LEADERSHIP - Center for High Impact Philanthropy · 2020. 2. 13. · THE NEW ROAR PERU SPECIAL The...
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MULTILATINAS
A HISTORY OF SUCCESS
Peru grows steadily at Asian-like rates. How did this economy became a regional star? Its business story.
The companies that perform best are innovative, efficient and aggressive buyers.
How eight of the most prominent people in
the continent lead their companies, and their countries.
LEADERSHIPBUSINESSAWARDS
2016
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YOUR BUSINESS SOURCE FOR LATIN AMERICA WWW.LATINTRADE.COM SECOND HALF, 2016
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SEGUNDO SEMESTRE 2016 » LATIN TRADE
2
CONTENTS
SPECIAL EDITION SECOND HALF 2016 / VOL. 24 / No. 2
4 LETTER FROM THE EDITOR
The abyss straight ahead Big multilatinas have invested in plant and
equipment, even in the hardest of times. It’s a lesson for smaller companies that are falling dangerously behind. The imperative now is finding ways to adopt technology intelligently.
By Santiago Gutiérrez
6 THE CONTRARIAN
Square peg in a round hole The tribulations of investing in Cuba
By John Price
10 LT.COM
LATIN TAX INDEX 2016 Top Multinationals, Top Employers.
14 INTERVIEW LT
Innovation and green growth. The new and necessary
paths to growth Interview with José Ángel Gurría, Secretary
General of the Organisation for Economic Co-operation and Development
16 DIGITAL TRANSFORMATION
The rise of the machines and of a new mindset Digital transformation is a little understood
buzzword for most Latin American companies. It is time for them to react or they risk being left behind.
22 LT BOARD OF ECONOMISTS
Inequality, the Latin American Disease? How serious it is. How to alleviate it. Latin Trade’s Board of Economists.
24 MULTILATINAS
Multilatinas, from crisis to innovation
Times are not easy for Latin America. Business leaders can attest to that. The leading multilatinas are aware that innovation remains an imperative even in times of economic adjustment.
32 OPINION
Do devalued currencies help the Latin American private sector? By Lourdes Casanova
34 BRAVO BUSINESS AWARDS 2016 The Council of the Americas is pleased to present
the 2016 BRAVO Business Awards, continuing the time honored tradition, previously organized by the Latin Trade Group, which spans more than two decades recognizing excellence and leadership in the Americas.
52 The culture defines the leader The country where a company operates plays a
key role when it’s time to lead high-performance teams. Adaptability takes center stage.
56 ARGENTINA-INVESTMENTS
Argentina, a silver lining for investors In South America Less than a year after Mauricio Macri dethroned
Cristina Fernández de Kirchner and became the new tenant of the Pink House, investors worldwide have trained their sights on Argentina.
62 OPINION
Look to the future with attention on the business environment and human capital By Jorge Becerra
64 OPINION
The Latin American consumer, now connected In line with worldwide trends, Latin Americans
also are changing the way they buy things.
By Fabiola De La Portilla
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SECOND HALF 2016 » LATIN TRADE LATIN TRADE » SECOND HALF 2016
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The financial statements of the broad majority of larger multilatinas show unfavorable indicators since 2013 in line with the economic slowdown and the strength of the US dollar (which has an impact on figures stated in that currency).
Latin Trade’s Multilatina Index measures the US dollar revenue of the 25 most dynamic non-financial multilatinas and shows that three sectors —oil, food and beverages, and mining—accounted for nearly 70% of total business revenues in 2011-2015. (Total revenues averaged $460.5 billion per year, according to the Index).
Based on the Multilatinas Index, we estimated a composite indicator--base year 2011--to better understand performance by sector. The data in the table shows that the food and beverages and retail industries turned in a better performance than the total for all sectors, which fell at an annual average rate of 4.2% in 2011-15. Production of industrial goods and telecoms also fell, but at a rate below the average, while airlines, mining and oil were the worst performers.
