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Picture and information for closing remarks of Dr. Jamil Mahuad

Disclaimer: These notes below were taken by students during the conference. Any misrepresentation of facts, omission or error of interpretation is unintentional. They are intended to encapsulate the presentations for conference attendees and do not represent the views of MIT Sloan School of Management.

Former President of Ecuador (1998-2000)

 “How should the relationships between firms, governments and social movements be regarded from the point of view of public service?”

In the last 5 years, 5 out of 10 elected presidents in SA have been ousted before their legal terms ended (only one, Venezuela, came back). “This is an epidemic”.

Latin barometer polls about attitudes about democracy. LATAM is the region with the lowest support. In terms of institutions support is even weaker…people don’t believe in the Supreme Court, in the Congress, etc.

Accusations are always the same: corruption, incompetence or violation of human rights. Who are the ones overthrowing the government? Not a specific group (old guard, leftists…not always, also young, rightists, etc.), not a specific ideology as well (some opposed to reforms, some opposed to too much done, some because the reforms are not done).

Why is this happening? See it as an equation:

Expectations of the population – Delivery of the government (capacities) = Social discontent

 You can work on both sides:

Expectations: Political campaigns full of wishful thinking, make a lot of promises, unrealistic assumptions…big responsibility from politicians, but they’re not alone…media (local and global), international environment, etc. all contribute….

Delivery: How to improve this? Initiatives all over the place: downsize the government, give continuous training, etc….but governments are still short on this side….but a big problem is that there’s a continuous effort to give more rights to the people but without receiving the corresponding responsibility

 

What’s happening with our continent then?

bullet FDI decreased for the 3rd year in a row in LATAM, and the rate is increasing. FDI is less significant today for the countries than remittances from emigrates…..we’re exporting resources
bullet The needed political and social stability to provide incentives for investment is not there. Governments are not facing easy options (e.g. a contract signed by the previous government under charges of corruptions, do you punish corruption or respect the law (signed contract)?)
bullet Poverty is a striking problem (25% of the continent is under the line of poverty).
bullet We need to find a way to lure foreign investors
bullet Presidents sometimes go by the book (e.g. sound fiscal policy gives a solid image of the country and attracts foreign investment), embark in too many things, but even more are needed…even so, when you see the figures, only 1/3 of all FDI in the world goes to developing countries, 1/3 of that goes to China, 2/3 of this goes to underdeveloped like Mexico and Brazil…and leaves practically nothing for the small developing countries like Ecuador

Dr. Jamil Mahuad has been a controversial figure in Ecuador

Dr. Mahuad was the President who implemented some of the key reforms in Ecuador

Excellent questions were asked to Dr. Mahuad

After his presentation he devoted time to answer one-on-one questions with students

We want to thank Dr. Mahuad for his efforts during the conference

Dr. Jamil Mahuad with Francisco Gonzalez-Meza (Organizing Committee), who introduced him as keynote speaker

Questions or problems regarding this web site should be directed to fgonzale@sloan.mit.edu