The DNA of Regional Integration
Latin Americans’ views on high-quality
convergence: innovation, equality and care
for the environment
Gustavo Beliz
Santiago Chelala
Instituto para la Integración de
América Latina y el Caribe
(INTAL)
TECHNICAL
NOTE Nº
IDB-TN-1120
October, 2016
The DNA of Regional Integration
Latin Americans’ views on high-quality
convergence: innovation, equality and care
for the environment
Gustavo Beliz
Santiago Chelala
October, 2016
Cataloging-in-Publication data provided by the
Inter-American Development Bank
Felipe Herrera Library
Beliz, Gustavo.
The DNA of regional integration: Latin Americans' views on high-quality convergence:
innovation, equality and care for the environment / Gustavo Beliz, Santiago Chelala.
p. cm. — (IDB Technical Note; 1120)
Includes bibliographic references.
1. Latin America-Economic integration-Public opinion. 2. Latin America-CommercePublic opinion. 3. Latin America-Foreign economic relations-Public opinion. 4.
International economic integration. I. Chelala, Santiago. II. Inter-American
Development Bank. Institute for the Integration of Latin America and the Caribbean. III.
Title. IV. Series.
IDB-TN-1120
JEL Codes: J14; J15; O1.
Keywords: Latin America, Trade, Regional Integration, International Relations,
Economic Integration, Political Integration, Infraestructure, Innovation, Environment,
Equality, Country Brand, Public Opinion.
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The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American
Development Bank, its Board of Directors, or the countries they represent.
INTAL/LATINOBARÓMETRO
ALLIANCE
DNA
THE
OF
REGIONAL
INTEGRATION
LATIN AMERICANS’ VIEWS
ON HIGH-QUALITY CONVERGENCE:
INNOVATION, EQUALITY,
AND CARE FOR THE ENVIRONMENT
Gustavo Beliz
Santiago Chelala
THE DNA OF REGIONAL INTEGRATION
ÍNDEX
· Preface // 4
· Executive Summary // 6
· Objectivity and Subjectivity: Why We Cross-Referenced the Tables // 14
· Background // 14
· Technical Details // 15
· How the Study is Structured // 21
· What Does Integration Mean for Latin Americans?// 22
· The Relationship between Integration and Development // 22
· The Features of Integration // 24
· Economic and Political Integration // 24
· The Two Sides of Integration // 26
· Integration and Institutions // 30
· Where Does Integration Have an Impact? // 30
· Integration and Export Diversification // 34
· Integration and Tariff Policy // 35
· Box. Current Negotiations // 36
· Box. Export Concentration: Products and Destination Markets // 37
· Integration and Trade Agreements // 38
· Investment. How Important Is Foreign Capital? // 39
· Opinions of Foreign Investment // 39
· The Economies That Are Most Open to Receiving Capital // 42
· Box. Foreign Direct Investment in Latin America: Evolution and Origins
· Box. Multilatinas: Latin American Companies That Invest // 48
· Infrastructure and Development // 49
· Efficiency and Productivity // 49
· Box. COSIPLAN/IIRSA. The State of Integration Infrastructure // 51
· Infrastructure for Competitiveness// 52
THE DNA OF REGIONAL INTEGRATION
ÍNDEX
· Innovation and New Technologies // 55
· Industry 4.0 // 55
· Expectations Regarding Innovation// 57
· A Window on the Future // 59
· An Interconnected Economy // 61
· Exports with Technology Content // 62
· Box. Investment in R&D in Latin America // 63
· Nation Branding. What Do We Think of Ourselves? // 64
· The Advantages of a Good Reputation // 64
· Where Do We like to Go Shopping?// 66
· Box. How the Rest of the World Sees Latin America // 67
· A Reflection of Reality // 68
· Climate Change and Environmental Awareness // 70
· Willingness to Protect the Environment // 70
· Support for Renewable Energy // 72
· Box. Sustainable Development // 74
· Box. Environmental Aspects within Latin American Countries’ Trade
Agreements // 75
· Pollution and Carbon Footprints // 76
· Box. Green Technology // 77
· Social Inclusion and Equality // 78
· Workers’ Rights // 78
· Box. Node i+i. Social Inclusion Plus Regional Integration // 80
· Integration and Social Mobility // 82
· Final Reflections // 85
· Future Areas of Research // 89
· Nation Versus Region // 90
· Methodological Annex // 110
· References // 112
THE DNA OF REGIONAL INTEGRATION
PREFACE
This report is the outcome of an Inter-American Development Bank (IDB)
regional public good (RPG) that different Latin American and Caribbean
countries helped to create by identifying the information they needed to
perfect the decision-making process on matters of trade and integration.
The mechanism that the IDB foresaw is a three-way process, in which decisions are made in partnership with technical institutions and countries,
which share their experience and knowledge of social demands. In this
case, the countries of the region played a key role in designing an opinion
poll on trade and integration, the results of which we compare with national
statistical indicators. This was made possible by the strategic partnership
between the Institute for the Integration of Latin America and the Caribbean (IDB/INTAL), part of the Integration and Trade Sector, and Latinobarómetro, marking the start of the dialogue between two databases with very
specific features. The first of these is the highly complete information on
trade and integration that INTAL has acquired over its 51-year history. The
second, the public perceptions that Latinobarómetro, a pioneering public
opinion poll, has been measuring in the region for over two decades.
Cross-referencing the results of over 20,000 exclusive surveys that were
carried out in 18 Latin American countries with national statistics has helped
create a powerful tool for designing integration and trade strategies.
Comparing citizens’ opinions and national statistics allows researchers to
find correlations and asymmetries between public perceptions and the region’s actual performance, thus contributing to improving planning and impact assessment in public policy design.
We believe that integration processes should reflect both dimensions: they
must not overlook classic indicators but they also need to include the voice
of the people of Latin America, which is an essential part of any regional
strategy seeking to construct a form of governance that is underpinned by
the demands of society.
We know that there are asymmetries in the actual performance of public
policies. This is why we need to identify our differences, build on our similarities, establish precise goals, segment audiences, and create clear messages that enable us to take firm steps toward improving trade between our
nations. We will have achieved this goal if we can design a sort of Waze for
integration, which shows us the clearest roads forward and where there is
congestion or problems that might slow us down.
We understand integration in a broad sense, including both traditional
tariff-related issues and other factors that are becoming increasingly important in trade negotiations, such as labor and environmental standards,
technology transfer, and cooperation around investment and infrastructure.
Consequently, we have included specific questions on innovation and nation branding, adding value to production, and export diversification.
The results that we present in this publication are supported by an analysis
THE DNA OF REGIONAL INTEGRATION
4
PREFACE
of the different dimensions of regional integration and the current state of
trade negotiations between countries and regional blocs.
The publication clearly reveals that Latin Americans also associate integration with environmental factors, social issues, and academic, scientific, and
technological exchanges. It also shows that they are demanding high-quality integration that improves their access to sustainable goods and services
and new technologies.
In a world where protectionism is on the rise, Latin Americans still want to
pursue integration. The map of information and knowledge for each area
that we present here is what makes up the DNA of regional integration.
It reveals our continent to be a very diverse one that needs to converge
around fundamental issues that bolster multifaceted integration processes
and prioritize the common good.
Antoni Estevadeordal
Gustavo Beliz
Marta Lagos
Manager, Integration
and Trade Sector, IDB
Director
INTAL - IDB
Director
Latinobarómetro
THE DNA OF REGIONAL INTEGRATION
5
EXECUTIVE SUMMARY
INTEGRATION AND DEVELOPMENT
There is an enormous consensus among Latin Americans around deepening
integration processes. In the region, up to 89% of people support integration,
which clearly reflects countries’ leanings and sets Latin America apart from
other regions. In a world in which protectionism is on the rise, Latin Americans
want to pursue integration.
In addition to this consensus, integration with the region and the world is a
development priority for one out of every four Latin Americans, although their
number one priority is social policies. An average 77% of Latin Americans support economic integration, a figure even greater than the 60% who support
political integration. These figures are high in comparison with those for other
survey questions, such as support for democracy, which an average 54% of
respondents said they were in favor of.
There is no clear correlation between this deep-rooted sense of regional belonging and citizens’ evaluations of integration policies in each country. Some
55% of respondents approved of their country’s integration strategy while 36%
felt that their country had done “very little” or “nothing” to integrate into the
region and the world. Integration policies thus need to go the extra mile to live
up to the population’s demands for integration.
In relation to how this link with the rest of the world should be structured,
demand for greater integration is more marked in countries whose exports
are more concentrated (in terms of quantity of products) and which have signed fewer trade agreements. This is a key starting point from which to move
forward with export diversification policies that will enable a wider range of
production sectors to play a part in integration processes. Foreign investment
is welcome in Latin America. Some 71% of Latin Americans say that foreign
capital is beneficial for local economies, while only 15% believe it to be harmful.
Over the last two decades, resistance to foreign investment has come down
by 5 percentage points (from 20% to 15%), which reflects less aversion toward
foreign investors, a key aspect of the business climate in each country.
THE DNA OF REGIONAL INTEGRATION
6
EXECUTIVE SUMMARY
PHYSICAL CONNECTIVITY
On a scale of 1 to 10, people’s willingness to pay taxes or take on loans to improve infrastructure that would facilitate integration was 3.8 on average. This
willingness was greater in countries with less competitive infrastructure. Latin
America and the Caribbean invests just 3% of its gross domestic product (GDP)
in infrastructure, half the level of more developed countries. Logistics costs
for SMEs in the region can represent more than 40% of product values, while
in more advanced economies they stand at just 8%. Despite this deficit and
the resulting loss in competitiveness, Latin Americans are still not sufficiently
willing to make the necessary efforts to improve their infrastructure and they
rank other priorities related to social policies more highly. In countries where
infrastructure is most lacking, greater efforts are needed to improve physical
connectivity (integration hardware) and it is encouraging that the populations
of these countries are more willing to support such efforts.
INNOVATION AND NEW TECHNOLOGIES
Latin Americans place great value on innovation. In relation to different aspects
of daily life—such as children’s education, creativity at work, or even in terms
of the country as a whole—innovation was ranked higher than 9 on a scale of
1 to 10. Far from being separate from integration processes, innovation is increasingly associated with these. Almost four out of every ten Latin Americans
claim that integration has had a positive impact on access to technology. Their
technology-related expectations revolve principally around healthcare: some
48% of Latin Americans argue that healthcare and medical treatment are the
areas where technology will make the greatest progress and which they feel
should be priorities for scientific research. Some 32% agreed that it would be
a positive thing if the use of robots who could care for sick people and the elderly became widespread.
However, other cutting-edge technologies are not so widely accepted. This was
true of cultured or synthetic meat (and of drones and driverless cars, among
other technologies), which only 8% of Latin Americans considered a positive
invention. It may be the case that these less positive assessments are related to
the threats that these new technologies pose to some productive activities (as
artificial meat does to traditional meat farming). One way of taking on these
fears would be to observe the impact of new technologies on production and
employment with a view to the future so that countries could take the neces-
THE DNA OF REGIONAL INTEGRATION
7
EXECUTIVE SUMMARY
sary precautions to cushion the impact of possible shocks to the market. Such
initiatives have yet to be undertaken at a regional level.
NATION BRANDING AND REGION BRANDING
Sports, tourism, and food are the three mainstays of “brand Latin America.”
Some 57% of Latin Americans believe that the rest of the world is familiar with
their country because of its sporting achievements. Carnivals and violence
are other features that are frequently associated with Latin America. Local
consumer preferences focus on the United States, which is Latin Americans’
favorite source of music (12%), clothing (27%), and food (10%) and their preferred tourist destination (25%). Their favorite soap operas come from Mexico
(23%), their favorite electrical appliances from China (21%), and their favorite
sports stars from Brazil (13%).
In general, there was an overlap between nation branding and the objective
characteristics of each economy. Rethinking ways of improving international
perceptions of each sector is fundamental if Latin America is to successfully
target the export diversification process. A solid nation-branding process and
a good reputation are incentives for local entrepreneurs and facilitate the
opening up of new markets.
SOCIAL AND ENVIRONMENTAL SUSTAINABILITY
Sustainability is another priority for Latin Americans in both social and environmental terms. Some 51% of respondents agreed that social policies should
be the top development priority and 40% said that integration had a positive
impact on employment, which runs contrary to the preconception that “foreigners come here to take away our jobs.” The countries that send the largest
numbers of immigrants to the rest of the region are also the most willing to
pay more for products that are manufactured in a way that respects the rights
of both local and foreign workers. On average, 46% of the region’s population
are willing to pay more for products if the manufacturing process respects
workers’ rights. Latin America is one of the most unequal regions in the world
and is facing the challenge of how to crush the hard core of inequality, which
is illustrated by the fact that the most unequal countries in the region are also
the ones that are least willing to pay more for socially sustainable products.
THE DNA OF REGIONAL INTEGRATION
8
EXECUTIVE SUMMARY
In terms of environmental sustainability, 49% of Latin Americans said they
would be willing to pay up to 20% more for products if the production process did not harm the environment. In the age of smart consumption, sustainability is an asset that is valued by Latin American consumers. Concern for
the environment is also related to the structure of the energy matrix and pollution levels: the countries with the highest pollution levels are the ones demanding a technological response to that problem. Some 31% of Latin Americans trust that technological innovations will have a positive impact on the
energy supply.
RESULTS FOR 2016 VS 2015
The comparison between the 2015 and 2016 surveys showed that Latin Americans’ opinions of integration issues are relatively stable. Their beliefs on the
importance of integration, their support for trade in goods and services, and
their willingness to pay taxes or take on debt to improve integration infrastructure remained at the same average levels as the previous year. People’s
willingness to pay more for products that respect the environment and workers’ rights increased in both cases by 5 percentage points, going from 44%
to 49% in relation to the environment and from 41% to 46% for employment.
THE DNA OF REGIONAL INTEGRATION
EXECUTIVE SUMMARY
THE EVOLUTION OF ATTITUDES TOWARD INTEGRATION
INTAL/LATINOBARÓMETRO 2015 AND 2016
INTEGRATION WITH THE REGION AND THE WORLD
Which of the following topics are most important
for development in your country?
Answers for integration with the region and the world
2015 24%
24% 2016
TRADE IN GOODS AND SERVICES
Do you agree or disagree that your country should be able to buy goods
and services from any other country in the region and that any other country should be able to sell goods and services to your country?
“Strongly agree” and “agree” are the only responses shown
2015 69%
69% 2016
INFRASTRUCTURE
On a scale of 1 to 10, where one is “not at all willing” and “totally willing,”
how willing are you for taxes to increase or for your country to take on debt
to finance infrastructure works that will facilitate integration?
2015 3,8%
3,8% 2016
ENVIRONMENT
Do you agree on the need to include commitments relating to care for the
environment in regional integration agreements, even if this implies paying
approximately 20% more for products?
“Strongly agree” and “agree” are the only responses shown
2015 44%
49% 2016
SOCIAL INCLUSION
Do you agree on the need to include commitments relating to the rights of
local and foreign workers, even if this implies paying approximately 20%
more for products?
“Strongly agree” and “agree” are the only responses shown
2015 41%
46% 2016
Source: Compiled by the authors using data from Latinobarómetro 2015 and 2016
THE DNA OF REGIONAL INTEGRATION
10
EXECUTIVE SUMMARY
Although it does not explore causal relationships, this study lists a series of
stylized facts and conclusions that may be of interest. The exercises that involved cross-referencing the two tables—subjective data from surveys on the
one hand and national statistical data on the other—also allowed us to point to
certain typologies and stylized facts, such as the fact that countries with the
highest exports per capita and the most primarized economies are the ones
where there is most demand for foreign investment.
SUBJECTIVE AND OBJECTIVE DIMENSIONS
Based on these exercises, we have built a dynamic map of integration in the region to find out how public policies impact citizens’ opinions and vice versa; in
other words, which specific public opinions could be useful when formulating
integration policies.
The table below summarizes the questions included in the opinion poll and the
21 indicators from the real economy that were compared with these subjective
results.
THE TWO DATA SETS:
PUBLIC OPINION AND NATIONAL STATISTICS
ASPECT
INTAL/
LATINO
BARÓMETRO
NATIONAL
STATISTICS
TRADE
• How important is political and economic integration for development?
• What aspects of life does integration have an impact on?
• How much support is there for trade in goods and services?
• Share of exports covered by the five main products (%)
• Number of free trade agreements signed
• Average MFN tariff (%)
• Herfindahl-Hirschman Index of export concentration
INVESTMENT
• Which economies are most willing to receive foreign capital?
• What impact is integration perceived as having on investment?
• How important do citizens think foreign capital is and which sectors do they prefer it in?
• Exports per capita (thousands of US$)
• Agriculture and fisheries as a percentage of GDP
• Foreign direct investment (% of GDP)
INFRASTRUCTURE
• How important do citizens think infrastructure is for development?
• How willing are they to pay to improve their infrastructure?
• Infrastructure competitiveness ranking
• Revenue from transportation, warehousing, and communication (US$ per capita)
THE DNA OF REGIONAL INTEGRATION
11
EXECUTIVE SUMMARY
INNOVATION
• How important do citizens think innovation is for development?
• How important do citizens think creativity is in children’s education?
• How much do citizens know about new technologies and their potential impact?
• What should countries’ scientific innovation priorities be in the future?
• Research and development expenditure (% of GDP)
• Exports of high-technology products (% of exports of manufactured products)
• Fixed broadband internet subscribers (per hundred people)
NATION BRANDING
• What are the main features of Latin American countries in the eyes of the rest of the world?
• What country do citizens prefer the goods and services that they purchase to come
from?
• Revenue from international tourism (% of total exports)
• Homicide rate per 100,000 inhabitants
ENVIRONMENT
• How important do citizens think care for the environment is for development?
• How willing are citizens to pay more for products that respect workers’ rights?
• How will innovations impact energy-related matters?
• CO2 emissions per capita (tons per inhabitant)
• Carbon footprint (hectares per person)
• Use of alternative and nuclear energy (% of total energy use)
• Electricity production based on renewable sources, excluding hydropower (% of total)
SOCIAL INCLUSION
• How willing are citizens to pay more for products that respect workers’ rights?
• What impact is integration perceived as having on employment?
• How important do citizens think social policies are for development?
• Total immigrants from other countries in Latin America
• Index of restrictions on the movement of people and capital
• Gini coefficient
Source: Prepared in-house using data from Latinobarómetro, 2015 and 2016
Latin Americans no longer associate integration exclusively with the traditional aspects of trade, but instead are demanding more intelligent relations between their
countries and the rest of the world. In other words, they are seeking high-quality
integration that will contribute to improving lives and in which other factors also
play an important part, be they environmental, social, or related to academic, technological, or scientific exchanges.
