“Latin America is the region hardest hit by the economic crisis, which is causing increased inequality and social conflict. In this context, we as companies can play our part and strengthen our structural investment in the region. What’s more, investing in Latin America right now is an opportunity for European companies, and the insurance industry can contribute to increasing its penetration in the economy, which is absolutely necessary for the region’s development.”
These are the remarks made by the CEO LATAM REGION, Jesús Martínez Castellanos, in a round table on relations between the European Union and Latin America, organized by Madrid Platform, with José Ignacio Salafranca, Director of the European Union’s Economic and Social Committee, International Advisor to the Presidency of the CEOE (Confederación Española de Organizaciones Empresariales — Spanish Confederation of Business Organizations) and Vice President of the Euroamerica Foundation; Maryleana Méndez, General Secretary of ASIET (Asociación Interamericana de Empresas de Telecomunicaciones — Inter-American Association of Telecom Enterprises); Ingo Ploger, President of IP Desenvolvimento Empresarial e Institucional (a consulting company in Brazil); and Clara Arpa, CEO of the Arpa Group and President of the UN Global Compact in Spain.
We are living through “impossible times,” characterized by the current political, health, economic and social crisis of a scale not seen since World War II. Issues like the will for political action in the current, extremely limited circumstances opened up a discussion that addressed issues such as the special importance of treaties such as the EU-Mercosur agreement, the opportunity for a common area of responsible and sustainable investment, innovation as a vector for greater trans-oceanic collaboration, and connectivity, as a key element in regional trade.
During this meeting, moderated by Celina Pérez Casado, Secretary Organization of CEAJE (Confederación Española de Asociaciones de Jóvenes Empresarios — Spanish Federation of Young Entrepreneur Associations), Martínez Castellanos referred to the uncertainty that weighs on Latin America and the Caribbean — the hardest hit economically, with a fall in GDP of 7.4 percent in 2020, more than 2 million SMEs closed for business and more than 30 million people left unemployed.
According to MAPFRE Economics forecasts, recovery will be uneven among the different countries. A return to the normal pre-COVID situation is not expected until between 2022 and 2023 on average in the region. In this context, Martínez Castellanos agreed that the Latin America and Caribbean region needs to increase private investment and highlighted that this should be structural and long-term, not speculative but responsible and inclusive; value-generating for all stakeholders and environmentally sustainable. He added that such private investment, in turn, requires clear rules, structural reforms and investment in infrastructure and logistics to grow in the region.
During his contribution, he insisted that investment from Latin America is an opportunity for the European Union: The region is the fourth largest investor in Spain and, although it remains heavily dependent on the US, it has already made China, the EU’s greatest threat, its second largest trading partner. He therefore recalled that it is “necessary to modernize agreements with LATAM countries and trade alliances such as Mercosur or the Pacific trade alliance.”
In front of those present, guests and those watching via video call, he highlighted LATAM’s importance to MAPFRE. The company is present in 17 LATAM countries and is the region’s leading Non-Life insurance company and first multinational insurance company, where it earns 30 percent of all revenue, over 40 percent of attributable profits and where 37 percent of its employees live.
MAPFRE, he said, is a long-term investor that believes in and is firmly committed to this region. “It has helped us in times of other crises, such as the financial crisis of 2008–2011.” Among the positive forecasts, he said that the EU commitment to sustainability will be “a very positive thing for LATAM,” and recalled that, with 85 percent of the world’s lithium reserves, the region will be able to play a prominent role in the expansion of electric cars and see an increased demand for iron, steel and platinum.