The Latin Trade Multilatinas Index for April-June 2016 shows a relative improvement in the behavior of firms. Although the majority of sectors kept falling, they did so at a much slower pace than in the second quarter of 2015. In fact, in the food and beverages sector, revenue in US dollars increased by five percent in the period.
Multilatinas
Times are not easy for Latin America. Business leaders can attest to that. Nevertheless, while some industries are improving in relative terms, the leading multilatinas are aware that innovation remains an imperative even in times of economic adjustment.
FROM CRISIS TO INNOVATION
BUSINESS LEADERS ARE NOT IN “WAIT MODE”Despite the signs of hope, the region is far from buoyant. “These are very challenging times for multilatinas,” Nicola Calicchio, head of Latin America for McKinsey, told Latin Trade. The positive news is that, according to the consultant, corporations are not centered solely on adjusting.
In comparison with the region’s big crisis at the end of the 1990s, many things are different now, starting with the profile of businessmen. “Today’s business leaders are not the same as those of 1999. They do not use the crisis as an excuse for their performance,” Calicchio explained. “Leaders now just decided not to be part of the crisis.”
Airlines, mining and oil were hard-hit by the new economic conditions in the region.
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In the view of the McKinsey consultant, this illustrates that multilatinas (and companies oriented to internationalization in general) are not centered solely on operational efficiencies, but are also determined to extract the maximum potential from the markets where they operate.
In many cases, the strategy is almost one of business as usual. In this regard, FEMSA told Latin Trade that “from a long-term perspective, the temporary volatility in the markets that we participate in does not lead to reductions in investments or delays in our business strategy.”
Further, some multilatinas have continued to expand their markets even under the current adverse scenario. “Firms are trying
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LATIN TRADE » SEGUNDO SEMESTRE 2016
3
MULTILATINAS
A HISTORY OF SUCCESS
Peru grows steadily at Asian-like rates. How did this economy became a regional star? Its business story.
The companies that perform best are innovative, efficient and aggressive buyers.
The companies that perform best are innovative, efficient
and aggressive buyers.
LEADERSHIPBUSINESSAWARDS
2016
BRAVO
Fern
and
o H
enri
qu
e C
ard
oso
José
An
ton
io M
ead
e K
uri
breñ
a
Ali
Mos
hir
i
Fran
cisc
o G
arza
Egl
off
Mar
cos
Gal
per
ín
Edu
ard
o Pa
dró
n
Th
e C
ity
of M
edel
lín
Patr
icia
Vil
lela
Mar
ino
PERUSPECIAL
» »
»
LAT
IN T
RA
DE
LEAD
ERS
HIP / M
ULT
ILAT
INA
S
SPECIA
L EDIT
ION
/ SECO
ND
HA
LF, 2016
YOUR BUSINESS SOURCE FOR LATIN AMERICA WWW.LATINTRADE.COM SECOND HALF, 2016
BOARD OF ADVISORS Jorge Becerra Richard Burns Raúl Katz Thilo Mannhardt
CEO/EXECUTIVE EDITOR Santiago Gutiérrez
MANAGING EDITORÉlida Bustos
ART & PRODUCTION DIRECTOR Enrique Franco Mendoza
EDITORIAL ASSISTANT Ana María Restrepo
CONTRIBUTING EDITORS Gabriela Calderón (Research)
Adriana Roca
COLUMNISTS Lourdes Casanova, John Price, Kat Rosqueta,
Jorge Becerra, Fabiola de la Portilla
CORRESPONDENTS: LATIN TRADE / LATINTRADE.COM Argentina: Charles Newbery •Brazil: Thierry Ogier (São Paulo)
• Chile: Gideon Long • China: Natalia Villegas • Colombia: Alejandro González • Mexico: Daniela Clavijo, Lucy Conger • Peru: Adriana Roca, Daniel Goya •
Uruguay: Diego Stewart • U.S.: Diego Graglia (California), José Luis de Haro (NY),
David Ramírez (Miami) TRANSLATION: Aimara Farhat, María Victoria Vincent COPY EDITING: Lucy Conger (English), Élida Bustos,
Adriana Camacho (Spanish)
SALES
VICE PRESIDENT María Cristina Restrepo
ADMINISTRATIVE ASSISTANT Andrea Valderrama
TREASURERManhattan Media
LatinTrade.com
DEPUTY EDITOR David Buchanan
COLUMNISTSCynthia Arnson (The Wilson Center), Arturo Franco (The Atlantic Council),
Margaret Myers (The Inter-American Dialogue), OECD
SPECIAL GUESTSFelipe Barrera (Harvard University)
