. Der Autor beschreibt die institutionellen Mechanismen, um Mercosur bis Ende 1994 zu vollenden.Schutzklausein erlauben eine EinschrÄnkung des Freihandels im Interesse des Verbraucherschutzes; sie folgen dem Modell der EuropÄischen Gemeinschaften, ohne jedoch von einem unabhÄngigen Gerichtshof kontrolliert zu werden. Deshalb ist die Angleichung der Gesetzgebung unerlÄ\lich aber schwierig. Wenn dies nicht möglich ist, könnten Waren in einem Staate verboten werden, aber in einem anderen frei zirkulieren, wÄhrend Handelspraktiken gleichzeitig verboten und erlaubt sind. Eine solche Folge würde Integration und Verbraucherschutz gleichzeitig gefÄhrden.

     

Regional development of German foreign trade in the 1990s

With a double-digit growth rate, Germany's export sector was again very successful last year. While the industrialised countries continue to be Germany's main trading partners, growth in the past few years has been stimulated by trade with the booming regions of Southeast Asia and Central and Eastern Europe as well as with Central and South America. The current crisis in Southeast Asia has led to an abrupt slowdown in the region's economic development. What will be the consequences for global trade in general and for German foreign trade in particular?     

Foreign Direct Investment and European Integration in the 1990s

This paper examines the effects of EU integration in the 1990s on the FDI relations in Europe. We find that the completion of the Single Market, the 1995 enlargement and the so-called Eastern enlargement are characterised by a substantial, positive anticipation effect in the period between the announcement and the formal establishment of each integration step. Neither the Single Market Programme nor the previous enlargement exhibited any further positive effects on intra-EU FDI volumes after their establishment.     

Negotiating in Latin America

Abstract

The emerging role of Latin America in the global marketplace suggests that understanding and managing cross-cultural negotiations will become increasingly important between Latin America and the rest of the world, including and especially the United States and Canada. While North America and Latin America were colonized at about the same time, different historical development, economic conditions, and cultures influence their approaches to negotiation. This paper examines what we know about negotiating in Latin America, based on anecdotal and empirical evidence, and what aspects of negotiation behavior require further study and elucidation.

Resumen

La nueva y creciente posición de América Latina en los mercados globales hará que el entendimiento y la administración de los procesos de negotiatíon inter-culturales entre América Latina y el resto del mundo, con especial énfasis en Estados Unidos y Canadá, adquiera mucha mayor importancia. Norte y Latino América fueron colonizadas en épocas aproximadamente similares, sin embargo, los procesos requeridos para negociar con cada uno de ellos han sido influenciados por diferentes desarrollos históricos, condiciones económicas y aspectos culturales. Este artículo examina a través de evidencia anecdótica y empírica los aspectos de negociaión en América Latina ya conocidos y aquellos que requieren investigación adicional.

Resumo

O papel emergente da América Latina no mercado global sugere que o entendimento e a gerêntia de negociações inter-culturais se tornará cada vez mais importante entre a América Latina e o resto do mundo, destacando-se os Estados Unidos e o Canadá. Apesar de a América do Norte e a América Latino terem sido colonizados em torno da mesma época, diferentes desenvolvimentos históricos, condições econômicas e culturas influenciaram a sua forma de negociar. Esse artigo examina o que nós sabemos a respeito de negocição na América Latina, baseado em evidências casuals ou empíricas, e que aspectos do comportamento de negociação requerem estudos mais aprofundados ou maior elucidação.     

Business Ethics in Latin America

Business ethics is a relatively new topic of academic discussion in Latin America. Corruption and impunity came to be serious moral diseases in the region, probably as a result of a long period of dictatorship in most countries. Low ethical standards in the politics have had deep impact on individuals, organizations and economic systems. Excessive consumption, materialism and selfishness, in contrast with real poverty, have been responsible for a sloppiness in attitudes and principles in many Latin American countries. Even though the majority of the population belongs to the Roman Catholic Church, the lack of education has led people to a dichotomy: faith and business practices are often very distant from each other. Several isolated efforts have been done in order to enhance business ethics through education, publications and professional activities. The relationship business-academia has proved to be an excellent initiative for this objective, mainly in Mexico, Brazil and Peru.     

Strategic management in Latin America

This paper presents conclusions about the kind of strategic management research being done in and about Latin America. The conclusions are based on a selection of papers presented during the conference. The fifteen works that this volume includes were selected from 63 conference presentations through a rigorous double blind review process. The 63 conference presentations were selected from among more that 100 initial proposals.     

Towards the Latin American Regiocentric Corporation

Abstract

Globalization and regionalism are emerging with force in Latin America and a new breed of Latin American corporations is making its mark in response to this new reality. These corporations are exploiting technology, low costs, and their in-depth understanding of the region's intricate cultural fabric to compete with global firms and become regional players in niches neglected by these powerful rivals. Using the integration-responsiveness framework, this paper describes the evolution and characteristics of regional strategies in selected Latin American companies and speculates on the potential reversal of these strategies as Latin American economies attempt to insulate themselves from the recent international financial crisis.     

Made in America? us steelmaking in the 1990s: An American resurgence?

This article examines the improved competitiveness of the U.S. carbon steel industry, a sector that has suffered extreme economic difficulty over the last three decades. The article argues that despite the lack of a coherent national steel policy, the US steel industry has significantly increased its competitiveness relative to foreign steel competitors. Four reasons stand out. First and foremost, domestic minimills have provided intense competition for the domestic integrated sector. Secondly, the falling value of the dollar has improved the international position of all US steel firms. Thirdly, US labor costs have been reduced sharply, both through wage concessions by the United Steelworkers and massive layoffs. Finally, joint ventures with Japanese firms have provided traditional firms with cash and new technical innovations.