Supporting private initiative in Latin America

by Ewout Klungel

Although The Courier's main focus is on ACP countries, we try from time to time to feature events in other parts of the developing world. The author of this article, who works for the UNDP's Empretec programme in Uruguay, reports on the initial success of an EU-sponsored scheme designed to promote the expansion of business links in South America.

After the infamous, 'lost decade' of the 1980s, Latin America is regaining the confidence of international banks and foreign investors. A wave of democratisation has swept away the military dictatorships, economic reforms are starting to bear fruit, and ambitious integration programmes such as the Mercosur, have moved high on to the political agenda.

To help reinforce economic progress in the region, the EU recently set up the AI-lnvest Programme-an initiative to promote entrepreneurial cooperation between the Union and Latin America. It covers such areas as technology transfers, the establishment of joint ventures, educational activities and sub-contracting of public works. Initiated with a grant of ECU 20 million (with a 50% maximum for EU participation in projects) the programme covers entrepreneurial cooperation between 33 European and Latin American countries. One of its most innovative characteristics has been the creation of Eurocenters of Entrepreneurial Cooperation. By the end of 1994, 12 of these were up and running and 8 more were in the pipeline. Their function is to bring together all local organisations and institutions that have the potential to contribute to entrepreneurial cooperation and are interested in participating. This covers such bodies as chambers of industry and commerce, employers' and professional organisations, and institutions specialising in entrepreneurial or development cooperation. The principal tasks of the Eurocenters are to:

-Inform enterprises about the Al-lnvest Programme and the opportunities it provides;
-Look for European business partners using the close links that have been established between the Eurocenters and their European counterparts who are members of the Coopeco (Economic Cooperation) network;
-Analyse the enterprises' needs and improve both their professional image and the image of their industrial cooperation and/or investment projects.

The Eurocenter Uruguay

A look at the functioning and accomplishments of the Eurocenter in Uruguay offers a perspective of how the Programme operates. The country's Chamber of Industry was selected as the location for the Centre which began operating in October 1994. It brings together various organisations including the sectoral commission of Mercosur, the national SME organisation, the Chamber of Commerce and the Associacion Empretec (which coordinates several UNDP programmes and has wide experience in organising trade missions and business negotiation rounds). All of these bodies are able to consult the EU's BC-Net network, a database containing company profiles which is intended to match the interests of European and Uruguayan enterprises.

Additionally, the Eurocenter Uruguay has developed a series of activities promoting the Al-lnvest Programme. A brochure has been designed, 1500 enterprises have been directly informed about the programme, articles have been published in the country's main newspapers and radio interviews have been given. Most importantly, all of Uruguay's main business associations have been thoroughly briefed about Al-lnvest.

Information on business conventions in the EU is systematically disseminated to Uruguayan companies. Trade missions have been organised to fairs in Santiago and Cordoba producing promising results in terms of both export and import opportunities. The most recent trade mission was to Hannover. Future plans include an Italian trade mission to Uruguay and an Al-lnvest sponsored Uruguayan mission to Asturias.

One of the biggest and most promising activities is planned for October 1995. This is an EU-sponsored Round Table Business Meeting, organised in association with Empretec, which is expected to attract some 300 participants. It will cover five sectors: plastics, textiles, food, electronics and biotechnology, and is open to any interested company. The only requirement is the submission of a company profile for the Eurocenter to review, so as to ensure that the enterprises attending have similar interests. The European companies participating will be selected by the organisations that are members of the Coopeco network. The Eurocenter maintains regular contacts with 'Coopecos' in the larger EU Member States but Robert Villamil, who is the Eurocenter's Director, is keen to encourage participation from other Member States. 'Events such as these are a great opportunity to initiate cooperation with countries that trade with or invest little in Uruguay,' he points out.

There are already many examples of successful cooperation under the Al-lnvest Programme and, with numerous business conventions planned for the coming year, the momentum is expected to be maintained. Of course, business cooperation between Europe and Latin America is not as developed as it could be. Distance, language barriers, and different business cultures all have the effect of limiting contacts, especially at the level of SMEs. But as Mr Villamil emphasises, 'the Al-lnvest Programme, through its cooperation networks and the business conventions it facilitates, can act as a stimulus to overcome these barriers, bringing European and Latin American enterprises together.'