WorldCity Business Magazine

WorldCity Q&A with Chris Sabatini

by Mary Dempsey

Four decades ago, David Rockefeller established an entity where like-minded business people could work to promote economic development throughout the Americas. Today the Council of the Americas has 170 corporate members 20 percent of them outside the United States. The council has stepped up its presence in Miami, doubling the number of conferences, private meetings and other events it sponsors each month. It currently is running a conference series focused on upcoming elections in South America. In October 2005, Chris Sabatini joined the council as its senior director, leaving his position as senior program officer for Latin America and the Caribbean at the National Endowment for Democracy. Sabatini spoke with WorldCity about what’s ahead for the council and the role that South Florida will play.

What brings corporations to the council?

We offer access networking with peers, with advocacy entities, with policymakers through our events, conferences and private off-the-record meetings.

And the cost of that access?

There are different tiers, but the basic fee is $10,000. We offer different meetings or events based on the different tiers of membership. For example, there may be a meeting with [Brazilian President Luiz] Lula da Silva and CEOs or representatives from multinationals. Or there could be a public conference. When a company joins, everyone in the company is a member.

*You’ve increased your exposure in South Florida. You used to have some sort of event about once a month and you’ve stepped that up. Why is that? *

We want to broaden our private sector base. And we want to provide more opportunities to our members in Miami.

What are some of your other goals in Latin America?

Second generation economic reform. The Washington Consensus did a significant amount to create growth. Hyperinflation ended. Trade barriers were lowered.

The second generation of reforms will be more competitive, more institutional in nature.

**Let’s talk about some of those reforms.

There are a number of them. For example, rule of law is very important. The court system is egregiously slow in Latin America. Increasingly, people are demanding rule of law. There is an understanding that for a small owners of a bodega those are the same problems. That link is beginning to fray.

The council has four working groups to bring in members and develop working group reports. One focuses on judicial reform and mechanism on how to get it done.

*You’ve said job creation in Latin America is a priority of the council. *

These are extremely inflexible labor environments, according to the World Bank. They’ve choked off employment and they’re a disincentive to investment. As a result, companies are increasing hiring workers informally many of them women and these workers enjoy no protections at all.

What is the solution?

There is an ever-growing informal economy in Latin America. The question is how to create labor conditions that provide access to security and protections. Sometimes it’s unions that are blocking this. The region needs labor-law reform. Investors are waiting for labor regulations to be rolled back and unions are fighting back. It is a question of finding a path that is win-win.

What areas of reform are most critical?

Rule of law. Improving public education the ability of any country to capture investment, to attract more technically oriented business requires that education is modernized. Personal security. Security is a growing concern for employers and employees. This has a negative effect on investment. Also, the region needs police reform the professionalism of the police and increasing budgets for police departments.

And economic reform?

The region needs greater transparency in budgeting. In most cases, people don’t have access. Congresses are often too weak, too technically ill-prepared. There is a lack of access to information. And there is a lack of interest among the public and this has implications for reform.

What about taxes?

Tax collection is important. Tax collection is a fundamental function but the levels of tax collection are low throughout the region.

Are Latin Americans ready to embrace these reforms?

People recognize increasingly that it is a global economy. Latin Barometer polls show the majority still support ties to the global economy.

What about energy? We seem to be headed to a point where those Latin American countries that supply it will benefit immensely while those that need it will find themselves at an even greater disadvantage than ever before.

The Council of the Americas did working papers on energy and defense and security.

Your laundry list is the same one that experts have been reciting for years. It makes one wonder if there will ever be forward motion.

These problems are much knottier than previously thought. The slow progress doesn’t mean they’ve failed. It’s a long-term process. The problem is that, increasingly in Latin America, public attention on these reform issues is beginning to dwindle.

Is there a country that we should be looking at as a model?

There’s not one single model. Chile has done well in many ways. Brazil has a good public pension sector system. The U.S. model is not necessarily the answer. It is different from that of many countries.

What about the warnings about left-wing governments poised to sweep the region? Something to be worried about?

I don’t think it’s a question of an ideological shift. It will probably be about the same. It’s a very health democratic process in the way.

Why the shift leftward?

Because of the general levels of polarization. We’re seeing more participation by indigenous people in Peru, by Afro-Colombians in Colombia. It’s a very, very positive trend. It’s necessary to recognize the importance of including these groups. Without this inclusion, you could erode the integrity of democratic institutions.

What’s the council’s relationship to trade policy?

We work on it. We work on it in Washington. And in Miami. And we’re going to focus a lot more on trade.

Were you disappointed by what happened at the Summit of the Americas last year?

I think there’s been a misperception of Mar del Plata results.

*Is FTAA dead? *

I think there is still a hope.

The council has stepped up its activities in Miami. Is a Miami office to complement your offices in New York and Washington, D.C. in the works?

In 2006, the council will continue to expand and consolidate its presence in Miami, offering members frequent programs on current policy issues in the region. We’re developing a number of initiatives in this area that will allow us to increase our focus on Miami-based members.