Through these surveys, we are getting to know different facets and dimensions of
the voice of the Latin American people, which is a step toward decoding the DNA
of integration in the region.
THE DNA OF REGIONAL INTEGRATION
12
THE DNA OF REGIONAL INTEGRATION
IN LATIN AMERICA
1. A SPACE FOR INTEGRATION
• Between 46% and 89% of the population support regional integration processes
• Some 77% of respondents were in favor of economic integration, while 60% supported political integration.
2. INTEGRATION + DEMOCRACY
• Countries which showed greater support for integration also showed greater support
for democracy.
• Countries which showed greater support for integration also showed higher levels
of trust in their government.
3. THE INTEGRATION GAP AND PUBLIC POLICIES
• Citizens of countries with less diversified export baskets demanded greater integration.
• Citizens of countries with fewer trade agreements demanded greater integration.
4. TWO-SPEED INTEGRATION
• Countries
that specialize in agricultural products demand economic integration more
than others.
• Some 71% of people believe that foreign investment is beneficial for their countries.
There is greater support for investment in agriculture and less for investment in financial services.
5. INTEGRATION HARDWARE
• Some 43% of Latin Americans believe that infrastructure is important for development.
• On a scale of 1 to 10, people’s willingness to pay taxes or take on loans to finance
better infrastructure was 3.8, on average.
6. INTEGRATION AND NATION BRANDING
• Sports, tourism, and food are the three mainstays of “brand Latin America.”
• The United States is the country where Latin Americans prefer to buy their
music, and food, and visit as tourists.
clothes,
7. INN-TEGRATION: INNOVATION + INTEGRATION
• Citizens of countries whose exports
tion more.
• Personal creativity and innovation
them more than 9 points out of 10.
have greater technology content value integrascore highly among
Latin Americans,
who gave
8. INTEGRATION AND SOLIDARITY
• Some 46%
of people are willing to pay more for products if the production process
respects workers’ rights.
• Countries
that are more tolerant toward immigration are more likely to demand that
labor standards be upheld.
9. GREEN INTEGRATION
• Some 49% of Latin Americans believe that the environment is important for development.
• In countries with the highest pollution levels, people are more willing to pay more for
environmentally friendly products.
10. POSTCONTAINER INTEGRATION
• Some 83% of Latin Americans think that some aspect of integration is important, be it
physical, environmental, labor-related, or technological.
• People’s willingness to pay more for environmentally and socially sustainable products is growing.
THE DNA OF REGIONAL INTEGRATION
13
OBJECTIVITY AND SUBJECTIVITY:
WHY WE CROSS-REFERENCED THE TABLES*
BACKGROUND
This study is the fruit of a strategic alliance between the Institute for the Integration of Latin America and the Caribbean (INTAL) and Latinobarómetro. It
compares the results from a 2016 opinion poll with trade and integration data
from the countries in the region.2
In so doing, we have moved forward with our work on this joint venture which
the countries in the region are directly involved in. The outcome is an RPG that
has brought together opinions from 18 countries in the region and creates studies that aim to satisfy the demand for information in the region.3
We first approached the issue through the Technical Note “Objective and Subjective Dimensions of Regional and Global Integration in Latin America,” which INTAL
published in March 2016 and which outlined some initial findings on the relationships between national and regional statistics and public opinions of integration.
By cross-referencing the tables containing information from national and regional statistics with a regional opinion barometer, we are innovating and beginning to gather and construct information that will help us better understand
our societies (Morlino 2011).4 This process will also improve our understanding
of the demand for integration in Latin America and the impact of public policies that seek to satisfy this demand, which will, in turn, enable policy makers
to fine-tune policy designs to ensure they lead to the desired outcomes.
In INTAL (2016), we argued that comparing data is a relatively novel feature in
undertaking integration studies, one that contrasts the economic variables that
states measure with citizens’ perceptions.
The aim of the partnership between INTAL and Latinobarómetro is to produce
an RPG that will provide close monitoring of Latin Americans’ opinions of topics that are key to regional integration. These range from how they perceive
each country’s integration strategy to be impacting employment or investment
to their willingness to finance integration infrastructure.
The member states took part in the process of drafting the opinion poll at
INTAL’s Summer Colloquium. It includes questions on citizens’ perceptions of
innovation and nation branding in addition to those on classic factors such as
investment, trade, and the environment, among others.5
The Continuous Monitoring System for Integration Processes (SEPI), which leverages Latinobarómetro’s indicator base and the databases run by INTAL, INTrade, INTAL Interactive, and COSIPLAN/IIRSA (regional infrastructure), will
now be complemented by a new online data visualization tool that is available
at www.iadb.org/intal/alianzalb (link in Spanish).
* The authors want to thank Antoni Estevadeordal, Marta Lagos, Alejandro Ramos Martínez, Carlos Scartascini,
Patricia Iannuzzi, Carlos D’Elía, Alejandra Wulff, Paula Alzualde, Pablo Valenzuela, and Andrea Pellegrino for
their contributions and Soledad Codoni, Lorena Miranda Gutiérrez, and Andrea Pereira Palacios for their research assistance. We are especially grateful to Ana Inés Basco for all her hard work coordinating the project
and as the RPGs Team Leader.
THE DNA OF REGIONAL INTEGRATION
14
There is no doubt that our societies are increasingly interested in integration
processes and the direct and indirect consequences of these. The Trans-Pacific
Partnership (TPP), the negotiations between the MERCOSUR and the European Union, or the possible expansion of the Pacific Alliance to include new
members are all issues that are attracting the attention of the average citizen,
pushing the integration agenda to the top of the list of public policy priorities.
Surveys first began to be used to better understand societies through public
opinion in the 1960s. Europeans were the first to carry out opinion polls on integration through the Eurobarometer program, which began in the 1970s. Latin
America took its first tentative steps in this direction with the Latinobarómetro
program between 1995 and 2015, at which point it expanded its analysis of Latin American integration by forming a partnership with INTAL.6
This paper aims to continue this work and contribute to creating a body of
knowledge that plays a significant part in the future of regional integration.
TECHNICAL DETAILS
In 2016, 20,204 face-to-face interviews were conducted using probability sampling. These were representative at the national level with an error margin of
between 2.8% and 3.1%, depending on the country. Between May 15 and June 15,
2016, 1,000 interviews were held in each country in Central America, and 1,200
in Mexico and South America (Argentina, Bolivia, Brazil, Colombia, Costa Rica,
Cuba, Chile, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras,
Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela).
The survey attempts to capture the population’s demand, hopes, and perceptions of the impact of integration. By “integration,” we mean a broad set of
processes that link the country in question with other countries in economic,
political, technological, and even cultural terms. The existence of these links is
explained by “a wide range of variables which include structural factors within
the different countries’ economies, shared historical traditions, and the propensity of these countries and their governments to create and build on these links,
which in the limited area of trade strategies may manifest themselves through
multilateral instruments for preferential trade agreements.”7
For the first time ever, this set of measurements taken by the INTAL/Latinobarómetro alliance has included specific questions on citizens’ perceptions of
innovation. By so doing, we have added a fifth dimension to the four existing
aspects of regional integration—the physical, commercial, environmental and
social aspects of integration and public perceptions of this. We have called this
fifth dimension “inn-tegration”: innovation + integration.
** In the coming months, we will expand on this report with additional analyses of the differences and similarities between the for regional blocs and the socio-economic status of the population (education, income level,
gender, and so on), among other issues.
THE DNA OF REGIONAL INTEGRATION
15
CONTINUOUS MONITORING SYSTEM
FOR INTEGRATION PROCESSES (SEPI)
INTEGRATION
AROUND TRADE,
INVESTMENT,
AND NATION
BRANDING
PHYSICAL
INTEGRATION
SEPI
INN-TEGRATION:
INNOVATION +
INTEGRATION
ENVIRONMENTAL
AND SOCIAL
INTEGRATION
PERCEPTIONS
OF INTEGRATION
Source: Compiled by authors.
THE DNA OF REGIONAL INTEGRATION
16
To measure citizens’ perceptions of innovation, we analyzed both the importance they place on creativity in different areas of economic life and their knowledge of potentially disruptive technologies (robotics, drones, driverless cars, and
so on).
We used the Pearson correlation to observe the connection between survey
data and national statistics, as this measures the linear relationship between
two random quantitative variables regardless of their scale.
The following table summarizes the data series used for each dimension and its
relationship with the survey questions.8
Tabla 1.
LAS DOS TABLAS:
OPINIÓN PÚBLICA Y ESTADÍSTICAS NACIONALES
ASPECT
INTAL/
LATINO
BARÓMETRO
NATIONAL
STATISTICS
TRADE
• How important is political and economic integration for development?
• What aspects of life does integration have an impact on?
• How much support is there for trade in goods and services?
• Share of exports covered by the five main products (%)
• Number of free trade agreements signed
• Average MFN tariff (%)
• Herfindahl-Hirschman Index of export concentration
INVESTMENT
• Which economies are most willing to receive foreign capital?
• What impact is integration perceived as having on investment?
• How important do citizens think foreign capital is and which sectors do they prefer it in?
• Exports per capita (thousands of US$)9
• Agriculture and fisheries as a percentage of GDP
• Foreign direct investment (% of GDP)
INFRASTRUCTURE
• How important do citizens think infrastructure is for development?
• How willing are they to pay to improve their infrastructure?
• Infrastructure competitiveness ranking
• Revenue from transportation, warehousing, and communication (US$ per capita)
THE DNA OF REGIONAL INTEGRATION
17
INNOVATION
• How important do citizens think innovation is for development?
• How important do citizens think creativity is in children’s education?
• How much do citizens know about new technologies and their potential impact?
• What should countries’ scientific innovation priorities be in the future?
• Research and development expenditure (% of GDP)
• Exports of high-technology products (% of exports of manufactured products)
• Fixed broadband internet subscribers (per hundred people)
NATION BRANDING
• What are the main features of Latin American countries in the eyes of the rest of the world?
• What country do citizens prefer the goods and services that they purchase to come
from?
• Revenue from international tourism (% of total exports)
• Homicide rate per 100,000 inhabitants
ENVIRONMENT
• How important do citizens think care for the environment is for development?
• How willing are citizens to pay more for products that respect workers’ rights?
• How will innovations impact energy-related matters?
• CO2 emissions per capita (tons per inhabitant)
• Carbon footprint (hectares per person)
• Use of alternative and nuclear energy (% of total energy use)
• Electricity production based on renewable sources, excluding hydropower (% of total)
SOCIAL INCLUSION
• How willing are citizens to pay more for products that respect workers’ rights?
• What impact is integration perceived as having on employment?
• How important do citizens think social policies are for development?
• Total immigrants from other countries in Latin America
• Index of restrictions on the movement of people and capital
• Gini coefficient
Source: Compiled by the authors.
The task at hand thus consists of comparing public opinion indicators with
national statistics to identify a degree of correlation which does not point to
a causal relationship but rather is a stylized fact. This suggests empirical relationships that must then be analyzed so that they can be of use to political and
social stakeholders and anyone with an interest in studying the development of
public policies on trade and integration.
THE DNA OF REGIONAL INTEGRATION
18
The indicators used in this exercise were selected based on three factors: first,
they needed to measure the same phenomenon for both aspects of the study
(public opinion and regional statistics); second, they had to be available for all
18 countries in the region included in this analysis at acceptable intervals and
be reasonably up to date; and third, the researchers’ own criteria. INTAL has
more than 50 years’ experience in the field of regional integration, and it has
drawn on this expertise to identify relevant indicators and data series that reflect dynamics that play a part in integration.
The statistics used in this study illustrate the capacity and willingness of the
countries in the region to make their economies more integrated and open
to the rest of the world. A lower average MFN tariff and the signing of free
trade agreements are evidence of a greater propensity to establish trade links
with other countries—that is, they are policy instruments that reflect countries’
decisions.10 Both the Herfindahl-Hirschman Index and the share of exports accounted for by the five main export products provide a measure of country’s
export diversification, the complexity of its export supply, and its capacity to
handle adverse trade circumstances.
By comparing actual investments received and exports per capita with how
people perceive foreign investment, we will be able to pinpoint the characteristics of those countries that value foreign capital most highly. We will look specifically at their features in terms of both trade and the structure of domestic
production, for which we use the data series on agriculture and fisheries as a
percentage of GDP, which also indicates the level of primarization of the economy. The share of foreign direct investment (FDI) in GDP indicates the intensity
with which the country facilitates the movement of foreign capital within its
own economy, in order to take advantage of foreign savings and capture the
benefits of technological innovations developed in other countries.11
We used two variables to examine infrastructure. The first of these is the World
Economic Forum’s infrastructure competitiveness ranking, which weights different variables related to the transportation of goods, the supply of electricity
services, and telecommunications. A higher ranking on this index implies that
local infrastructure is more competitive and thus that the country can integrate
more easily with the region and the world.12 We also evaluate revenue from
transportation, warehousing, and communication (US$ per capita), which we
use as a parameter for the importance of this sector within domestic economies.
In the chapter on innovation, we take up the analysis of the importance of
technological goods within export baskets that we began in INTAL (2016). This
indicator measures the “sophistication” or quality of commercial integration as
expressed by the country’s exports.13 The number of fixed broadband internet
subscribers (per hundred people) is the classic indicator of how integrated telecommunications are in local economies, based on the assumption that when
technology is more readily available it facilitates diverse aspects of integration,
THE DNA OF REGIONAL INTEGRATION
19
such as the possibility of doing e-commerce with customers and suppliers in
other countries. We have also added the classic measure of expenditure on
investment and development (R&D as a percentage of the GDP), a standard
measurement of the relative importance a given society places on innovation.
Nation branding is connected to the investment chapter and is fundamental
to the country’s position in competitive markets. Questions related to people’s
perceptions of this were compared with actual revenue from international tourism (as a percentage of total exports), one of the standards for investment attraction in Latin America and a core pillar of several economies in the region.
At the other extreme, one of the main factors crowding out investment is legal
insecurity and crime rates. We have compared this aspect of public perception
in each country with the actual per-capita homicide rate, one of the traditional
measures of crime.
To generate environmental metrics, we used carbon dioxide (CO2) emissions
per capita and carbon footprint (hectares per person), two standard objective
measures of commitment to the environment which we then cross-referenced
with willingness to take on integration commitments that include environmental components. In relation to energy, we looked at the use of alternative and
nuclear energy (as a percentage of total energy use) and electricity production based on renewable sources, excluding hydropower (percentage of total).
This is a fundamental issue, considering the commitments countries took on at
the COP21 Paris Summit in 2015 and the need to protect the environment by
using less polluting forms of energy. At present, nearly every trade agreement
includes a chapter on environmental sustainability, some based on green production standards and others on technology transfer in relation to new forms
of energy.
The same is true of the social dimension of integration, where chapters on migration and the movement of people have become just as important as those
on the movement of capital, or perhaps more so. In this section, we compare
variables such as the total migrants moving to other countries in Latin America
and an index of restrictions on the movement of people and capital with subjective demands relating to the rights of local and foreign workers. Finally, the
Gini coefficient provided indicators of the relationship between these demands
and income distribution, based on the assumption that when integration policies are effective, they should ultimately translate into increased equality and
social inclusion.14
We were particularly curious to discover how far these indicators are from citizens’ perceptions of public integration policies or policies that are somehow
connected to integration. These are the factors we have used to represent the
different dimensions of integration. This initial examination will point the way to
how we can continue to expand on these comparisons to gradually cover the
entirety of the complex phenomenon that is integration.
THE DNA OF REGIONAL INTEGRATION
20
HOW THE STUDY IS STRUCTURED
The multidimensional approach we have proposed here allows us to distinguish
how the two sources of data relate to one another, identify each country’s position in relation to the average regional values for each dimension of integration,
and design strategies to tackle demand or the absence of demand in relevant
public policy areas.
When cross-referencing different data sets, it is essential to bear the limitations of this exercise in mind and recognize where conclusions can be drawn
without pushing the data too far. We must not fall into the temptation of trying
to extract more information than the data itself has to offer, while also seeking convincing explanations of the relationship between these different dimensions. This is the only way that it will be possible to truly build on this exercise
to design public policies that take social demands into account and are then
assessed, calibrated, and corrected considering their impact on public opinion.
This study can be read on three levels. First, public opinion indicators. Second,
the comparison between these and national and regional statistics. Finally, a
series of boxes analyzes the current state of each facet of integration in the
region.
The next section looks at what “integration” means for Latin Americans. We
then focus on specific issues relating to economic and political integration,
trade, investment, infrastructure, innovation, nation branding, the environment,
and social inclusion.
The text closes with a series of records and results for each country that were
created based on the survey and in which the main results for each country are
compared to the regional average. The final pages of the contain conclusions
and point to future lines of research that may derive from it.
THE DNA OF REGIONAL INTEGRATION
21
WHAT DOES INTEGRATION
MEAN FOR LATIN AMERICANS?
THE RELATIONSHIP BETWEEN INTEGRATION AND DEVELOPMENT
Many countries in Latin America are currently actively negotiating integration
agreements either bilaterally or as part of their involvement in mega-agreements with other countries in the region or other regional blocs. The consequences of these agreements for domestic economies extend beyond trade
and have repercussions for the labor market, environmental protection policies, technology transfer, and investments in infrastructure, transportation, and
communications projects.
The proliferation of these agreements has meant that integration is no longer
merely a matter of tariffs but instead involves multiple dimensions. Integration
is becoming an increasingly dense issue because of these multiple interrelated
factors, which come hand-in-hand with new social demands.
How much do Latin Americans know about integration policies and the repercussions of these? As was the case in 2015, some 24% of Latin Americans
in 2016—that is, almost one out of every four people—argued that integration
with the region and the world is a key issue for development.
Figure 1.
KEY DEVELOPMENT ISSUES
Question: Which of the following topics are most important for development
in your country? Responses in percentages for the entire region.
24
SO
SO CIAL
AN CIAL PO
L
D
PO INC ICIE
VE LUS S,
RT
I
Y ON
,
DO NOT KNOW/
NO ANSWER
N
VATIO
INNO
N
IO N
AT IO
GR EG LD
TE R OR
IN HE W
T E
H TH
IT
W ND
A
H
CA UM
PI AN
TA
L
6
ND
TA
EN GE
M
ON CHAN
VIR
EN MATE
I
CL
51
24
25
GENDER
EQUALIT
Y
49
32
60
50
40
30
20
10
10
20
34
DUC
PRO
Source: Latinobarómetro 2016.