Harold Trinkunas (The Brookings Institution)The World Bank LAC Department
RESEARCHBeatriz Helena Pacheco, Santiago Espitia
ITDennis Rodriguez, Stephanie Schroeck,
Andrés F. Moreno
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TRANSLATION Aimara Farhat
Editora Latin Trade LTD and Editora Latin Trade Colombia SAS • CUSTOMER SERVICE AND SUBSCRIPTIONS: Please visit www.latintrade.com to order online or call 1-305-749-0888 / 1-786-499-9725. Latin Trade (ISSN 1087-0857, USPS 016715) is published in editions in English and Spanish by Editora
Latin Trade Colombia SAS, under license from Manhattan Media LLC. All rights reserved. Reproduction in whole or in part of any text, photograph or
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LATIN TRADE » SECOND HALF 2016 SECOND HALF 2016 » LATIN TRADE
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THE NEW ROAR OF THE INCA PERU
SPECIALThe roar of the Inca has been reverberating since the start of the new millennium. Peru´s economy has surged: annual per capita GDP leapt from $1,970 in 2000 to an amazing $6,120 in 2015, according to World Bank data. Along the way, the country posted annual growth rates of up to 9.8 % (in 2008), and not a few people are branding the country as “the Asian tiger of South America” in light of this economic and social transformation. The recent triumph of Pedro Pablo Kuczynski in the presidential race puts a widely known economist with global connections at the center of power and places Peru on the threshold of one of the most exciting crossroads of its recent history: will the country succeed in implementing the reforms that would make it possible to finish transforming the nation into an economy of the first order? The Peruvian business community is holding its breath.In this context, Latin Trade offers an overview of the significant milestones and the pending challenges that lie ahead for the country’s leading economic sectors.
66 SUSTAINABILITY
You’d better save the world The concrete ways in which big corporations
are making business sustainability, economic development and social goals compatible.
68 OPINION
High Impact Philanthropy: making a difference
in Latin America By Kat Rosqueta
70 PRIVATE AVIATION – TRENDS
The many forms of luxury The major interior design trends for private
jets today are marked by the ability to make these aircraft an extension of their owners’ personalities.
74 SPECIAL SUPPLEMENT PERU
The new roar of the inca Peru´s economy has surged: annual per capita
GDP leapt from $1,970 in 2000 to an amazing $6,120 in 2015, according to World Bank data.
88 HEALTH-TOP MANAGEMENT
Keeping the boss healthy US clinics open their doors to Latin American executives
92 WATCHES
Timeless timepieces The appeal of luxury watches is undiminished.
94 EVENTS
CFO Forum Bogotá CFO Forum Buenos Aires CFO Forum Miami
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SECOND HALF 2016 » LATIN TRADE
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Philanthropic funders think carefully about how much money to give to organizations and projects that strive to tackle challenging problems of development and inequality. One of the tricks of the trade is to get the amount right, giving
enough money at the right time to support efforts to combat poverty, improve health and education and help build resilient communities. Funding of non-governmental organizations (NGOs) must be calibrated to fit the needs of the project and the ability of the NGO to administer funds and deliver services. The art of philanthropy also requires selecting those projects where a donation can produce the most favorable results for people in need and their communities. The team of researchers at the Center for High Impact Philanthropy at the University of Pennsylvania studies
✱ By Kat Rosqueta
High Impact Philanthropy:
PHILANTHROPY
the social impact of projects in order to help funders worldwide produce more good through their giving. Our research has identified programs in Latin America that successfully achieve social impact. We offer tips for funders by citing examples of programs that have been shown to pave promising pathways to progress in Latin America.
