Thursday 26 Nov 2020 | 00:45 | SYDNEY
Thursday 26 Nov 2020 | 00:45 | SYDNEY

Why Latin America matters to Australia

5 December 2007 15:39

Guest blogger: Jose Blanco, Vice Chair of the Council on Australia-Latin America Relations and Chairman of the Australia-Latin America Business Council. Jose gave a presentation to the Lowy Institute in September 2006 about Latin America's move to the left.

The Rudd Government promises to unleash a wave of change that will have a dramatic impact upon Australia’s position in a global economy that, at least in the short term, is unlikely to enjoy the same economic growth and stability that we have known over the past decade. The implementation of new education, industrial relations and environmental policies will take centre stage, but no less important are the decisions that will be taken as regards Australia’s international strategy, both political and commercial. In this regard, the government should take a much closer look at selected markets in Latin America and implement policies that will help Australia benefit from the positive developments taking place in them. The similarities Australia has with these markets makes them ideal destinations for our know-how, services and capital.

Regional powerhouse, Brazil, may not be growing at the rate of China or India, but it is making progress towards earning its BRIC rating. Its strength and potential for growth are in resources and agriculture, two areas where Australia has strong credentials, and where the combination of our respective assets and capabilities could yield benefits well in excess of those that we can achieve individually. Chile’s political and economic stability sees it in advanced negotiations to be the first Latin American nation to sign an FTA with Australia and close to securing OECD membership. Positive economic and political news also surrounds markets as diverse as Mexico, Peru and Argentina, to name a few.

Latin America warrants our attention because it represents a market of some 500 million consumers who have increasing buying power and with whom we share many cultural similarities. It already contributes a growing number of students to our teaching institutions and provides fertile ground for these institutions to expand into a region thirsty for our language and skills set. It has the potential to be a source of inward investment, as shown by the acquisitions made by companies as diverse as Cemex, CVRD and Antofagasta Minerals.

Given due attention, Latin America can prove itself to be much more relevant to Australia than has so far been the case. Current trade and investment flows do not do justice to the potential of the relationship. Its appeal is not only as a destination for our trade and investment, but also as an alternative springboard into other markets. Beyond providing fertile ground for our companies, we need a stable Latin America to also contribute to addressing the challenge of climate change, to ensuring global harmony and economic growth.

The challenge is for the Rudd Government to deliver on its promise of ‘New Leadership’ and to respond positively to the opportunities that Latin America has to offer.