Multiple answer question, percentages add up to more than 100.
THE DNA OF REGIONAL INTEGRATION
50
35
39
43
60
EQ
OP UAL
FO PORT
RA
U
LL NITI
E
S
N,
TIO ,
TA
R
OR TE
SP WA TION E
R
AN Y,
A
TR ERG NIT CTU
EN D SA TRU
AN RAS
F
IN
TY
LI IC
UA UBL NS
Q P IO
F T
O ITU
ST
IN
40
46
RUL
EO
F LA
ENF AND L W
ORC
A
EME W
NT
TY
TIVI
30
22
This result points to a certain stability in how important people think integration
is. Topping the 2016 list of priorities are social policies, with 51% of mentions,
followed by the environment, with 49%. The 2015 list was the other way around,
with the environment ranking first, followed by social policies. The change in
2016 reflects a growing concern around social inclusion and poverty. One of the
main hard aspects of integration, physical infrastructure, ranks fourth, with 43%
of mentions. Interest in the latter has grown since 2015, when it only received
33% of mentions.
Figure 2.
KEY DEVELOPMENT ISSUES BY COUNTRY
Question: Which of the following topics are most important
for development in your country?
Answers by country for integration with the region and the world, innovation,
and transportation, water, energy, and sanitation infrastructure.
60%
50%
40%
30%
20%
10%
0%
S
E
Y
Y
R
U
A
A
A
A
A
A
O
R
IL
P.
IA
IA
UA TIN RIC DO DO UEL GUA HIL GU MB AM URA PER AL XIC LIV AZ RE
G
A
M
C
R
A
N
E
N
A
N
A
U
R
B
U
V
E
LO PA ND
M
TA
EZ
BO
TE
CA
UR RG OS SAL EC EN PAR
CA CO
UA
HO
NI
A
C
NI
I
V
G
L
M
E
DO
INTEGRATION WITH THE REGION AND THE WORLD
INNOVATION
TRANSPORTATION, WATER, ENERGY, AND SANITATION INFRASTRUCTURE
Source: Compiled by the authors using data from Latinobarómetro 2016
The answers by country show a correlation of 0.80 between answers for integration with the region and the world and the answers for innovation. This
means that countries rank the two issues roughly equally. The correlation between integration and infrastructure is 0.53—the average value for the latter is
systematically higher in all countries.
The contents of integration agreements and even the integration that goes on
outside of these agreements through exchanges between people and companies have shifted over the last 20 years. So, what does integration mean for
Latin Americans?
THE DNA OF REGIONAL INTEGRATION
23
THE FEATURES OF INTEGRATION
This year, most Latin Americans associated integration with traditional meanings.
The most frequently chosen option was “free trade,” which 56% of people selected, followed by “political dialogue,” with 41% of mentions. Options such as
the movement of people, investment promotion, and scientific exchange also
obtained 30% or more of responses, which shows that although the traditional
meaning of integration still ranks highest, a significant number of Latin Americans also recognize other aspects of integration.
Figure 3.
DEVELOPMENT-RELATED ISSUES
Question: Which of the following options do you think play a part in integration in Latin
America? Choose as many options as you like.
* Responses in percentages for the entire region.
F
TR REE
A
D
E
DO NOT KNOW/
NO ANSWER
AN
IC L
ER ICA Y
AM IT IT
L
N PO UN -VIS
TI
D
À
LA
S- RL
VI O RS
W WE
PO
13
21
56
SCIE
OR AC NTIFIC
ADE
EXCHA MIC
NGE
30
60
40
30
20
10
10
20
30
40
50
60
41
32
34
PO
DI LI
AL TIC
OG A
UE L
MOVEMENT
OF PEOPLE AND
WORKERS FROM
ONE COUNTRY
TO ANOTHER
N
IO L
OT NA N
OM TIO IG
PR NA RE ENT
O M
OF D F ST
AN NVE
I
50
Source: Compiled by the authors using data from Latinobarómetro 2016.
Multiple answer question, percentages add up to more than 100.
THE DNA OF REGIONAL INTEGRATION
24
Comparing the answers per country for the most frequently chosen options
reveals that mentions of “free trade” ranged between 39% and 65% depending
on the country: the association between integration and free trade was strongest in Paraguay and weakest in Brazil. Answers for “political dialogue” ranged
between 31% and 63%; the relationship was strongest in Venezuela and weakest
in Argentina and Peru.
Figure 4.
INTEGRATION-RELATED ISSUES
Question: Which of the following issues do you think are related to integration in
Latin America? Choose as many options as you like.
*Answers for free trade and political dialogue
70%
65
65
63
62 63
60%
61
60
59
58
58
39
42
41
35
34
30%
56
55
49
52
50
50%
40%
61
41
44
39
47
39
44 43
47
42
37
31
32
41
39
31
20%
10%
0%
S
E
Y
Y
R
U
A
A
A
A
A
R
O
P.
A
IA
IA
IL
UA RE HIL UEL GU MB DO AM RIC XIC GUA URA PER DO AL TIN LIV AZ
G
A O
C
A AN A
A EM EN
E
R
N
O
A
U
D
Z
R
U
V
B
L
M
A
B
T
R
L
P
G
ST
UR ON
NE ICA CO
EC
PA INIC
SA GUA AR
H
CO
VE N
L
M
E
DO
FREE TRADE
POLITICAL DIALOGUE
Source: Compiled by authors/Latinobarómetro 2016. Multiple answer question, percentages add up to more than 100.
Dialogue and trade are the two main features of a form of integration in which
migration-related issues also play a significant role, in third place. At the same
time, the idea that Latin America should come together to take on global
powers appealed to people much less than other integration options, and was
the least chosen category, with only 21% of mentions and great disparity in how
countries in the region reacted to it, with peaks of 36% in Uruguay and 27% in
Argentina and Venezuela.
THE DNA OF REGIONAL INTEGRATION
25
ECONOMIC AND POLITICAL INTEGRATION
THE TWO SIDES OF INTEGRATION
In a global context in which anti-integration trends seem to be on the rise,15
Latin America stands out for its widespread support for both economic and
political integration. Support for economic integration in the region was highest in Paraguay, where it reached 89%, and lowest in Guatemala, with 59%.
The values for political integration are somewhat lower, with a high of 76% in
Venezuela and a low of 46% in Mexico, although these are still surprisingly high
in the current global context.
Figure 5.
WIDESPREAD SUPPORT FOR INTEGRATION.
Question: Are you in favor or against the integration of your country
with other countries in the region?
* Responses in percentages for very in favor and somewhat in favor.
MU
MA
XI
MU
M
NI
MI
M
RE
G
AV IONA
ER
AG L
E
46
89
60
100 90 80 70 60 50 40 30 20 10
10 20 30 40 50 60 70 80 90 100
77
76
IM
AX
UM
REG
AVE IONAL
RAG
E
59
M
M
MINIMU
ECONOMIC INTEGRATION
POLITICAL INTEGRATION
Source: Compiled by the authors using data from Latinobarómetro 2016.
Political dialogue and trade in goods and services are other factors underpinning integration, which may lean more toward the economic or the political,
which is why one of the survey questions attempts to explore this difference.
THE DNA OF REGIONAL INTEGRATION
26
Figure 6.
OPINION OF ECONOMIC INTEGRATION.
Question: Are you in favor or against the integration of your country with other countries
in the region? Are you very in favor, somewhat in favor, somewhat against, or very against
economic integration?
NOT
DO W/
KNO NO
W ER
ANS
RESPONSES IN PERCENTAGES FOR
THE ENTIRE REGION
VE
A
SO GAIN RY
ME
WH ST/
AG
AIN AT
ST
/
RY OR AT
VE FAV WH
IN ME OR
SO FAV
IN
7
16
100 90 80 70 60 50 40 30 20 10
10 20 30 40 50 60 70 80 90 100
77
A
EL
ZU
VE
M
BR
UAY
A
IC
UA
TE
NE
G
URUG
ER
AM
AY
PARAGU
TIN
LA
RESPONSES FOR
“VERY IN FAVOR”
AND “SOMEWHAT
IN FAVOR” IN
PERCENTAGES
A
LA
89
77
AZ
IL
85
59
84
66
MEXICO
100 90 80 70 60 50 40 30 20 10
R
10 20 30 40 50 60 70 80 90 100
72
77
73
R
STA
CO
NIC
77
76
76
A
77
AR
AG
UA
77
BIA
ND
U
COLO
M
P.
RE
HO
A
N
A
IC
IN
IA
LIV
BO
PERU
RA
S
M
O
D
AM
N
PA
CHILE
78
71
ICA
INA
ENT
ARG
80
68
ADO
EL SALV
OR
D
UA
EC
87
Source: Compiled by the authors based on data from Latinobarómetro 2016.
Of the total for the region, 77% Latin Americans are in favor of economic integration while 16% are against this and 7% opted not to answer
THE DNA OF REGIONAL INTEGRATION
27
Figure 7.
OPINION OF ECONOMIC INTEGRATION BY
PRODUCTIVE SPECIALIZATION.
Responses in percentages
I
AZ
BR
C
L
RI
G
O
RE
A
66
MEXIC
U
LT
U
85
68
90 80 70 60 50 40 30 20 10
10 20 30 40 50 60 70 80 90
80
HYDR
OCAR
BONS
74
77
S
RAL
S
MINE METAL
AND
L
RACA
T
I
N R
CE ME
A
Source: Compiled by the authors using data from Latinobarómetro 2016.
Examining these responses in the light of each country’s productive specialization using the classifications from the Trade and Integration Monitor (IDB,
2015) reveals interesting results. The countries that specialize in agricultural
products (Argentina, Paraguay, and Uruguay) showed much higher average
levels of support for economic integration than the other countries—as high as
85%. In second place was the group of countries whose exports revolve heavily
around hydrocarbons (Bolivia, Colombia, Ecuador, and Venezuela), with average levels of 80%. Third were mineral and metal exporters (Peru and Chile) with
77%, followed by the countries of Central America (Costa Rica, El Salvador,
Honduras, Panama, Guatemala, and the Dominican Republic) with 74%. At the
bottom of the list are the region’s two biggest economies: Mexico, with 68%,
and Brazil, with 66%.16
Respondents tended to know the origin of the products they consume regularly, such as meat, wine, fish, coffee, and so on. In other words, they had considerable knowledge of the region through these products and these results
had a positive impact on their answers. For example, countries that specialize
in agricultural products and where citizens consume these products on a daily
basis are more inclined toward economic integration than countries that export
products that do not feature so heavily in people’s daily lives.
THE DNA OF REGIONAL INTEGRATION
28
Figure 8.
OPINION OF POLITICAL INTEGRATION
Question: Are you in favor or against the integration of your country with other countries
in the region? Are you very in favor, somewhat in favor, somewhat against, or very against
political integration?
T
NO /
DO OW
KN NO
ER
SW
AN
RESPONSES IN
PERCENTAGES FOR
THE ENTIRE REGION
VE
A
SO GAIN RY
ME
WH ST/
AG
AIN AT
ST
/
RY OR AT
VE FAV WH
IN ME OR
SO FAV
IN
11
29
100 90 80 70 60 50 4
40 30 20 10
10 20 30 40 50 60 70 80 90 100
60
CH
46 46
EL
U
60
G
AR
76
50
54
PARAGUAY
70
100 90 80 70 60 50 40 30 20 10
BRASIL
10 20 30 40 50 60 70 80 90 100
55
69
ECU
ADO
57
S
RA
65
61
61
IA
BIA
COLO
M
PE
UA
Y
A
GU
RA
CA
NI
using data from Latinobarómetro 2016.
UG
A
DOMINIC
REP.
Source: compiled by the authors
UR
64
RU
V
LI
BO
R
68
58
DU
N
HO
A
TIN
EN
72
52
R
EZ
N
49
ILE
LVAD
O
A
N AM
LATI
VE
CA
EL SA
MEXICO
ALA
MA
RI
TEM
GUA
NA
PA
CO
ST
A
ERIC
A
RESPONSES FOR
“VERY IN FAVOR”
AND “SOMEWHAT IN
FAVOR” IN %
N
Levels of agreement with political integration were lower, with 60% of mentions.
Levels of disagreement with political integration stood almost twice as high
as disagreement with economic integration, accounting for 29% of responses.
The countries that were most in favor of political integration were Venezuela
(76%), Argentina (72%), and Paraguay (70%), while Mexico and some countries
in Central America (Guatemala, Panama, and Costa Rica) were less in favor.
This supports the conclusions that can be drawn from the data presented
above, in the sense that people react to integration based on their day-to-day
experiences rather than in conceptual terms. People thus perceive economic
integration as being more distant than political integration.
THE DNA OF REGIONAL INTEGRATION
29
INTEGRATION AND INSTITUTIONS
Cross-referencing agreement with economic integration and support for democracy revealed high levels of correlation (0.74) between countries that support each factor. The correlation between support for economic integration
and trust in the government is also positive, standing at 0.34.17
Figure 9.
ECONOMIC INTEGRATION, SUPPORT FOR DEMOCRACY, AND LEVELS
OF TRUST IN THE GOVERNMENT
100%
89
90%
80%
70%
60%
71
68
66
40%
31
26
32
20%
10%
54
54
41
42
41
18
20
55
54
54
46
31
21
77
68
67
39
38
36
29
16
77
64
60
45
84
82
80
78
77
71
53
48
77
77
60
59
50%
30%
73
72
77
76
87
85
19
27
28
22
21
22
9
0%
S
E
U
A
A
A
A
A
O
R
P.
IL
IA
IA OR ELA AY AY ICA
AL AZ XIC DO RIC AM URA PER RE AGU LIV CHIL TIN MB
GU GU R
M
AD U
R
N
E
N
A
N
B
E
M
LO CU NEZ RU RA AME
A AR BO
TE
LV STA PA OND
G
C
O
A
U
A
E
C
I
C
S CO
PA IN
H
N NI
AR
VE
GU
T
MI
EL
LA
DO
PERCENTAGE OF THE POPULATION IN FAVOR OF THEIR COUNTRY INTEGRATING ECONOMICALLY WITH
OTHER COUNTRIES IN THE REGION
SUPPORT FOR DEMOCRACY
TRUST IN THE GOVERNMENT
Source: Compiled by the authors using data from Latinobarómetro 2016.
WHERE DOES INTEGRATION HAVE AN IMPACT?
All the governments in the region have international integration strategies,
although their policies in this regard may be more or less active. How do citizens perceive this strategy? Do they think it has had an impact on their lives?
Some 55% of the population of the entire region believes that their country has
attempted to integrate a lot or somewhat with the world. Some 36% believe
that it has attempted this a little or not at all.
The countries that most value their governments’ integration efforts are the
Dominican Republic (75%), Uruguay (72%), and Chile (71%).
THE DNA OF REGIONAL INTEGRATION
30
Figure 10.
PERCEPTIONS OF INTEGRATION WITH THE WORLD.
Question: How much do you think your country has attempted to integrate
with the rest of the world over the last five years?
DO NOT
KNOW/
NO
ANSWER
RESPONSES IN PERCENTAGES FOR THE ENTIRE
REGION
9
A LIT
TLE/
NOT
AT AL
L
/
AT
OT
A L EWH
M
SO
36
100 90 80 70 60 50 40 30 20 10
10 20 30 40 50 60 70 80 90 100
A
M
AL
A
ME
XIC
O
33
36
EL SA
55
75
72
71
100 90 80 70 60 50 40 30 20 10
10 20 30 40 50 60 70 80 90 100
43
65
44
ZIL
54
CA
INA
ARG
ENT
D
Y
UA
G
RA
N
BIA
61
PA
HO
59
I
TA R
COS
UR
A
S
BO
CO
LO
M
64
51
ECUADOR
A
NICARAGUA
65
49
I
LIV
MA
A
PAN
68
42
BRA
E
IL
CH
37
LVAD
OR
PERU
GUA
Y
EL
ZU
GU
AT
E
URU
NE
TI
LA
VE
RESPONSES FOR A
LOT/SOMEWHAT BY
COUNTRY IN %
M
NA
ER
DOMINICAN
REP.
ICA
55
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
31
The 43% of respondents who answered “a lot or somewhat” to the above question (on their country’s integration strategy over the last five years) claimed
that this integration strategy had had a positive impact on foreign investment
in the country, which was the most frequently chosen option. Next on the list
were employment and sources of work, and exports, which both received 40%
of positive mentions. Furthermore, almost one in every four Latin Americans
believed that the country’s integration strategy had had a positive impact on
access to technology (37%).18
Figure 11.
THE IMPACT OF INTEGRATION
Question: Which of the following areas do you think integration has had a positive impact on?
Answers by country for access to technology and exports.
F
IN OR
IN VE EIG
CO YO ST N
UN UR ME
NT
TR
Y
L OR
ONA LY
PERS FAMI ES
C
TAN
UMS
CIRC
EN
IZ IN Y
IT Y R
C RIT NT
U
C OU
SER C
U
O
Y
12
43
16
YOUR
COUNTRY’S
ACCESS TO
TECHNOLOGY
90 80 70 60 50 40 30 20 104
10 20 30
0 50 60 70 80 90
37
40
CO
U YO
EX NTR UR
AB POR Y’S
RO TS
AD
40
EM
SO PL
OF URCOYM
WO ES ENT
/
RK
Source: compiled by the authors using data from Latinobarómetro 2016.
Multiple answer question, percentages add up to more than 100.
THE DNA OF REGIONAL INTEGRATION
32
There was a broad dispersion in the distribution by country. For example, positive answers regarding the impact of integration on access to technology
peaked at 65% in Uruguay but stood at only 15% for Guatemala. The same is
true for other options. Sometimes there is a significant correlation in the percentage of answers for one option and another between countries: for example,
the correlation between the impact of integration on access to technology and
impact on exports is as high as 0.94, in other words, the difference from one
country to the next is relatively stable in terms of the factors people perceive
integrating as impacting, despite this being widely distributed. The greatest
impact by option and by country was in the Dominican Republic, where 78%
of respondents claimed that integration had a positive impact on employment.
Figure 12.
THE IMPACT OF INTEGRATION
Question: Which of the following areas do you think this had a positive impact on?
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
.