1) Support evidence-based programs. Research shows that “graduation model” programs, which help ultra-poor women gradually increase their income and assets can successfully move families out of extreme poverty. One such program, Chemen Lavi Miyo, of Fonkoze in Haiti, provides women with assets–materials for constructing a 96- sq feet home with a sturdy roof and latrine and a water filter and offers support for each woman to launch two income-producing activities of her choice, including
MAKING A DIFFERENCE IN LATIN AMERICA
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LATIN TRADE » SECOND HALF 2016
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✱ By Kat Rosqueta
KAT ROSQUETA is the founding executive director of the center for high impact philanthropy at the university of pennsylvania.
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raising various types of livestock or selling merchandise. During the past decade, the program has served more than 3,600 ultra-poor women, and 97 percent of them have successfully “graduated” out of extreme poverty.
Research also shows that community-based delivery of health care and prevention is an effective way to improve health of the most vulnerable members of underserved communities, such as women and children. Organizations like Curamericas in Guatemala and Hospital Albert Schweitzer and Partners in Health in Haiti rely on community health workers to provide health education, immunizations, maternity care, and other services. This community-centered approach leads to improved health outcomes, including drops in maternal and child mortality and lower rates of infectious disease.
2) Partner to expand impact. Donors who want to go beyond writing a check can consider engaging with nonprofits in other ways. For example, in 2006, the Ford Foundation partnered with the Consultative Group to Assist the Poor (CGAP), local NGO s, and research institutions to test the graduation model for providing a package of assistance to allow the extreme poor to improve their livelihoods and skills. The partnership supported pilot programs in eight countries around the world, including Haiti, Honduras, and Peru. This unique structure has produced results in a variety of settings and lessons for a wider application of the graduation approach.
Another form of partnership is to work alongside nonprofits toward a shared goal. In 2012, Root Capital, which invests in small and growing agricultural businesses in Latin America and Africa, discovered its financial systems were straining under rapid growth, making it more difficult to comply with lender requirements. When these limitations came to light, instead of withdrawing support, one of the organization’s biggest lenders, the Bill & Melinda Gates Foundation, decided to engage in a 15-month, hands-on effort to help Root
Capital improve its financial discipline. Though the effort was challenging for both parties, this strict oversight helped Root Capital improve its accountability to lenders and ultimately allowed it to reach more borrowers.
3) After disasters, support organizations with strong ties to local communities. In the wake of a destructive natural disaster, hard-hit communities need aid from both large international aid organizations and smaller local agencies with deep community knowledge and trust. Large organizations are able to mobilize quickly their international networks and resources. For example, after the devastating 2010 earthquake in Haiti, the international aid organization, Doctors Without Borders, built field hospitals to treat thousands of people critically injured, while Save the Children created safe play centers and helped develop the long-term plan for rebuilding schools.
While smaller local organizations are not dedicated exclusively to disaster relief, these groups often have pre-existing local ties that make their work especially effective after disasters. Local organizations also remain in affected communities long after the headlines fade to support long-term rebuilding efforts. For example, Hospital Albert Schweitzer staff worked alongside international volunteers to provide care for the unexpected massive demand for patient care, while Fonkoze helped the poorest of the poor support their families for the long term after the earthquake.
The Center for High Impact Philanthropy at the University of Pennsylvania provides public guidance, educational programs, and advice on the best strategies for achieving social impact. To learn more, visit www.impact.upenn.edu. Hands-on coaching is available from our expert team through upcoming sessions of our Funder Executive Education program. LT