Calderón: Opportunities for Bermuda in Latin America
There are business opportunities for Bermuda in Mexico and elsewhere in Latin America, but the Island needs to make itself better known in the region.
That was the sentiment of former president of Mexico Felipe Calderón as he addressed the Capital G Private Wealth Conference at the Fairmont Southampton yesterday.
The keynote speaker saw opportunities for the Island’s financial and insurance sector to become more involved with Mexico and its South American neighbours, and also the possibility of some of Mexico’s 116 million people being attracted to Bermuda as a tourist destination.
A fundamental requirement for Bermuda is to spread knowledge about what it has to offer to the people of Mexico and Latin America, said Mr Calderón.
“ We have not enough information about Bermuda, that’s my conclusion from this trip,” said the former president, who ruled the Central American country between 2006 and 2012. “The relationship has tremendous potential. We in Mexico, and probably a lot of other Latin American countries, don’t realise much about this country and about its capabilities in particularly in financial respects.
“The opportunities are there, so we need to provide a little bit more effort in order to strengthen that relationship. There are a lot of opportunities for Mexican and Latin American companies related to financial sector in Bermuda and at the same time opportunities for Bermuda’s companies in Mexico and Latin America.”
Giving an example, Mr Calderón said: “If we are able to develop project finance in a viable way there will be huge long-term assets that will match perfectly with long-term liabilities. So, there are two sides to the same coin we have the long term assets, you have the long-term liabilities, if we are able to match that we will get the infrastructure that we need and investors in Bermuda will have the profits in the long-term.”
“So, we need to figure out how do we do and we need to that even at the level of governments and think what are the advantages of working together.”
Bermuda and Mexico signed a tax information exchange agreement (TIEA) in 2009, a treaty which Mr Calderón said provided a “clear and safe field for companies” to work in.
He spoke of opportunities for insurers, reinsurers and others to work with Mexico for mutual benefit, pointing out the region faces its share of natural catastrophes such as earthquakes and hurricanes.
“It is going to be a very big and important market for Bermuda. In a capital intensive industry insurance for others there are huge opportunities in our country, and at the same time some of those companies in Mexico are looking for the benefits of investing in Bermuda,” he said.
As well as natural disasters, Mr Calderón pointed out that “there will be more with climate change, which is hitting really hard in Caribbean countries. So, for the insurance industry there is a very important opportunity there. And for Mexican insurance companies operating in Mexico they have an opportunity with support of Bermuda.”
The former president explained to delegates, including Governor George Fergusson, how Mexico had been able to survive the economic storm of the global downturn and continued to grow its economy. He then presented a six-point conclusion on how countries might improve their economies.
He said it was important to have sound economic fundamentals even when it hurt. “Fiscal balance is a basic fundamental. The old fashioned recipe has proven to be right again, ‘Don’t spend more money than you can afford’. Back in the 1980s and 90s Mexico and other Latin American countries lived the consequences of forgetting this simple rule. You can use a deficit to boost your economy just once and no more.”
Countries need to structure and refine their economies to reflect the changing world economy, said Mr Calderón, adding: “The key element is the political will to carry our profound reformations in order to boost competitiveness and sustainable growth.”
He said a commitment to free trade was needed and fourthly an investment in people. “We need to strengthen our investment in human capital to boost our economies, but most important because it is the right thing to do. Probably most important job of government is to provide opportunities for it people mainly through education and health services,” he said.
Investing in infrastructure is vital, according to Mr Calderón, who saw this as an area where Bermuda could be a player. “There is a large need for infrastructure in developing countries which is where the potential for growth is the greatest, but at the same time there is huge availability of money in capital funds. That money is looking for better opportunities for investment, and there are viable projects. We need to match those long term assets with long term liabilities.”
His final point, and one for which he is known to be a passionate advocate, was the need for global responsibility to long-term challenges such as climate change.
And speaking on possible tourism opportunities between Mexico and Bermuda, Mr Calderón said: “You have a marvellous country and many Mexicans do not realise how beautiful Bermuda is, or how close.” He added that Mexicans are increasing becoming well-travelled tourists looking for better places to visit and said the two countries needed to strengthen mutual tourism links.
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