S
R CO LA
IL
IA
NA
ILE REP UAY MA DOR GUA UAY ICA BIA ERU RA
LA
TI RAZ LIV ADO EXI
A A
P DU
UE
G
A AG A R OM
CH N
MA
N
N
Z
U
O
R
B
U
E
V
E
A
M
B
L
N
G
PA EC ICA AR OST OL
NE
IC
UR
AT
P
SA
C
HO AR
IN
C
N
VE
L
GU
M
E
O
D
FOREIGN INVESTMENT
ACCESS TO TECHNOLOGY
EMPLOYMENT/SOURCES OF WORK
CITIZEN SECURITY
COUNTRY’S EXPORTS ABROAD
PERSONAL OR FAMILY CIRCUMSTANCES
Source: Compiled by the authors using data from Latinobarómetro 2016.
Multiple answer question, percentages add up to more than 100.
In relation to trade in goods and services, the share of Latin Americans who
were in favor of this remained stable in comparison with 2015 levels and stood
at 69% for the region as a whole. However, there were variations at the country
level that made up for one another in the regional average. Positive opinions
of trade increased in countries that were already more in favor of this: in Venezuela, these levels went from 72% to 89%, in Paraguay from 59% to 88%, and in
Nicaragua from 71% 84%. In contrast, there was a significant downturn in Brazil,
where these levels went from 78% in 2015 to 71% in 2016; in Peru, where they
went from 69% to 59%; and in the Dominican Republic, where they dropped
from 85% to 77%.
THE DNA OF REGIONAL INTEGRATION
33
Figure 13.
AGREEMENT WITH TRADE IN GOODS AND SERVICES
Question: Imagine that your country signs an integration agreement with other countries
in the region (Latin America and the Caribbean). Would you agree or disagree that
your country should be able to buy goods and services from any other country
in the region and that any other country should be able to sell goods and services
to your country?
Responses for “strongly agree” and “agree.”
2015
2016
2015
2016
69%
LATIN AMERICA
69%
78%
BRAZIL
71%
72%
VENEZUELA
89%
69%
COSTA RICA
63%
59%
PARAGUAY
88%
59%
HONDURAS
61%
71%
NICARAGUA
84%
62%
BOLIVIA
60%
75%
ECUADOR
82%
69%
PERU
59%
75%
URUGUAY
78%
64%
COLOMBIA
59%
85%
DOMINICAN REP.
77%
S/D
MEXICO*
59%
71%
ARGENTINA
75%
59%
PANAMA
59%
77%
CHILE
72%
64%
EL SALVADOR
57%
55%
GUATEMALA
52%
Source: Compiled by the authors using data from Latinobarómetro 2016.
Note: *No data were available for Mexico for 2015.
INTEGRATION AND EXPORT DIVERSIFICATION
Comparing opinion data and real economic variables allowed us to identify
relationships between these two aspects of integration. In this case, we compared the proportion of the population that supports economic integration with
the degree of the country’s export diversification, which we measured through
the share of exports that are covered by the five main export products and the
Herfindahl-Hirschman Index (HHI).19
The correlation between these variables was positive: 0.69 in the first case and
0.48 for the HHI per product. This means that those societies demanding greater economic integration tend to have more diversified exports, as is the case
in Paraguay, Venezuela, and Ecuador. 20
THE DNA OF REGIONAL INTEGRATION
34
Figure 14.
AGREEMENT WITH ECONOMIC INTEGRATION
AND EXPORT DIVERSIFICATION
0,70
0,61
100% 89
0,60
87
85
84
82
80
80%
60%
77
77
77
77
76
73
0,50
72
71
68
66
59
0,10
0,15
0,05
0,05
0,40
0,30
0,21
0,17
0,13
40%
78
0,04 0,05
0,08 0,07 0,04 0,03
0,02
0,01 0,03 0,02
20%
0%
Y
R
A
Y
IA INA ILE VIA UA EP.
RU AS MA ICA OR ICO ZIL ALA
I
UA UA UEL DO MB
R
G
H
PE DUR NA A R
G
G
A
AD MEX BRA EM
NT C OL RA AN
O
Z
A
U
U
E
L
E
B
R
N
PA ST ALV
G
AT
EC CO
CA NIC
O
UR EN
R
I
O
PA
S
H
A
N MI
V
C EL
GU
DO
0,20
0,10
0
-0,10
PERCENTAGE OF THE POPULATION IN FAVOR OF THEIR COUNTRY INTEGRATING ECONOMICALLY WITH OTHER
COUNTRIES IN THE REGION
SHARE OF EXPORTS COVERED BY THE FIVE MAIN PRODUCTS (%)
RIGHT AXIS: HERFINDAHL-HIRSCHMAN EXPORT CONCENTRATION INDEX
Source: Compiled by the authors using data from Latinobarómetro 2016 and INTRADEBID.
INTEGRATION AND TARIFF POLICY
Comparing support for integration with MFN tariffs reveals that the countries
that most support political integration have the highest tariffs: there is a positive correlation of 0.56 between the two variables. The conclusions reached
in INTAL (2016) therefore still hold true: when we compared tariff policy with
people’s overall opinions of integration, we also concluded that “countries with
the highest levels of trade protection (above-average foreign tariffs) believe
integration to be a priority.”
THE DNA OF REGIONAL INTEGRATION
35
Figure 15.
AGREEMENT WITH POLITICAL INTEGRATION AND TARIFFS
90%
80%
70%
60%
50% 46
49
46
55
54
52
50
65
64
61
61
58
57
76
72
70
69
68
40%
30%
20%
10%
6
6
8
6
6
6
11
6
11
3
7
7
6
9
10
16
12
9
0%
.
L
S
CO LA MA ICA HILE DOR AZI RA IVIA ERU BIA REP GUA UAY DOR UAY INA ELA
T
R C
XI MA NA
M N
L
P
U
U
A UG UA AG
A
R
E
O
O
A
D
B N
EN EZ
A AR
L
M TE PA ST
LV
B
R EC AR
C
G
O
N
A
I
U
A
C
O
R
I
C
S
O
E
P
N
U
H
I
A
C
N
V
G
M
EL
DO
PERCENTAGE OF THE POPULATION IN FAVOR OF THEIR COUNTRY INTEGRATING ECONOMICALLY WITH
OTHER COUNTRIES IN THE REGION
AVERAGE MFN TARIFF (%)
Source: compiled by the authors using data from Latinobarómetro 2016 and INTRADEBID.
CURRENT NEGOTIATIONS
Latin America and the Caribbean has a long history of involvement in integration processes. The region has made many forays into different forms of integration of varying levels of depth. These experiences are vast and include multilateral and regional agreements; arrangements that are already in force and
others that are being negotiated; customs unions and free trade agreements;
and treaties with political, economic, commercial, or physical integration objectives. According to the Legal Instruments of Integration (IJI) database, in 2015
the countries of Latin America had 40 negotiations underway, of which the
Pacific Alliance is the only one seeking to form part of a mega-agreement, in
this case involving other Pacific rim countries. The United States and the European Union have traditionally been the region’s main trading partners. However,
signing integration agreements has helped Latin American economies diversify their trade not only in terms of their partners but also in terms of how this
breaks down by product. Although intraregional trade between Latin American
blocs is low in comparison with other integration schemes outside the region,
manufactures account for a higher relative share of this trade than in exports to
the rest of the world.
Source: INTAL Interactive No Borders / Integrated / Partners/ Horizontal Trading / Between Us / Mega-Regionalism
THE DNA OF REGIONAL INTEGRATION
36
EXPORT CONCENTRATION:
PRODUCTS AND DESTINATION MARKETS
The main determinants of the scale of an economy’s export basket are its pattern of productive specialization; income per capita; the absolute scale of its economy; factor endowment; closeness to its main foreign destination markets; innovation capacity; infrastructure; and trade policy, among others. There is great variation among the countries of
Latin America in these determinants of export diversification and notable differences in
the degree of diversification of each country’s export supply. In other words, there is significant variation between subregions in relation to how concentrated their exports are, as
measured using the Herfindahl-Hirschman Index (HII). This measure of export concentration ranges from 0 to 1: the higher the value, the more concentrated exports are. This is
true for both export products and trading partners.
A. DIVERSIFICATION BY PRODUCT
B. DIVERSIFICATION BY DESTINATION MARKET
SOUTH AMERICA
CENTRAL AMERICA
SOUTH AMERICA
VEN
GTM
MEX
SLV
NIC
DOM
CRI
PAN
HND
BRA
ARG
URY
PER
CHL
PRY
COL
BOL
ECU
VEN
GTM
2010
2015/2004(*)
MEX
SLV
NIC
DOM
PAN
HND
BRA
ARG
URY
PER
CHL
PRY
COL
BOL
ECU
0,60
0,50
0,40
0,30
0,20
0,10
0
CRI
2010
2015/2004(*)
CENTRAL AMERICA
Source: Compiled by the authors using data from INTRADEBID. Note: * Data for Nicaragua and Venezuela is from 2014.
In general terms, countries with export baskets that include a greater share of manufactures (Mexico and Central America) have more diverse export supply in terms of products
than the countries of South America, where unprocessed primary goods or manufactures
of agricultural/mineral/metal origin account for a greater share of the export basket (Figure a). The main determinants of the result for product diversification are specialization
pattern, factor endowment, and trade and FDI policy (including, for example, some special
trade regimes). In contrast, when we assessed export diversification by destination market,
we found South American countries’ baskets to be more diversified than those of Mexico
and Central America (Figure b). In this case, greater physical proximity to the United States
and the network of trade agreements between these countries has led to greater concentration of the export basket to this destination, which is the region’s main trading partner.
Since 2010, when commodity prices reached an all-time high, adverse economic times
have affected the region’s economies to different degrees. In Argentina, Uruguay, Bolivia,
Colombia, and the Dominican Republic, concentration by product increased in 2015 in
comparison with 2010. However, the drop in sales of certain products (probably manufactures) was made up for by sales to new markets, and diversification by destination market
has improved. Venezuela is the only country that has not managed to counterbalance this
increased concentration in terms of products with new destination markets. In contrast, in
2015, other countries such as Ecuador, Chile, Peru, Brazil, Costa Rica, Honduras, and Mexico were able to export a greater variety of products (improved export diversification by
product) but to fewer markets (worse diversification by destination market). Despite the
unfavorable context, a third group has been able to improve its diversification in terms of
both products and destination markets—Paraguay, Panama, Nicaragua, El Salvador, and
Guatemala.
This is a vital issue as trade promotion and facilitation policies contribute to export diversification and help reduce the impact of an unfavorable context when there is a change in
the international trade cycle.
THE DNA OF REGIONAL INTEGRATION
37
INTEGRATION AND TRADE AGREEMENTS
Is the number of trade agreements that a country signs related to how its population perceives integration? To answer this question, we compared the proportion of the population that is in favor of economic and political integration
with the number of free trade agreements (FTAs) each country has signed. In
2016, this revealed a negative correlation of -0.67 between the number of FTAs
and support for political integration, which dropped to -0.41 for support for
economic integration. This means that there is greater demand for integration
in countries that have signed fewer FTAs.
Figure 16.
AGREEMENT WITH INTEGRATION AND TRADE AGREEMENTS
19
100%
20
90%
18
80%
13
12
70%
14
11
60%
9
9
50%
7
8
7
8
40%
10%
0%
12
10
8
30%
20%
16
6
3
2
1
4
1
1
1
0
0
2
0
.
LA NA AY OR AY
UA EP BIA ERU IVIA RAS AZIL DOR HILE ICA MA ALA ICO
P OL
UE NTI AGU AD UGU AG N R OM
U R
C A R ANA EM EX
A
Z
M
E GE
B
R ECU UR
ND B ALV
AR ICA OL
P
ST
N
AT
A
C
O
C
P
S
H
CO
NI MIN
VE AR
GU
L
E
DO
PERCENTAGE OF THE POPULATION IN FAVOR OF THEIR COUNTRY INTEGRATING POLITICALLY WITH OTHER
COUNTRIES IN THE REGION
PERCENTAGE OF THE POPULATION IN FAVOR OF THEIR COUNTRY INTEGRATING ECONOMICALLY WITH OTHER
COUNTRIES IN THE REGION
RIGHT AXIS: NUMBER OF FTAS SIGNED
Source: Compiled by the authors using data from Latinobarómetro 2016.
In INTAL (2016) we used the results from the 2015 survey to analyze the correlation between the openness of the economy and demand for integration, and
found a negative relationship between the two, in that countries with lower
openness coefficients were where demand for integration was greater.
THE DNA OF REGIONAL INTEGRATION
38
INVESTMENT.
HOW IMPORTANT DO CITIZENS THINK FOREIGN CAPITAL IS?
OPINIONS OF FOREIGN INVESTMENT
In a global context of low interest rates, Latin America offers a range of investment opportunities for capitals that are willing to take a gamble on the region.
How do Latin Americans perceive the arrival of these capitals? Do they think
that foreign investment is beneficial or harmful for development? As is the
case with integration, support for investment is very high among the region’s
citizens. Some 71% of Latin Americans say that foreign capital is beneficial for
local economies, while only 15% believe it to be harmful. Over the last 20 years
there has been a decrease in the proportion of the population that rejects foreign investment. This peaked at 20% in 1998, but the share of those who believe
it to be beneficial has gradually increased. However, the share of the population
that would rather not give an opinion on the matter has increased from 10% in
1998 to 14% in 2016.
Figure 17.
OPINION OF FOREIGN INVESTMENT
Question: Do you think that, in general terms, foreign investment is beneficial or
harmful to the economic development of your country or are you not familiar enough
with the issue to give an opinion?
18
20
13
1995
10
1998
14
BOLIV
SIL
RA
EZU
65
AM
UG
UA
Y
71
OR
AD
LV
SA
PA
N
UR
71
68
A
E
68
CH
IL
VEN
74
ICA
TA R
COS
Source: Compiled by the authors using data from Latinobarómetro 2016.
R
81
PERU
DO NOT
KNOW/
NO ANSWER
O
63
EL
HARMFUL
10 20 30 40 50 60 70 80 90 100
63
2016
A
NICARAGU
83
62
100 90 80 70 60 50 40 30 20 10
IA
Looking at responses by sector, foreign investment is more welcome if it targets the production of primary goods. Some 46% of respondents think that it is
positive for there to be foreign capital in the agricultural sector, 35% in chemicals and medicines, and 30% in energy and water services and the automotive
industry.
THE DNA OF REGIONAL INTEGRATION
S
RA
DU
N
HO
83
B
BENEFICIAL
84
61
20
MEXICO
85
55
INA
15
87
55
ENT
30
ANA
REP
.
ARG
LA
EC
UA
D
ICA
71
MA
40
0
IA
B
GU
AT
E
50
10
M
LO
CO
60
ER
70
INIC
71
PARAGUAY
70
AM
69
TIN
LA
80
ANSWERS FOR BENEFICIAL BY COUNTRY
IN %
DOM
RESPONSES IN PERCENTAGES FOR THE
ENTIRE REGION
39
ELA
Figure 18
SECTOR-SPECIFIC OPINIONS OF FOREIGN CAPITAL
AG
IND RIC
US ULT
TR UR
Y
AL
E
NON
L
IA S
NC ICE S)
NA V K
FI SER AN
(B
E
APLECT
PL RI
IA CA
NC L
ES
/
DO NOT KNOW
NO ANSWER
Question: Which of the following industries
do you think benefit from receiving foreign capital?
6 8
46
23
24
CHEMICALS
INES
AND MEDIC
35
ICATIONS
TELECOMMUNSE
RVICES
50
40
30
20
10
10
20
30
40
50
25
30
26
S
IC
N TRY
ROUS
CTND
E
L I
28
30
E
W NER
AT GY
ER A
SE ND
RV
IC
ES
ING
MIN
TIVE
OMO
AUTUSTRY
IND
E
Source: Compiled by authors/Latinobarómetro 2016. Multiple answer question, percentages add up to more than 100.
In relation to the agricultural sector, which was the most frequently selected
option, Venezuela was the country that was most in favor of receiving foreign
capital, with 63% support ratings, followed by Nicaragua with 60%, and Ecuador with 58%. Those that were most reluctant to receive such investment include four Southern Cone countries: Brazil (36%), Uruguay (38%), Chile (25%),
and Argentina (19%). The population often tends to show greater support for
foreign investment in those sectors that are most competitive and play a leading role in their respective economies. This is the case for telecommunications
in Costa Rica, for the automotive industry in Brazil, and the mining industry in
Peru. However, this rule is not always true: in Argentina, which has low acceptance rates for foreign investment in four of the nine sectors, support for foreign capital in the agricultural industry is low despite this sector’s importance
in the country’s economy.
THE DNA OF REGIONAL INTEGRATION
40
Figure 19.
SECTOR-SPECIFIC OPINIONS OF FOREIGN CAPITAL
QUESTION: WHICH OF THE FOLLOWING INDUSTRIES DO YOU THINK BENEFIT
FROM RECEIVING FOREIGN CAPITAL?
AGRICULTURAL
INDUSTRY
VENEZUELA
NICARAGUA
ECUADOR
COLOMBIA
HONDURAS
EL SALVADOR
COSTA RICA
DOMINICAN REP.
PANAMA
PARAGUAY
PERU
BOLIVIA
GUATEMALA
MEXICO
URUGUAY
BRAZIL
CHILE
ARGENTINA
63%
60%
58%
55%
54%
54%
53%
52%
50%
50%
48%
43%
42%
39%
38%
36%
25%
19%
CHEMICALS AND
MEDICINES
VENEZUELA
URUGUAY
COSTA RICA
COLOMBIA
ECUADOR
EL SALVADOR
PANAMA
GUATEMALA
DOMINICAN REP.
PARAGUAY
NICARAGUA
MEXICO
CHILE
BRAZIL
PERU
HONDURAS
BOLIVIA
ARGENTINA
AUTOMOTIVE INDUSTRY
MINING
VENEZUELA
URUGUAY
ECUADOR
BRAZIL
COSTA RICA
CHILE
ARGENTINA
EL SALVADOR
PARAGUAY
MEXICO
COLOMBIA
DOMINICAN REP.
NICARAGUA
PANAMA
PERU
BOLIVIA
HONDURAS
GUATEMALA
PERU
VENEZUELA
DOMINICAN REP.
NICARAGUA
ECUADOR
BOLIVIA
CHILE
URUGUAY
HONDURAS
MEXICO
PANAMA
BRAZIL
COLOMBIA
EL SALVADOR
COSTA RICA
GUATEMALA
PARAGUAY
ARGENTINA
45%
41%
38%
37%
36%
35%
31%
30%
30%
28%
27%
27%
24%
21%
20%
20%
19%
17%
THE DNA OF REGIONAL INTEGRATION
60%
45%
43%
40%
39%
39%
36%
36%
33%
33%
30%
30%
29%
29%
27%
26%
25%
25%
ENERGY AND
WATER SERVICES
DOMINICAN REP.
GUATEMALA
NICARAGUA
EL SALVADOR
PANAMA
VENEZUELA
ECUADOR
COSTA RICA
COLOMBIA
PARAGUAY
HONDURAS
MEXICO
URUGUAY
PERU
BRAZIL
BOLIVIA
ARGENTINA
CHILE
45%
40%
39%
38%
38%
37%
35%
35%
31%
31%
31%
30%
27%
26%
22%
21%
17%
15%
ELECTRONICS INDUSTRY
42%
41%
36%
35%
35%
33%
31%
28%
28%
27%
26%
26%
23%
22%
21%
20%
18%
13%
COSTA RICA
VENEZUELA
DOMINICAN REP.
ECUADOR
EL SALVADOR
ARGENTINA
URUGUAY
NICARAGUA
CHILE
PANAMA
BRAZIL
COLOMBIA
HONDURAS
MEXICO
GUATEMALA
PARAGUAY
PERU
BOLIVIA
39%
32%
32%
31%
30%
30%
29%
29%
27%
25%
25%
21%
21%
20%
20%
19%
19%
16%
41
TELECOMMUNICATIONS
SERVICES
40%
VENEZUELA
39%
COSTA RICA
29%
URUGUAY
29%
ECUADOR
28%
EL SALVADOR
27%
PARAGUAY
26%
COLOMBIA
25%
NICARAGUA
25%
PANAMA
23%
MEXICO
23%
BRAZIL
21%
PERU
21%
CHILE
20%
GUATEMALA
18%
BOLIVIA
18%
ARGENTINA
17%
DOMINICAN REP.
17%
HONDURAS
ELECTRICAL APPLIANCES
VENEZUELA
COSTA RICA
ECUADOR
CHILE
DOMINICAN REP.
EL SALVADOR
ARGENTINA
COLOMBIA
NICARAGUA
URUGUAY
PANAMA
MEXICO
PARAGUAY
PERU
BRAZIL
GUATEMALA
HONDURAS
BOLIVIA
42%
30%
30%
29%
27%
25%
24%
24%
24%
24%
23%
23%
20%
18%
17%
17%
16%
16%
FINANCIAL SERVICES
(BANKS)
36%
COSTA RICA
33%
EL SALVADOR
29%
URUGUAY
26%
GUATEMALA
26%
VENEZUELA
26%
NICARAGUA
26%
ECUADOR
25%
PANAMA
24%
BRAZIL
24%
COLOMBIA
24%
HONDURAS
23%
PARAGUAY
23%
PERU
18%
CHILE
17%
MEXICO
16%
DOMINICAN REP.
15%
BOLIVIA
13%
ARGENTINA
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE ECONOMIES THAT ARE MOST OPEN TO RECEIVING CAPITAL
Featuring in 32% of responses at the regional level, the promotion of domestic
and foreign investment was one of the issues that respondents most connected
with integration (after free trade, political dialogue, and the movement of people). Which economies rate investment promotion most highly? Ecuador, Uruguay, Paraguay, and Chile, where more than 35% of citizens made a connection
between integration and the promotion of domestic and foreign investment.
Cross-referencing objective and subjective indicators reveals that these economies are also the ones with the highest levels of exports per inhabitant as there
is an empirical correlation of 0.63 between mentions of investment promotion
as a distinctive feature of integration and export capacity.
THE DNA OF REGIONAL INTEGRATION
42
Figure 20.
IMPORTANCE PLACED ON INVESTMENT PROMOTION AS A FEATURE
OF INTEGRATION AND EXPORTS PER CAPITA
Question: Which of the following factors do you think play a part in integration in Latin
America? Responses for investment promotion.
50%
4500
4190
45%
40%
3325
35%
3500
3055
2705
30%
2313
25%
15%
1125
549
686
936
830
5%
1146
876
1147
1214
1397
2000
1606
1500
1000
216
500
0%
0
.
AS ZIL LA OR MA EP VIA UA BIA ICO ICA INA ERU ELA ILE UAY OR UAY
P
UR RA EMA VAD NA N R OLI RAG OM EX A R NT
U
CH AG UAD UG
D
B T
M
T GE
EZ
B
L
R EC UR
N
A OL
PA ICA
S
N
A
A
C
O
R
I
O
C
PA
H
IN
A
C
N
VE
GU EL S
M
DO
PERCENTAGE OF THE POPULATION THAT ASSOCIATES INTEGRATION IN LATIN AMERICA WITH THE PROMOTION OF NATIONAL AND FOREIGN INVESTMENT
RIGHT AXIS: EXPORTS PER CAPITAL (THOUSANDS OF US$)
Source: Compiled by the authors using data from Latinobarómetro 2016.
FOREIGN DIRECT INVESTMENT IN LATIN AMERICA:
EVOLUTION AND ORIGINS
In a context in which international investment flows grew by 36%, in 2015,
Latin America and the Caribbean’s attractiveness as recipients of FDI dropped
by 9%, with total inflow reaching around US$168 billion. This performance
was the outcome of reduced investment in natural resource–related sectors,
mainly mining anda hydrocarbons, and the downturn in the region’s economic
growth, particularly that of Brazil.
THE DNA OF REGIONAL INTEGRATION
3000
2500
1628
20%
10%
4000
43
Figure a. FDI INFLOW 1991–2015
120
250.000
100
200.000
80
60
150.000
40
20
100.000
0
-20
50.000
-40
-60
0
1991 1993
1995
1997
1999
2001
2003
2005
2007
2009
2011 2013 2015
FDI INFLOW (MILLIONS OF US$)
RIGHT AXIS: FDI INFLOW, YEAR-ON-YEAR GROWTH RATE IN %
Figure b. COMPOSITION OF FDI IN LATIN AMERICA BY ORIGIN*
3
4 3
31
28
15
16
THE UNITED STATES
NETHERLANDS
SPAIM
CANADA
EUROPEAN COUNTRIES
CANADA
JAPAN
OTHER
* Note: calculation based on the total countries for which information was available in 2014, which accounts for 73% of FDI.
Source: UNCTAD.
FDI inflows in Brazil dropped 23% in 2015 due to the country’s economic recession, however, it is still the main recipient of FDI in the region and accounts for
almost 40% of total investment (equivalent to US$65 billion). In contrast, the
region’s second largest economy, Mexico, saw an 18% increase in FDI inflows,
fundamentally in the automotive industry and the telecommunication sector.
The slump in mineral prices affected FDI inflows in Chile and Colombia, which
dropped by 8% and 26%, respectively, in 2015.
In Argentina, there was a notable increase (130%) in FDI due to the inclusion
of flows related to the nationalization of the petroleum firm YPF in 2012. Leaving out this particular operation, the levels would be similar to those of 2014.
In Central America, Panama continues to be the main recipient of FDI, accounting for over 40% of the subregion’s inflows. Other major recipients are
Costa Rica (26%), Honduras (10%), and Guatemala (10%). FDI in the Caribbean
dropped by 17%.
Looking at inflows by sector, while FDI in natural resources became less significant, the importance of the service sector grew, fundamentally in telecommunications, renewable energies, and the retail trade. In Chile and Central
America, increased investment in renewable energies is prompting a change
in their energy mixes.
The United States continues to be the main source of investment in the region
(around 30%); however, it plays a greater role in Mexico, Central America, and
the Caribbean, where it accounts for more than half of all foreign investment.
Other major sources of FDI include the Netherlands (16%)—although this is
largely accounted for by multinational firms that are based there to take advantage of tax benefits—and Spain (15%).
THE DNA OF REGIONAL INTEGRATION
44
The agricultural industry was the sector in which respondents indicated FDI to
be most welcome. Is there greater support for FDI in economies that specialize in the production of primary goods? Indeed, economies where the share
of agriculture is greatest are also those that consider foreign investment to
be beneficial, with a positive correlation of 0.44. This is the case for Paraguay,
where 87% of respondents said that FDI was beneficial and where the share of
the agricultural and fishery sector is highest in the region, accounting for 21%
of GDP.
Figure 21.
IMPORTANCE OF FOREIGN INVESTMENT
AND PRIMARY PRODUCTION
100%
25%
90%
80%
21
70%
21
60%
15%
50%
40%
10%
13
12
11
30%
20%
20%
11
8
7
6
6
3
5
3
10%
9
8
5
6
5%
3
0
0%
.
L
E
A
A
A
A
A
O
OR UAY ELA GUA RAS DOR REP UAY
BI ALA TIN XIC IVI AZI HIL AM
IC
D
R
M
L
U
U
G
G
C
A
A
A
N
N
BR
LO TEM EN ME BO
TA
LV RU
EZ AR ND CU ICA RA
PA
E IN
CO UA ARG
OS L SA U VEN NIC HO
PA
C
G
M
E
O
D
PERCENTAGE OF THE POPULATION THAT BELIEVES THAT FOREIGN INVESTMENT IS BENEFICIAL FOR THEIR
COUNTRY
RIGHT AXIS: AGRICULTURE AND FISHERIES AS A PERCENTAGE OF GDP
Source: Compiled by the authors using data from Latinobarómetro 2016. 21
Another way of identifying how the population perceives the effect of investments is by comparing actual foreign investments with perceptions of the impact of integration strategies on amounts of capital received. The correlation
is also positive in this instance and stands at 0.64. The countries that most
perceive the impact of integration on investment are also those attracted the
greatest capital inflows.
THE DNA OF REGIONAL INTEGRATION
45
Figure 22.
PERCEPTION OF THE IMPACT OF INTEGRATION
ON INVESTMENT AND ACTUAL INVESTMENT RECEIVED
40%
12
10
30%
9,7
20%
7,5
6,7
4,3
2,0
2,0
0%
3,9
0,7
0,8
0,2
0,9
1,7
8
6
6,2
4,0
10%
8,6
3,7
4
4,2
2,0
2
0
S
E
R
Y
U
A
A
P.
O
IL
A
IA
IA ICA AY UA OR MA
U
UA RE HIL
AL UEL XIC DO LIV RAZ TIN URA PER MB
G
D
A
R
G
G
M
C
A
A
A
N
E V
N
N
O
O
A
Z
A
D
U
E
B
R
U
E
A
A
M
L
T R
L
B
P
A EC
G ON
AT NE
UR NIC
CO COS PA NIC
SA
AR H
GU VE
MI
EL
DO
PERCENTAGE OF THE POPULATION THAT BELIEVES THAT ITS COUNTRY’S INTEGRATION STRATEGY HAS
HAD A POSITIVE IMPACT ON FOREIGN INVESTMENT
RIGHT AXIS: FOREIGN DIRECT INVESTMENT (% OF GDP)
RIGHT AXIS: LINEAR TREND (FOREIGN DIRECT INVESTMENT AS % OF GDP)
Source: Compiled by the authors using data from Latinobarómetro 2016
Two paradigmatic examples of this are Chile and Panama, the countries that
received most foreign investment in relation to their GDP and where perceptions of the impact of integration on investment also outstripped the regional
average. At the other extreme, the levels of perception of the impact of integration on foreign investment were lower in countries that received little foreign
capital, such as Guatemala, Venezuela, Mexico, and El Salvador.
In line with these results, respondents in countries with fewer restrictions on
capital flows and the movement of people believed that their country’s integration strategy had a positive impact on investment, with a correlation of 0.54.
THE DNA OF REGIONAL INTEGRATION
46
Figure 23.
PERCEPTION OF THE IMPACT OF INTEGRATION ON INVESTMENT
AND ACTUAL INVESTMENT RECEIVED
10
40%
35%
30%
8
7,2
7,0
25%
4,7
5,9
5,1
15%
4,7
4,6
5,1
4,9
7
6,9
6,9
6,3
20%
10%
9
8,8
6,0
5,8
5,1
3,4
2,8
6
5
4
3
2
5%
1
0%
0
S
E
R
Y
U
A
A
P.
O
IL
A
IA
IA ICA AY UA OR MA
UA RE HIL
AL UEL XIC DO LIV RAZ TIN URA PER MB
R GU AG AD NA
G
M
C
A
E
N
N
O
O
A
Z
A
D
U
E
V
B
R
U
E
A
A
M
L
T
L
B
R
P
A EC
G ON
AT NE
UR NIC
CO COS PA NIC
SA
AR H
GU VE
MI
EL
DO
PERCENTAGE OF THE POPULATION THAT BELIEVES THAT ITS COUNTRY’S INTEGRATION STRATEGY HAS
HAD A POSITIVE IMPACT ON FOREIGN INVESTMENT
RIGHT AXIS: INDEX OF RESTRICTIONS ON THE MOVEMENT OF PEOPLE AND CAPITAL
RIGHT AXIS: LINEAR TREND (INDEX OF RESTRICTIONS ON THE MOVEMENT OF PEOPLE AND CAPITAL)
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
47
MULTILATINAS. LATIN AMERICAN COMPANIES THAT INVEST
The presence of Multilatinas within the global economy has grown considerably. Against
the backdrop of globalization and structural reforms, many large firms that originated in
Argentina, Brazil, Chile, and Mexico adopted more aggressive internationalization strategies
during the 1990s. The new global context has increased the need for internationalization
among firms in a growing number of sectors if they are to survive and expand. Investing
abroad has also become inevitable if firms are to improve their competitive positions, as this
process allows them to reach new markets and improve their technological, productive, and
commercial knowledge.
The globalization of the Multilatinas continued to expand during the 2000s, when companies from Colombia and Peru gave new impetus to this trend. The process implied these
firms developing new management capacities around production processes, technology,
quality control, organization, and commercial and financial aspects.
However, after suffering the effects of the global financial crisis of 2008–2009 and managing
to bounce back over the next two years, from 2012 onwards, flows of FDI began to slow due
to the downturn in regional growth and changes to the international commodity markets in
which most Multilatinas were operating.
Figure a.
EVOLUTION OF FDI FLOWS FROM LATIN AMERICA
AND THE CARIBBEAN ABROAD. 1991-2015.
400
60.000
350
50.000
300
250
40.000
200
30.000
150
100
20.000
0
10.000
-50
0
-100
1991 1993
1995
1997
1999
2001
2003
2005
2007
2009
2011 2013 2015
FDI OUTFLOW, MILLIONS OF US$
RIGHT AXIS: FDI OUTFLOW, YEAR-ON-YEAR GROWTH RATE IN %
Source: UNCTAD
Although problems in how these processes were recorded mean that official figures do not
always reflect their true scale, they nonetheless shed some light on how these processes
evolved. At the start of the 1990s, outgoing FDI from all of Latin America stood at a little over
US$1.3 billion. In 2010, this figure reached a record high of US$57 billion. This upward trend
was interrupted, and in 2015, the region invested around US$33 billion abroad.
That same year, the slump in the prices of the commodities that many countries in the region exported deepened, and economic circumstances worsened, driving Latin American
FDI abroad to its lowest levels since 2010. However, Latin American firms currently operate
in every continent, and although they do most of their business within the region, they have
made investments in Europe, North America, Asia, Africa, and Oceania.
Despite the promise of this progress, only a handful of Multilatinas are truly global players,
which is due to both their limitations in terms of size and their as-yet insufficient accumulation of internal capacities through which to compete at the cutting edges of their respective
industries. This is exacerbated by the absence of explicit policies to support such companies
in the region, except in Brazil. Furthermore, very few Multilatinas operate in knowledgeintensive activities, which reflects the main pattern of productive specialization in the Latin
America. Finally, the internationalization of Multilatinas does not always lead to spillovers
and productive linkages within these companies’ countries of origin, such as by developing
supply chains. Looking to the future, this points to the need for an agenda to consolidate
the global presence of these firms and improve their impacts on their respective countries.
Source: INTAL Interactive: The Global Driving Force / Up and Down / Emerging Funds / Exporting Multilatinas /
Multilatinas in the Natural Resource Sector.n.
THE DNA OF REGIONAL INTEGRATION
48
INFRASTRUCTURE AND DEVELOPMENT
EFFICIENCY AND PRODUCTIVITY
The infrastructure gap is one of the largest obstacles preventing Latin America from increasing its productivity. The region invests just 3% of its GDP in
areas that are fundamental for efficiency and external competitiveness, such
as transportation, energy, and communications. This is half as much as OECD
countries invest.22
Logistics costs represent 8% of the cost of a final product for a European SME,
while in Latin America these could amount to 40% or more. Each additional
day of delay for perishable products reduces exports by 7%. 23
Are Latin Americans aware of the role that infrastructure plays in economic
development? Some 43% of the population acknowledges it to be an important issue. This awareness is highest in Uruguay (50%), Costa Rica (49%), and
Argentina (48%).
Figure 24.
THE IMPORTANCE OF INFRASTRUCTURE FOR DEVELOPMENT
Question: Which of the following topics are most important for development in your country?
Answers for transportation, water, energy, and sanitation infrastructure.
60%
50%
50
49
48
48
47
40%
46
46
46
45
45
41
43
40
30%
39
39
37
36
34
34
20%
10%
0%
E
Y
Y
R
R
IA CO AS INA
U
A
A
P.
A
A
A
IL
A
IA
UA RIC TIN MB AZ UEL DO HIL PER AM GUA RE GU
AL ADO LIV EXI UR LAT
G
C
R
A
M
A
N
N
Z
A
U
A EN LO
B
U
BO M OND CA
PA AR ICA CAR ATE ALV
NE EC
UR OST RG CO
H ÉRI
I
P IN
U LS
A
VE
N
C
G
M
E
O
AM
D
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
49
Acknowledging the importance of a problem does not necessarily imply a willingness to take on the cost of tackling it. Willingness to pay to improve infrastructure in Latin America remains low, and the regional average of 3.8 points
on a scale of 1 to 10 has not changed since 2015. With an average of 2.9, Brazil
was the country that showed the least willingness to do so, while Nicaragua,
with 5.2, was the most willing.
Figure 25.
WILLINGNESS TO PAY HIGHER TAXES AND/OR TAKE ON DEBT
TO FINANCE INFRASTRUCTURE
Question: On a scale of 1 to 10, where one is “not at all willing” and “totally willing,”
how willing are you for taxes to increase or for your country to take on debt to finance
infrastructure works that will facilitate integration?
60%
50%
40%
5,2
3,8
3,8
30%
3,8
3,5
3,1
3,2
4,0
3,3
3,5
2,9
3,23,2
3,5
3,7
3,8
3,6
3,6
3,5 3,4
3,8
3,8
4,0
4,2
4,1
3,8 4,0
4,2 4,2
3,7
4,5
4,2
4,4
4,6
3,8
20%
10%
0%
A
S
Y
P.
A
A
U
A
A
IL
IA OR BIA UAY HILE
CA
IC
OR O * NA
RE UEL PER AL
RA RI AGU GUA AM
ER AD XIC NTI RAZ LIV AD
C
M UG
U
M
N
N
A
M
U
Z
O
O
A
E
B
A EC
B ALV OL UR
ND ST
AR AR
PA ICA NE
ME RGE
AT
N
S
P
C
IN
HO CO NIC
TI
A
VE
GU
L
A
M
E
L
DO
2015
2016
Source: Compiled by the authors using data from Latinobarómetro 2016.
* Note: no data for Mexico 2015.
As we mentioned in INTAL (2016), limited willingness to pay for infrastructure
does not imply that people do not acknowledge the importance of this for
development. Other factors could also explain this lack of willingness, such as
a deteriorating social situation or the belief that “someone else” (usually the
state) should pay for infrastructure without this implying higher taxes in the
present or the future.
THE DNA OF REGIONAL INTEGRATION
50
COSIPLAN-IIRSA.
THE STATE OF INTEGRATION INFRASTRUCTURE
Highways, railroads, ports, and airports are the networks through which the
more than 400 million people living in South America travel, do trade, and
communicate within the region and abroad. Infrastructure has become a key
tool for development, especially for regional integration and cooperation, one
of the primary objectives of the South American Infrastructure and Planning
Council (COSIPLAN), which the Institute for the Integration of Latin America
and the Caribbean (INTAL) acts as the technical secretariat for.
The COSIPLAN Project Portfolio currently includes 593 transportation, energy, and communications projects throughout South America totaling an estimated investment of US$182.44 billion.
Some 17% of the projects and 12% of the total estimated investment for the
portfolio make up the Integration Priority Project Agenda (API). The API ranks
infrastructure as the top territorial planning tool for South America. It is made
up of 31 structured projects which break down into 103 individual projects.
These seek to consolidate regional physical connectivity networks to leverage
existing synergies and fill in gaps in existing infrastructure.
One selection criterion for a project to form part of the API is for the relevant
government to establish it as a priority and commit to building it, which is why
31% of the total structured projects are at the implementation stage, 26% at
the pre-implementation stage, 22% have been concluded, and only 21% are at
the profiling stage.
Of the total individual projects, the majority are in the road, river, and rails
subsector, proof that transportation works are top of the priorities list.
Figure a. ESTADO DE LA CARTERA DE PROYECTOS
21%
PROFILE
26%
PRE-IMPLEMENTATION
31%
IMPLEMENTATION
22%
CONCLUDED
Figure b.
INVERSIÓN ESTIMADA SEGÚN ESTADO (EN MILLONES DE US$)
38.154,3
PROFILE
44.847,3
PRE-IMPLEMENTATION
77.371,2
IMPLEMENTATION
27.964,5
CONCLUDED
Source: www.iirsa.org
THE DNA OF REGIONAL INTEGRATION
51
INFRASTRUCTURE FOR COMPETITIVENESS
Comparing willingness to pay for infrastructure with competitiveness ranking
reveals a negative correlation of -0.35. In other words, the least competitive
countries are the most willing to pay for improving competitiveness-related
infrastructure. This result is significant as demand for more infrastructure is
also greatest in these countries. Chile and Panama, where infrastructure is a
fundamental part of the economy due to the openness of their markets, are
exceptions to this rule, in that inhabitants are highly willing to pay for improvements even though they already have high-quality infrastructure. If these two
countries are taken out of the equation, the negative correlation among the
remaining 16 goes from -0.35 to -0.52.
Figure 26.
WILLINGNESS TO PAY HIGHER TAXES AND/OR TAKE ON DEBT
TO FINANCE INFRASTRUCTURE AND COMPETITIVENESS RANKING
5
4
4
4
3
3
3
3
4
3
4
3
3
4
4
4
5
5
4
4
4
4
4
4
3
4
4
4
4
3
3
3
5
5
4
4
4
4
3
2
1
0
.
S
IL
OR ICO NA
IA OR BIA AY ILE RA
CA UA UAY AMA REP ELA ERU ALA
U CH
U
AD EX NTI RAZ LIV AD
RI
M
P EM
G
G
G
N
N
U
D
ZU
A
A
A
M
B
BO ALV OLO URU
PA ICA NE
EC
GE
ON OST
AT
AR PAR
R
C
H
E
S
N
U
C
I
A
C
V
G
NI
M
EL
O
D
WILLINGNESS TO PAY HIGHER TAXES AND/OR TAKE ON DEBT TO FINANCE INFRASTRUCTURE
THAT BENEFITS INTEGRATION (1-10)
INFRASTRUCTURE COMPETITIVENESS RANKING (1-7)
LINEAR TREND (INFRASTRUCTURE COMPETITIVENESS RANKING)
Source: Compiled by the authors using data from Latinobarómetro 2016.
In addition to improving external competitiveness, transportation and communications infrastructure is a major source of revenue for national economies. A
comparison of the importance people place on infrastructure with the revenue
this brings in per inhabitant reveals a positive correlation of 0.49.
THE DNA OF REGIONAL INTEGRATION
52
Figure 27.
PERCEPTION OF THE IMPORTANCE OF INFRASTRUCTURE AND ITS
CONTRIBUTION TO THE ECONOMY
60%
1784
50%
40%
1018
30%
877
856
20%
768
691
649
518
10%
0%
833
165
252
321
272
102
989
414
481
270
S
R
.
U
O
L
IA NA ICA AY
RA XIC IVIA DOR ALA GUA REP UAY AMA ER
ILE DO ELA AZI
U
H
P
A
R GU
MB NTI
L
U
E
G AN
D M
R
C CU
A EM RA
N
O
Z
O
A
U
A
V
B
N
L
A
E
B AL AT
R
P
A
E
GE OST UR
C
O
N
I
A
C
HO
R
C
I
E
S
P
N
U
I
A
V
N
C
G
M
EL
DO
PERCENTAGE OF THE POPULATION THAT BELIEVES THAT TRANSPORTATION, WATER, ENERGY,
AND SANITATION INFRASTRUCTURE IS IMPORTANT FOR THEIR COUNTRY’S DEVELOPMENT
RIGHT AXIS: REVENUE FROM TRANSPORTATION, WAREHOUSING, AND COMMUNICATION (US$
PER CAPITA)
LINEAR TREND (REVENUE FROM TRANSPORTATION, WAREHOUSING, AND COMMUNICATION)
Source: Compiled by the authors using data from Latinobarómetro 2016.
Countries that place greater importance on infrastructure also tend to receive
higher revenues from the sector in question. This is the case in Uruguay, where
50% of the population said they acknowledge the importance of infrastructure
for development and where the development sector reports receiving almost
US$1,000 per inhabitant. At the other extreme, Honduras is the country that
places the least importance on infrastructure and is where development revenue per inhabitant is as low as US$165. In other words, internal and external
factors converged to determine the importance people place on infrastructure
and their willingness to pay to improve this.
Comparing these opinions with national statistics from earlier chapters reveals
that although there is a positive correlation how people rate integration and
actual foreign investment (0.53), there is no clear relationship between these
two factors and willingness to pay higher taxes or take on debt to finance infrastructure. This may be due to the fact that infrastructure is still partly perceived as being connected to domestic markets, and willingness to finance it
through taxes credit depends on other factors, such as optimism around the
respondent’s own economic situation in the future, for which there is a positive
correlation of 0.28 that would go up to 0.44 if Venezuela was taken out of the
equation (Venezuela functions as an outlier here because despite respondents’
considerable willingness to finance infrastructure, the country’s residents express the least optimism in the region, along with Chile).
THE DNA OF REGIONAL INTEGRATION
53
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Figure 28.
IMPORTANCE PLACED ON INTEGRATION, FDI, OPTIMISM REGARDING
PERSONAL FINANCIAL CIRCUMSTANCES, AND WILLINGNESS
TO FINANCE INFRASTRUCTURE
100%
5
4,5 4,6
90%
3,1
80%
70%
3,8
3,2
3,3
3,5
3,5
3,5
3,6
3,6
3,8
30%
5
4
54
49
36
4,2
4,4
4
63
50%
34
4,2
3,8
60%
40%
4,0
4,1
42
46
35
31
31
48
28
3
51
44
43
3
41
2
28
2
20%
1
10%
1
0%
0
OR
O
A
E AS ICA
P.
Y
A AY
IL
IA OR BIA
LA ERU ALA
IC
NA
R
UA HIL UR
GU AGU NAM N RE UE
AD EX NTI RAZ LIV AD
M
P EM
G
A
C
A
U
Z
O
D
M
T
R R
B
T
BO ALV OL URU
PA ICA NE
EC
GE
ON COS
CA PA
E
I
C
S
UA
N
H
I
AR
V
N
G
L
M
E
DO
PERCENTAGE OF THE POPULATION IN FAVOR OF THEIR COUNTRY INTEGRATING
ECONOMICALLY WITH OTHER COUNTRIES IN THE REGION
PERCENTAGE OF THE POPULATION THAT BELIEVES THAT FOREIGN INVESTMENT
IS BENEFICIAL FOR THEIR COUNTRY
OPTIMISM REGARDING PERSONAL FINANCIAL CIRCUMSTANCES IN THE NEXT 12 MONTHS
RIGHT AXIS: WILLINGNESS TO PAY HIGHER TAXES AND/OR TAKE ON DEBT TO FINANCE
INFRASTRUCTURE THAT BENEFITS INTEGRATION (1-10)
LINEAR TREND (OPTIMISM REGARDING PERSONAL FINANCIAL CIRCUMSTANCES
IN THE NEXT 12 MONTHS)
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
54
INNOVATION AND NEW TECHNOLOGIES
INDUSTRY 4.0
Scientific and technical progress is changing the way we produce goods and
services and do trade, along with the mechanisms for integration between people and countries.24The boundary between goods and services is being blurred
by the expansion of the digital economy, in which creativity is the main driver
for growth. 25
The globalization of large transnational companies is giving way to a new global
market in which exponential technologies are playing an increasingly important
role and where garage entrepreneurs have started to impact the world of economics in highly varied areas, such as trade, information and communication
technologies, digital manufacturing, the bioeconomy, big data applications, or
nanotechnology, thanks to their imaginations and online sales platforms.26 Are
we prepared for a future that is already upon us?
Some 24% of Latin Americans believe that infrastructure is important for development. These rates climbed to 39% in Costa Rica, 38% in Uruguay, and 31%
in El Salvador, while they dropped to 12% in the Dominican Republic, 16% in
Paraguay, and 17% in Bolivia.
Figure 29.
THE IMPORTANCE OF INNOVATION FOR DEVELOPMENT
Question: Which of the following topics are most important
for development in your country? Responses for innovation.
45%
40%
35%
30%
39
38
31
29
25%
27
25
24
24
23
23
22
20%
15%
21
24
19
18
17
17
16
12
10%
5%
0%
Y P.
L
E
S
A
A
U
A
A
A
A
A
A
O
R OR
CA AY
BI EL AM GU AZI HIL TIN ER RA XIC IVI AL UA RE RIC
RI GU ADO AD
M
L
P
U
G
U
M
A
C
R
N
E
E
N
N
Z
O
A
O
E
A
U
D
R
B
U
M
B AT AR ICA AM
N
PA CA
GE
ST UR ALV EC COL ENE
P IN
S
N
HO
AR
NI
CO
V
GU
M ATI
EL
DO L
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
55
Although Latin Americans believe that other issues are more of a priority for
economic development than innovation, they place particular importance on
encouraging creativity among children, putting forward new ideas in the workplace, and innovating for success. These are areas where innovation plays a key
role: in educating future generations to stimulate creativity, in their personal
and professional daily lives, and as a public policy at the national level.
On a scale of 1 to 10, encouraging creativity among children received the highest score of all three options, with an average 9.4 points in the region as a
whole. Following close behind was innovating for success, with an average 9.2
points, while putting forward new ideas in the workplace garnered 9.1. In most
countries, encouraging creativity among children outranked the other forms of
innovation except in the Dominican Republic, Honduras, and Nicaragua.
Figure 30.
IMPORTANCE PLACED ON INNOVATION
10,0
9,8
9,4
9,6
9,4
9,2
9,0
8,8
8,6
8,4
8,2
8,0
7,8
9,8
9,8
9,7
9,6
9,6
9,6
9,4
9,4
9,4
9,4
9,4
9,4
9,3
9,2
9,1
9,1
9,0
8,6
Y
A
A
R
R
Y AS ZIL CO RU
E
A
A
A
A
P.
CA
A
IA
I
RI GUA RIC DO MBI
E
EL DO HIL MAL NTIN GUA UR
IV AM GU RE
A
X
E
P
L
U
A
A
A
C E
D
N
N
BR ME
AM URU STA ALV OLO NEZ CU
T
BO PA AR ICA
GE ARA ON
E
IN
H
IC IN
O
E
UA AR
S
C
P
T
C
V
N
G
L
M
E
LA
DO
ENCOURAGING CREATIVITY AMONG CHILDREN
INNOVATING FOR SUCCESS IN THE COUNTRY
PUTTING FORWARD NEW IDEAS IN THE WORKPLACE
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
56
EXPECTATIONS REGARDING INNOVATION
What do Latin Americans expect from new technologies? First, they expect
them to have a positive impact on healthcare, which 48% of respondents said
would be positively affected over the next 15 years. This was followed by climate change and job creation, both with 45% of mentions.
Figure 31.
EXPECTED IMPACT OF INNOVATION
HO
QU USI
AL NG
ITY
22
8
HE
AN ALT
AT D M HCA
TE ED RE
NT IC
ION AL
/
DO NOT KNOW
NO ANSWER
NG
CI ITY
DU AL
RE QU
E
IN
O
GT
TIN G
P
A
AD AGIN TION
AN PULA
PO
Question: Which areas do you think that scientific and technological innovations
will have a positive impact on in 15 years’ time?
Responses in percentages for the entire region.
48
25
29
N
TRANSPORTATIO
AND
N
TRANSPORTATIO
RE
INFRASTRUCTU
60 50 40
45
30 20
10
10 20 30 40
30
50 60
45
31
GY
ER Y
ENUPPL
S
TAL
MEN AND ST
N
O
N
IN
IR
IO
ENVOTECT T AGA GE
PR E FIGH CHAN
TH IMATE
CL
JO
CREB
ATI
O
N
38
32
EDUCATION AND
TECHNICAL SKILLS
N Y
ZE IT
TI R
CI ECU
S
A
ANVAIL
D AB
Q
I
OF UALLITY
FO ITY
OD
34
Source: Compiled by the authors using data from Latinobarómetro 2016. Multiple answer question: percentages add up to
more than 100.
THE DNA OF REGIONAL INTEGRATION
57
What should applications of new techniques and scientific knowledge prioritize? Responses are consistent: at the top of the list, once again, are healthcare
(17%) and climate change (16%). Transportation and transportation infrastructure did not feature as priorities—only 2% mentioned the latter option.
Figure 32.
EXPECTED IMPACT OF INNOVATION.
TR
EN
PR VIRON
THEOTECT MENT
AG FIGH ION A AL
ND
CHAAINST T
NGE CLIM
ATE
Question: What do you think the number one priority for scientific and
technological innovations should be in the next 15 years?
Choose one. Responses in percentages for the entire region.
D
O
N
O
T
RT
KN
AT TR
O
A
IO N
W
N SP
/N
IN O
O
FR RT
AS AT AN
I
T
AN
RUON SW
AG
CT AN ER
IN AD
UR D
G
PO APT
E
PU ING
LA T
8
TIO O
HOU
2
N
SING
QUA
2
LITY
SP
RE
CA L
TH CA N
AL DI
HE D ME NTIO
AN ATTE
AN
O
16
17
4
RGY
ENE
16
4
60 50 40
PLY
SUP
D
N
A OD
Y
T FO
LI F
BI O
A
IL TY
A LI
V
A UA
Q
30 20
10
10 20 30 40
50 60
4
5
15
7
AND EDUCAT
TECH ION
NIC
SKIL AL
LS
REDUCING
INEQUALITY
ION
REAT
JOB C
CI
TI
ZE
N
SE
CU
RI
TY
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
58
A WINDOW ON THE FUTURE
cientific breakthroughs that seemed like something out of sci-fi films until recently, such as drones, robots, or driverless cars, are about to become commonplace, enabling countries to make exponential leaps in productivity. What
do Latin Americans think of these cutting-edge advances?
When asked about robots, drones, self-driving cars, body sensors, and artificial meat, a high proportion of Latin Americans (36%) opted not to answer the
question. The most highly rated option was robots to look after children and
old people, which received 32% of positive mentions, in keeping with Latin
Americans’ overriding concern for social issues. Applications of technology to
improve social issues seem to be much better received than technology for
production or transportation.
Artificial or lab-grown meat (which is still only a fledgling innovation) represents competition for livestock production in the region and received only 8%
of mentions. Nor was cutting-edge food technology particularly well received,
with only 13% of mentions. These low percentages may be due to a lack of
knowledge or fear of the changes these technological advances could bring
about in Latin Americans’ lives. Drones to transport merchandise and driverless
cars were viewed in a better light, with 23% of positive mentions.
Figure 33.
PERCEPTIONS OF NEW TECHNOLOGIES.
SS
LE RS
ER CA
IV
DR
SE
TH NSOR
WHAT TE S
NE AT W LL U
S
E
TO ED
EA
T
Question: Of the following list of technological advances,
which do you think will have a positive impact on the future?
Responses in percentages for the entire region.
13
23
SMALL FLYING
DEVICES THAT
TRANSPORT GOODS
40
30
20
L
A
CI
I
IF
RT T
A EA
M
8
10
10
23
20
30
36
40
DO
NO NOT KN
ANS
WEROW/
Source: Compiled by the authors
using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
ROB
LOOOTS T
K A HAT
AND THE FTER
ELD SICK
ERL
Y
32
59
No other question on the survey prompted such a high proportion of responses
indicating that respondents did not know or preferred not to answer the question—indeed, this response outranked the most frequently chosen option, robots. Might this result be linked to fears around new technologies or a lack of
knowledge of them? It is impossible to know for sure but it is interesting to note
that countries that pursue innovation by assigning research and development
resources to it are also those where fewer people refused to give opinions of
new technologies, with a negative correlation of -0.48 between the two variables.
Figure 34.
LACK OF KNOWLEDGE OF NEW TECHNOLOGIES AND R&D EXPENDITURE
Question: Of the following list of technological advances,
which do you think will have a positive impact on the future?
* Answers only for do not know/no answer
70%
1,15
60%
1,20
48
46
50%
43
40
40%
30%
1,40
64
25
20%
0,58
32
27
0,47 0,43
30
31
31
43
35
35
0,80
32
30
0,60
0,36 0,34
0,23
10%
1,00
0,40
0,22
0,18
0,16
0,16 0,09
0,04
0,04 0,03
0,03
0%
0,20
0,00
IL
S
Y
R
Y
E
A
A
A
U
A
O
A
IA
IA
OR
AZ TIN RIC XIC HIL DO GUA MB AM LIV PER GUA AL URA AGU
M D
C UA U
AD
N
O
O
BR EN TA ME
A
R
E
V
A
L
L
B
R
T
N
P
A
S
G
EC UR CO
PA GUA HO NIC L SA
AR CO
E
SHARE OF RESPONDENTS WHO SAID THEY DID NOT KNOW OR CHOSE NOT TO ANSWER QUESTIONS ON
CUTTING-EDGE TECHNOLOGY
RIGHT AXIS: EXPENDITURE ON RESEARCH AND DEVELOPMENT (AS A% OF GDP)
LINEAR TREND (SHARE OF RESPONDENTS WHO SAID THEY DID NOT KNOW OR CHOSE NOT TO ANSWER
QUESTIONS ON CUTTING-EDGE TECHNOLOGY)
Source: Compiled by the authors using data from Latinobarómetro 2016. Note: When this report went to press, there
was no data on R&D for Venezuela and the Dominican Republic, for which the share of respondents who said that
they did not know or chose not to answer questions on technology was 33% and 18%, respectively.
THE DNA OF REGIONAL INTEGRATION
60
AN INTERCONNECTED ECONOMY
The internet has made enormous changes to the way we communicate. The expansion of knowledge through the web has opened up countless opportunities
for cultural and commercial exchange. Today, there are more than 18 billion online devices, and this interconnectivity underpins trade in goods and services
based on new information and communication technologies (ICTs).27
We wondered if there was a relationship between how people rated creativity
in children’s education, the most frequently chosen of the three innovation options, and internet access. The positive correlation of 0.43 between these two
factors suggest that people value innovation more highly as their access to
new technologies and knowledge increases. This is true for Uruguay, which has
the highest number of broadband internet subscribers in the region and which
is also the country that places the most importance on encouraging creativity
early in life. At the other end of the spectrum are countries like Nicaragua or
Bolivia, which have low rates of internet use and place less value on creativity
among children. Facilitating internet access through technological democratization programs could thus contribute to raising awareness in society around
the importance of innovation.
Figure 35.
IMPORTANCE OF ENCOURAGING CREATIVITY AND INTERNET USE
30
25
25
20
16
15
10
9,0
8,6
6
5
9,0
12
10
9,4
9,4
9,3
9,2
9,1
8
14
10
9,4 9,4
9,4
9,6
9,4
8
6
2
2
9,6
1
2
9,6
9,7
9,7
11 9,8
8
5
3
0
P.
S
Y
R
A
A
A AY
A ILE LA OR
U
O
A
IL
A
IA
RE GU AM LIVI PER XIC AZ URA GUA TIN
EL MB
DO RIC GU
H MA AD
U
N
R
C
A
A
N
E
N
Z LO
A
U
E
V
B ND RA
A AR PA
U
M
BO
GE
IC
AT EC ENE CO SAL OST UR
A
IN NIC
HO P
AR
C
V
GU
L
M
E
O
D
IMPORTANCE OF ENCOURAGING CREATIVITY AMONG CHILDREN (AGED 1 TO 10)
FIXED BROADBAND INTERNET SUBSCRIBERS (PER HUNDRED PEOPLE)
LINEAR TREND (FIXED BROADBAND INTERNET SUBSCRIBERS PER HUNDRED PEOPLE)
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
61
EXPORTS WITH TECHNOLOGY CONTENT
The above point is particularly relevant in relation to trade, as it is the countries that show the most support for innovation that make exports with greater
technology content. The correlation between the two variables is positive and
stands at 0.46. If this cross-referencing only includes the countries in the region
that make above-average numbers of exports with technology content, the
correlation increases to 0.74
Figure 36.
THE IMPORTANCE OF INNOVATION AND TECHNOLOGICAL EXPORTS
50%
43%
45%
40%
30%
25%
20%
15%
5%
15%
13%
10%
4%
6%
5%
0%
12%
5%
2%
7%
8%
6%
8%
7%
4%
0%
0%
1%
P.
R AY CA
A
Y IA LA RU CO AS RU NA ZIL ILE MA UA
IA
RE UA LIV
EL MB
A PE
G
DO GU
H NA
RI
XI UR PE NTI RA
U
G
M
N
A
C
A
E
O
O
Z
A
D
U
E
A B
V
R
B
A
E
A
M
L
T
E
L
T
R
N
R
C
P
A
G
S
I
N CO SA
A
U
C
PA
IN
HO
AR
CO
NI
VE
GU
EL
OM
D
PERCENTAGE OF THE POPULATION THAT BELIEVES THAT INNOVATION IS IMPORTANT FOR THEIR COUNTRY’S
DEVELOPMENT
EXPORTS OF HIGH-TECHNOLOGY PRODUCTS (% OF EXPORTS OF MANUFACTURED PRODUCTS)
LINEAR TREND: EXPORTS OF HIGH-TECHNOLOGY PRODUCTS (% OF EXPORTS OF MANUFACTURED PRODUCTS)
Source: Compiled by the authors using data from Latinobarómetro 2016.
Costa Rica is paradigmatic of this, as it shows the region’s highest levels support for innovation as a driver for development, with 39% of responses, and it
is also the country with the highest share of technology exports, which account
for 43% of its total foreign sales.
THE DNA OF REGIONAL INTEGRATION
62
INVESTMENT IN R&D IN LATIN AMERICA
Investment in research and development (R&D) in relation to GDP indicates
the share of income that each society spends on innovation, science, and
technology policies. At the global level, investment in R&D stands at 2.1% of
GDP. However, these levels vary greatly from one region to another. North
America and East Asia and the Pacific spend more than this average (2.7%
and 2.6% of GDP, respectively), while Europe and Central Asia spend around
2% of GDP. In contrast, in Latin America and the Caribbean, this figure is just
0.8%.
Some of the countries that spend the most in this sense are Japan, the Republic of Korea, Germany, and the United States, all of which invest more in
R&D than the global average.
Figure a.
Inversión en I+D:
comparativo ALC
vs otras regiones
como % del PIB
Fuente: Banco Mundial
Figure b.
Inversión en I+D:
en ALC como
% del PIB
Source:
World Bank *Data for 2012
Although levels of investment are low compared to other regions, in Latin
America and the Caribbean, FDI has played a key role in supporting countries’ international integration patterns through investment in natural resources, exports, and modern services. However, the impact of investment
on technology content, innovation, and R&D has been moderate and not
widespread.
The country in Latin America that invests most in R&D in relation to its GDP
is Brazil, with 1.2%, although this is still much less than spending in more
advanced economies. Next on the list are Argentina (0.6%), Mexico (0.4%),
and Chile (0.4%).
Latin America must not be left behind. The major world powers are pursuing R&D as a driver for development. Indeed, in 2020, China hopes to
outstrip OECD countries’ spending on R&D by investing 2.5% of its GDP
in this (see “Made in CHI-LAT,” issue no. 40 of INTAL’s Integration & Trade
Journal).
THE DNA OF REGIONAL INTEGRATION
63
NATION BRANDING. WHAT DO WE THINK OF OURSELVES?
THE ADVANTAGES OF A GOOD REPUTATION
In recent years, there has been a proliferation of state agencies whose aim is to
establish a nation brand and win market shares for specific products by building
their reputation. This is how different countries in Latin America have become
world famous as producers of wine, tobacco, or beef, or hubs for tourism, food,
medical services, or clothing design. Building a reputation in a given market is one
of the keys to placing Latin American products in the rest of the world. Customers
and suppliers getting to know one another is the starting point on the road to new
business opportunities, and nation branding is a competitive advantage within this
process. 28
What makes Latin America special? For 57% of Latin Americans, the main feature
that defines their country is its national sport. This is followed by scenic beauty
and tourism (53%), food and drink (38%), carnivals, festivals, and religious festivities (31%), violence and drug trafficking (31%), human capital (22%), being a supplier of raw materials (18%), creativity (14%), and openness to the world (12%).
Figure 37.
NATION BRANDING
SPORTS
TOURISM
FOOD CULTURE
FESTIVALS
VIOLENCE
HUMAN CAPITAL
RAW MATERIALS
INNOVATION
DO NOT KNOW/
NO ANSWER
OTHER
OPENNESS TO THE
OUTSIDE WORLD
Question: Which of the following features do you think your country is well known for? (In %)
LATIN AMERICA
57
53
38
31
31
22
18
14
12
4
2
ARGENTINA
80
41
33
10
18
20
26
11
6
3
2
BOLIVIA
18
52
35
57
28
9
20
6
6
7
3
BRASIL
84
31
22
61
46
12
13
8
6
4
1
COLOMBIA
79
54
36
48
60
27
20
17
12
1
3
CHILE
65
60
31
11
13
18
27
9
13
6
3
ECUADOR
62
75
40
32
15
24
21
18
16
1
2
THE DNA OF REGIONAL INTEGRATION
64
57
53
38
31
31
22
18
14
12
4
2
ARGENTINA
80
41
33
10
18
20
26
11
6
2
BOLIVIA
18
52
35
28
61
1
54
36
48
60
1
CHILE
65
60
31
11
VIOLENCE
4
79
FESTIVALS
46
COLOMBIA
TOURISM
22
13
DO NOT KNOW/
NO ANSWER
3
31
RAW MATERIALS
7
84
HUMAN CAPITAL
6
BRASIL
FOOD CULTURE
57
OPENNESS TO THE
OUTSIDE WORLD
3
OTHER
ECUADOR
62
75
40
32
15
24
21
18
16
1
2
MÉXICO
MEXICO
53
47
57
32
51
20
13
13
12
3
4
PARAGUAY
PARAGUAY
55
34
35
16
27
26
15
11
10
6
4
PERÚ
PERU
24
63
79
28
26
14
19
14
10
5
2
URUGUAY
URUGUAY
93
57
23
41
7
28
23
10
16
0
1
VENEZUELA
VENEZUELA
59
42
38
18
37
25
18
13
12
2
2
COSTA
COSTA RICA
RICA
67
79
33
22
24
41
19
23
20
2
1
EL
EL SALVADOR
SALVADOR
28
36
35
31
57
26
16
19
14
7
1
GUATEMALA
GUATEMALA
39
58
37
35
34
18
13
13
9
10
1
HONDURAS
HONDURAS
46
36
24
17
52
16
12
10
10
6
0
NICARAGUA
NICARAGUA
51
59
42
27
8
25
18
20
19
9
1
PANAMA
PANAMÁ
48
62
33
42
19
20
12
17
16
4
2
DOMINICAN
REPÚBLICA
REPUBLIC
DOMINICANA
74
62
52
29
33
35
15
21
11
1
0
9
12
27
18
20
13
20
27
6
INNOVATION
SPORTS
LATINOAMÉRICA
8
17
9
6
12
13
6
3
3
As was to be expected, the main feature chosen for each country varied
throughout the region. In Central America, tourism proved to be more important than sports. In Bolivia, carnivals stood out, with 56% of mentions; raw
materials received more mentions in Chile than any other country in the region,
with 27% of mentions; while Peruvians chose food and cuisine as their nation
brand, with 75% of mentions. This diversity reflects the variety and richness of
our region and each country’s productive or cultural specialization.
THE DNA OF REGIONAL INTEGRATION
65
WHERE DO WE LIKE TO GO SHOPPING?
Do we see our countries the way that others see them? The United States is
undoubtedly Latin Americans’ favorite supplier of consumer goods and experiences, topping the list for five of the seven areas included in the questions
and ranking second and third for the other two. Latin Americans rate Peru and
Mexico highly for their food culture, just as their own citizens do. The same is
true for Brazil and sports.
Figure 38.
CONSUMER PREFERENCES
Question: which countries in the world do you prefer the following products
in each area of the economy to come from? Responses in percentages
for the entire region for options with answers greater than 3%.
MUSIC
FILM AND TV
3
4
PUERTO RICO
BRAZIL
6
3
10
23
3
6
VENEZUELA
COLOMBIA
ARGENTINA
COLOMBIA
OTHER
MEXICO
?
12
UNITED
STATES
3
36
DO NOT KNOW/
NO ANSWER
14
23
OTHER
MEXICO
? 34
12
UNITED
STATES
DO NOT KNOW/
NO ANSWER
8
SPAIN
BRAZIL
ELECTRONIC DEVICES
CLOTHING
4
5
16
18
OTHER
JAPAN
?
19
21
CHINA
THE DNA OF REGIONAL INTEGRATION
24
5
OTHER
CHINA
26
DO NOT KNOW/
NO ANSWER
UNITED
STATES
ARGENTINA
COLOMBIA
?
27
UNITED
STATES
4
31
DO NOT KNOW/
NO ANSWER
BRAZIL
66
SPORTS
TOURISM
4
10
4
SPAIN
ARGENTINA
5
UNITED
STATES
?
27
BRAZIL
OTHER
25
ARGENTINA
13
23
BRAZIL
6
SPAIN
OTHER
10
39
DO NOT KNOW/
NO ANSWER
UNITED
STATES
?
34
DO NOT KNOW/
NO ANSWER
FOOD CULTURE
4
3
ARGENTINA
ESPAÑA
4
3
CHINA
BRASIL
10
5
3
21
UNITED
STATES
PERU
COLOMBIA
OTHER
6
MEXICO
?
35
6
ITALY
DO NOT KNOW/
NO ANSWER
HOW THE REST OF THE WORLD
SEES LATIN AMERICA
The Country Brand Index (CBI), which has been published since 2005 by
the consulting firm FutureBrand, measures people’s perceptions of nation
branding through the associations that frequent visitors from other parts
of the world make in relation to a country’s products, tourism, heritage
and culture, quality of life, business climate, and value system.
The 2015/2016 report for LAC ranked Brazil, Argentina, Mexico, Chile,
and Peru highest in the region. The more than 2,000 people who were
surveyed were also asked to say what each of them associated with the
countries in the region. For example, the words that came up in relation to
Argentina were Buenos Aires, soccer, Messi, nature, Iguazú Falls, beauty,
tango, cuisine, culture, and beef. In Brazil, the most common words were
the Amazon, Pelé, Lula, and carnival.
The countries that moved most up the list in comparison with the last
survey include Mexico and Paraguay. One of the distinguishing features
of nation branding is its comprehensiveness. Nation branding includes a
range of subproducts related to tourism, culture, industry, and politics.
A nation brand that depends exclusively on how a single sector of the
economy is seen points to the need to expand on that image to minimize
risk and vulnerability.
THE DNA OF REGIONAL INTEGRATION
67
A REFLECTION OF REALITY
The main features of a country’s economy are not just something that is perceived by its own citizens and people from other countries. They also correlate
with a concrete, objective dimension. These sorts of links are essential when
a country seeks to improve its market reputation or establish itself as a supplier in strategic sectors for its development. Indicators of public perception
and national statistics need to be closely monitored to identify whether improvements to them translate into changes in public perception both within the
country and abroad. This is valid as a strategy both for highlighting the positive
aspects of the country and attempting to modify perceptions of any negative
aspects.
One example of this type of relationship is revenue from tourism, which is higher in countries where there is a strong sense that tourism is the defining feature
of their nation brand. The correlation between these two variables is positive
and stands at 0.35. This is true for Panama, the Dominican Republic, and Costa
Rica, which are part of the group of countries where the majority of the population believes that tourism is their nation brand and which also receive a major
percentage of their revenue from this sector.
Figure 39.
TOURISM AS A NATION BRAND AND REVENUE FROM TOURISM
33,3
90%
35
80%
30
70%
25
60%
19,6
19,8
50%
40%
13,6
30%
9,7
20%
10%
7,7
6,4
2,8
4,0
2,3
11,3
18,0
20
15
8,9
8,5
5,5
10
5,1
3,6
1,0
0%
5
0
.
Y
AS INA ELA ICO IVIA BIA UAY ALA GUA ILE MA REP ERU OR ICA
AZ GUA AD UR
H NA
X
T
M
L
U
P AD A R
G
A
R
M
C
E
N
N
B RA LV ND
U
E
A CA
EZ M
T
BO OLO URU ATE AR
P
G
N
A
I
EC OS
C
U NIC
PA L S
HO AR VE
IN
C
G
M
E
DO
IL
OR
PERCENTAGE OF THE POPULATION THAT SEES TOURISM AS THEIR COUNTRY’S NATION BRAND
REVENUE FROM INTERNATIONAL TOURISM (% OF TOTAL EXPORTS)
RIGHT AXIS: LINEAR TREND (REVENUE FROM INTERNATIONAL TOURISM AS A % OF TOTAL EXPORTS
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
68
Regarding a country’s negative features, public perceptions also align with the
reality reflected in national statistics. This is true for public opinion on violence
as a distinguishing feature, which has a positive correlation of 0.67 with the
homicide rate per 100,000 inhabitants. Colombia, El Salvador, and Honduras
are among the countries in the region with the highest homicide rates and are
also places where citizens point to violence as being one of the country’s distinguishing features.
Figure 40.
VIOLENCE AS A DISTINGUISHING FEATURE AND HOMICIDE RATE
75
80%
70%
80
64
62
70
60
60%
50
50%
40%
17
30%
20%
10%
17
8
12
4
8
8
31
10
7
9
12
28
25
16
40
30
20
10
0
0%
-10
.
AY UA ILE OR INA MA ICA ERU UAY IVIA REP ALA ELA ZIL ICO RAS OR BIA
D
A
A
R
X
M
P AG OL
U
GU AG CH AD NT
U
M
N
N
A
U
U
BR ME ND LVA LO
R
E
A TE NEZ
R
B
PA ST
C
O
A
A
A
UR ICA
I
EC RG
O
C
P
N GU
H LS
A
CO
VE
N
MI
E
DO
PERCENTAGE OF THE POPULATION THAT BELIEVES VIOLENCE AND/OR DRUG TRAFFICKING TO BE A DISTINGUISHING FEATURE FOR THEIR COUNTRY
RIGHT AXIS: HOMICIDE RATE PER 100,000 INHABITANTS
RIGHT AXIS: LINEAR TREND (HOMICIDE RATE PER 100,000 INHABITANTS)
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
69
CLIMATE CHANGE AND ENVIRONMENTAL AWARENESS
WILLINGNESS TO PROTECT THE ENVIRONMENT
The challenge of protecting the environment cuts through different public policy areas, from production techniques to recycling, and from energy production to logistics and transportation. Technology transfer is also fundamental to
bringing production techniques in line with new standards. Growing awareness
of environmental issues and workers’ rights among consumers within value
chains is giving rise to an expanding market for sustainable products and services. It is estimated that the global market for environmental products and
services has reached the US$866 billion mark and will increase to US$1.9 trillion
in 2020.29
Are Latin Americans willing to protect the environment? Care for the environment received 49% of mentions among the key development topics included
in the survey, second only to social policies and inclusion. Looking at these
answers by country, Nicaragua is by far the country that ranks the environment highest on its list of priorities, with 71% of positive mentions, followed by
Costa Rica and Colombia (both with 60%) and El Salvador (57%). Paraguay, at
the other end of the spectrum, was the country that placed least important on
environmental matters, where they received only 31% of mentions. Next were
Brazil (37%) and Bolivia (38%).
Figure 41.
THE IMPORTANCE OF THE ENVIRONMENT FOR DEVELOPMENT
Question: Which of the following topics are most important
for development in your country?
Responses for the environment and climate change.
80%
70%
60%
49
50%
40%
30%
20%
10%
0%
71
60
60
57
56
54
53
52
51
50
47
47
46
41
39
38
37
31
A ILE LA EP. AY
R
A CA
IA
AS RU OR
LA ICO INA VIA ZIL UAY
CA
A
RI AGU RI MB ADO NAM CH MA N R GU
UR PE AD ZUE EX NT OLI
G
É
A LO LV
D
U
E
BR RA
R
U
A
A
M
M GE B
T
E
P
C
A ICA OS CO SA
N
AT NIC
UR HON
A
E
R
O
E
P
U
A
C
V
N
N
G MI
EL
TI
DO
LA
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
70
It is worth noting that a low percentage of mentions of the importance of care
for the environment does not necessarily imply a lack of interest in the issue.
It may be the case that citizens simply believe there are other more pressing
issues that need to be focused on first. This may explain why Paraguay moved
up the ranking from last place to first when respondents were asked about their
willingness to pay to protect the environment. Some 72% of Paraguayans said
they would be willing to pay up to 20% more for sustainable products. This
share is much higher than the regional average of 49% and far outstrips Paraguay’s 2015 results, which stood at 45%. Second and third in this ranking were
Nicaragua (65%) and Venezuela (62%).
Figure 42.
WILLINGNESS TO PAY TO PROTECT THE ENVIRONMENT
Question: Imagine that your country signs an integration agreement with other countries
in the region (Latin America and the Caribbean).
Would you agree or disagree on the need to include commitments relating to care
for the environment in regional integration agreements,
even if this implied paying approximately 20% more for products?
“Strongly agree” and “agree” are the only responses shown.
2015
2016
2015
2016
44
LATIN AMERICA
49
46
PERU
46
45
PARAGUAY
72
32
BRAZIL
44
55
NICARAGUA
65
48
BOLIVIA
43
45
VENEZUELA
62
39
HONDURAS
43
51
CHILE
59
40
COSTA RICA
42
54
DOMINICAN REP.
58
49
COLOMBIA
41
29
ECUADOR
53
41
EL SALVADOR
36
51
URUGUAY
52
35
GUATEMALA
34
49
ARGENTINA
50
40
PANAMA
31
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
71
SUPPORT FOR RENEWABLE ENERGY
How important is environmental awareness? What distinguishes the energy
mix in countries where there is greater concern for the environment? A comparison of how important people say the environment is with indicators on the
use of clean energy reveals a trend toward new forms of energy production
playing a greater role in countries where levels of concern for the environment
are higher.
This is true for Nicaragua, Costa Rica, and El Salvador, which are part of a group
of countries which produce relatively larger quantities of energy from alternative sources and where people rank care for the environment high among their
concerns. Both variables show a positive correlation of 0.52.
Figure 43.
ENVIRONMENTAL CONCERN AND
THE USE OF ALTERNATIVE ENERGIES
80%
71%
70%
60%
50%
39% 41%
40% 37%
46% 47% 47%
56% 57%
53% 54%
50% 51% 52%
10%
13%
0%
3%
5%
5%
37%
35%
30%
20%
60% 60%
10% 6%
9%
5%
14%
16%
3%
12%
19%
5% 5%
0%
.
IL IA NA CO LA OR RU AS
AY EP ALA HILE MA OR BIA ICA UA
D
A
AZ LIV NTI EXI ZUE AD PE UR GU N R
R AG
M
C
R
D RU A
EM
U
B BO GE
AN LVA OLO STA AR
M NE
T
N
C
P
C
A
I
A
U
E
C
C
S
N
HO
VE
AR
CO NI
GU
MI
EL
DO
PERCENTAGE OF THE POPULATION THAT BELIEVES THE ENVIRONMENT AND CLIMATE CHANGE TO BE IMPORTANT FOR DEVELOPMENT
USE OF ALTERNATIVE AND NUCLEAR ENERGY (% OF TOTAL ENERGY USE)
LINEAR TREND (USE OF ALTERNATIVE AND NUCLEAR ENERGY AS A % OF TOTAL ENERGY USE)
Source: Compiled by the authors using data from Latinobarómetro 2016.
* Note: No data was available for Paraguay at the time of print.
This correlation increases to 0.66 if the exclusive use of electricity produced
from renewable energy sources is taken into account. Once again, the countries of Central America are part of the group that makes greatest use of this,
while Paraguay, Brazil, and Bolivia, which make limited use of renewable energy, place less importance on the environment for development.
THE DNA OF REGIONAL INTEGRATION
72
Figure 44.
ENVIRONMENTAL CONCERN AND ELECTRICITY
PRODUCTION FROM RENEWABLE SOURCES
80%
71%
70%
60%
50%
40%
30%
31%
41%
37% 38% 39%
52% 53% 54% 56% 57%
50% 51%
46% 47% 47%
20%
0%
0%
8%
1%
2% 4%
41%
34%
20%
10%
60% 60%
0% 2%
1%
13% 11%
1%
21%
9%
0%
3%
-10% AY
S
A
Y
R
U
R
A
P.
IA ICA UA
IA
LA ILE
EL DO PER URA UA RE
U
IV TIN
DO MB
R AG
U
L
G
G
MA CH
A
A
N
N
Z
O
O
D
A
A
U
E
R
V
U
E
B G
L
R
N UR ICA AT
NE EC
OL OST ICA
A
O
R
E
C
PA
S
U
N
H
I
V
A
C
N
G
L
M
E
DO
PERCENTAGE OF THE POPULATION THAT BELIEVES THE ENVIRONMENT AND CLIMATE CHANGE TO BE IMPORTANT FOR DEVELOPMENT
ELECTRICITY PRODUCTION BASED ON RENEWABLE SOURCES, EXCLUDING HYDROPOWER (% OF TOTAL)
LINEAR TREND (ELECTRICITY PRODUCTION BASED ON RENEWABLE SOURCES, EXCLUDING HYDROPOWER
(% OF TOTAL)
Source: Compiled by the authors using data from Latinobarómetro 2016.
Renewable energy is more associated with technological innovation than any
other sector. From electric driverless cars to low-cost solar energy panels and
wind turbines, innovation is a fundamental part of any change to a country’s
energy mix. There was a correlation of 0.74 between the numbers of respondents who agreed that science policies should focus on energy and each country’s carbon dioxide emissions per inhabitant. Venezuela tops the list for both
these aspects, followed by Honduras and Argentina.30 In Guatemala, Uruguay,
and Brazil, however, respondents did not prioritize energy-related innovation
so much, although these are some of the countries that pollute the least.
THE DNA OF REGIONAL INTEGRATION
73
Figure 45
ENERGY-RELATED INNOVATION AND POLLUTION PRIORITIES
12%
6
6
10%
4,4
4,6
4,3
8%
2,2
6%
5
1,2
2,2
1,9
4%
2%
7
1
1,9
1,4
1,1
1,5
0,8
2,2
1,8
1,4
0,7
4
3
2
1
0%
0
.
EP
R
E
A
O
A
LA AY ZIL BIA ERU GUA OR UAY ICA IVIA R
AS LA
IC DO HIL AM TIN
P RA
UR ZUE
MA UGU BRA OM
AD AG A R OL N
C
EX UA
N EN
D
E
V
A
L
M
A
T
B IC
N NE
P RG
AT UR
CA SAL PAR OS
EC
CO
N
HO VE
I
A
NI
C
GU
L
M
E
DO
PERCENTAGE OF THE POPULATION THAT THINKS THAT THE PRIORITY FOR SCIENTIFIC AND
TECHNOLOGICAL INNOVATIONS SHOULD BE ENERGY SUPPLY
RIGHT AXIS: CO2 EMISSIONS PER CAPITA (TONS PER INHABITANT)
RIGHT AXIS: LINEAR TREND (CO2 EMISSIONS PER CAPITA, TONS PER INHABITANT)
Source: Compiled by the authors using data from Latinobarómetro 2016. 31
SUSTAINABLE DEVELOPMENT
The main features of sustainable development are as follows: 1) greater efficiency
in the use of natural resources and thus greater care for the environment; 2) the
emergence of coproduction models, especially in the software industry, based on
collaborative mechanisms and facilitated by lower access costs for ICTs; 3) the
emergence of hitherto unimagined new markets for goods and services on the
basis of greater and better connectivity between sources of supply and demand,
which are framed within the sharing economy; 4) overcoming different market failures; 5) greater citizen involvement in government decisions; etc.
The regressive impact these technologies may have on labor markets and income
distribution is one of the greatest challenges of our time. Low-skilled and low-paid
jobs are at great risk of being replaced by robots or artificial intelligence. This risk
is somewhat counterbalanced by the increase in productivity resulting from automation, which offers new opportunities in highly skilled sectors of the labor market
where salaries are highest. It will thus be necessary to monitor and respond to the
potential difficulties that may hamper the transfer of resources from one sector to
another.
Source: INTAL Interactive Do It Yourself / Open Source / Technofarming / Eco-Factories / Replaced by Robots / Driving toward
the Future
THE DNA OF REGIONAL INTEGRATION
74
ENVIRONMENTAL ASPECTS WITHIN LATIN AMERICAN COUNTRIES’
TRADE AGREEMENTS
According to the Legal Instruments of Integration (IJI) database, there are currently more than
250 multilateral environmental agreements (MEAs) in force, approximately 20 of which include
provisions that could affect trade. This has led to a growing need to regulate the relationship
between the environment and trade in both the multilateral and regional agendas. In fact, the
protection and preservation of the environment were included in the Marrakesh Agreement,
which established the World Trade Organization (WTO), and they are increasingly included in
economic integration agreements: of the total 282 agreements recorded to date at the WTO, 72
(that is, 25%) include provisions on the environment.
Latin America is no exception to this rule. Of a total of 109 economic integration agreements
recorded in the IJI database, 39 include environmental regulations of some sort. This group
of agreements includes three main categories: (a) agreements that include a clause, chapter,
or annex protocol with a detailed description of environmental obligations (20 agreements);
(b) agreements that only include references to environmental cooperation commitments (six
agreements); and (c) agreements that make a brief reference to parties committing to not reducing their respective environmental standards to attract investment (13 agreements).
In general terms, agreements in the first category above are based on the NAFTA model (and
on more recent developments of this model used by the United States and Canada in their respective agreements with other countries) and include some or all of the following obligations:
• Level of protection: the obligation to anticipate “high levels” of environmental protection and
to continue increasing these progressively. The obligation to comply with the commitments
adopted by parties in MEAs.
• Transparency: a commitment to publishing all environmental regulations the parties may
adopt.
• Antiprotectionism: the obligation to not use environmental measures for protectionist ends.
• Not lowering standards: a commitment to not lower environmental standards to attract trade
or investment.
• Implementation: the obligation to adopt measures to ensure effective compliance with environmental standards.
• Legal resources: access to administrative and legal resources to assert environmental rights.
• Institutionalization: the creation of mixed committees or focal points to follow up on the obligations set out in the agreement.
• Dispute settlement mechanism.
Chile, Peru, and Colombia stand out among countries in the region that have signed trade
agreements of this type. The vast majority of these agreements are with developed countries
outside the region (particularly with the United States and Canada).
The agreements containing commitments on environmental cooperation include those that
only mention the issue tangentially within clauses or chapters on cooperation in a broader
sense (for example, article 18 of the Australia/Chile Free Trade Agreement) and those that contain a clause or section that specifically focuses on cooperation toward protecting the environment (for example, the EU/Mexico Agreement). The latter set includes joint activities in areas
such as exchanges of information and experiences relating to environmental legislation; training human resources; environmental education; and implementation of joint research projects,
among others.
Finally, it is worth underlining that only one of the 43 agreements signed within the ALADI
framework and recorded in the IJI database—Economic Complementarity Agreements (ECAs)
and Agreements with Other Latin American Countries (AAP.25TM)—includes environmental
provisions, the agreement between Ecuador and Guatemala.
Sources: Legal Instruments of Integration (IJI) database, available at INTRADEBID.
THE DNA OF REGIONAL INTEGRATION
75
Figure 46.
STRONG AGREEMENT WITH PAYING MORE FOR SUSTAINABLE
PRODUCTS AND POLLUTING
POLLUTION AND CARBON FOOTPRINTS
In relation to willingness to pay more for environmentally friendly products,
we wondered if there was also a relationship with environmental pollution. The
correlation between CO2 emissions and the percentage of people who claim
to “strongly agree” with paying more for environmentally friendly products
stands at 0.46%, a figure which goes up to 0.70% if Paraguay, the main outlier,
is not taken into account.
25%
6
7
6
20%
4,4 4,6
15%
10%
5%
5
4,3
4
2,2
2,2
2,2
1,1
1,8
1
0,8
1,2
1,4
1,4
3
1,9
1,5
1,9
0,7
0%
2
1
0
.
A
AY RU ICO INA OR ILE ZIL
AS BIA VIA
AY LA
MA DOR REP ALA GUA RIC
A
UR OM OLI UGU PE EX NT AD CH BRA AGU ZUE
N VA AN EM RA TA
D
E
U
A
M G
E
B UR
T
R
L C
N OL
A
P
S
EC
C
PA VEN
SA INI GUA NIC CO
HO
AR
EL OM
D
PERCENTAGE OF THE POPULATION THAT THINKS THAT SCIENTIFIC AND TECHNOLOGICAL INNOVATIONS
WILL HAVE A POSITIVE INFLUENCE ON ENERGY SUPPLY
RIGHT AXIS: CARBON FOOTPRINT (HECTARES PER PERSON)
RIGHT AXIS: LINEAR TREND (CARBON FOOTPRINT, HECTARES PER PERSON)
Source: Compiled by the authors using data from Latinobarómetro 2016.
Another measure of environmental damage, carbon footprints, estimates the
amount of greenhouse gases that a country emits and their impact on climate
change due to pollution from manufacturing activities or transportation. A
comparison between countries with the largest carbon footprints and the importance people place on energy-related innovation reveals a correlation of
0.78. In other words, countries where production and manufacturing lead to a
larger carbon footprint are also those that are demanding answers and where
energy is an innovation priority.
THE DNA OF REGIONAL INTEGRATION
76
Figure 47.
IMPORTANCE OF ENERGY-RELATED INNOVATION
AND CARBON FOOTPRINTS
50%
45%
40%
35%
30%
25%
20%
0,7
15%
10%
5%
0%
2,0
2,1
2,0
1,7
1,4
1,1
1,0
0,9
0,7
0,5
0,8 0,7
0,6
1,1
1,4
1,0
0,9
2,5
0,7
1,5
1,0
0,5
0
IA AY LA UA ZIL OR BIA AS EP. RU AY ICO MA OR INA ICA ILE LA
E
IV
L
PE UGU EX NA AD NT A R
GU MA AG BRA VAD OM DUR N R
CH ZU
A CU GE ST
A
L
M
L
E
BO RA ATE AR
R
N
P
C
O
N
I
U
E
SA
C
PA GU NIC
HO IN
AR CO
VE
M
EL
O
D
PERCENTAGE OF THE POPULATION THAT THINKS THAT SCIENTIFIC AND TECHNOLOGICAL INNOVATIONS
WILL HAVE A POSITIVE INFLUENCE ON ENERGY SUPPLY
RIGHT AXIS: CARBON FOOTPRINT (HECTARES PER PERSON)
RIGHT AXIS: LINEAR TREND (CARBON FOOTPRINT, HECTARES PER PERSON)
Source: Compiled by the authors using data from Latinobarómetro 2016.
GREEN TECHNOLOGY
Our ways of thinking about civil society in relation to care for the environment are
evolving as we move from a Fordist production model characterized by mass production based on cheap energy and materials toward a new paradigm based on
exponential technologies. The old dilemma of having to choose between growth
and social wellbeing has collapsed. As economies grow, civil societies gradually
demand that greater care is taken of environmental resources. Economic development is understood as going hand-in-hand with improvements to social wellbeing
and thus necessarily entails greater environmental protection on the part of all
economic agents. The productive specializations of Latin American countries are
largely based on the exploitation of their natural resources, so they will need to
redouble their efforts to reduce the environmental costs of economic growth.
Markets are already starting to pay a premium for products and services created
using processes that involve environmental targets, so there are already incentives
for the productive sector to explore production mechanisms that include environmental objectives. By signing international agreements that include environmental
commitments, governments are helping to raise the profile of these incentives and
respond to this growing social demand. New technologies are fundamental allies
for maximizing productive efficiency, reducing energy consumption, the use of materials, and emissions of pollutants.
Source: INTAL Interactive Eco-Factories / Environmental Goods / Unoiled / Environmental Costs / Cooling the Fever /
Eco-Policies
THE DNA OF REGIONAL INTEGRATION
77
SOCIAL INCLUSION AND EQUALITY
WORKERS’ RIGHTS
Despite the progress that countries in Latin America and the Caribbean have
made toward greater equality, the region is still one of the most unequal on
earth. The last decade has seen social aid programs proliferate, the middle class
multiply and access to basic education and health services expand. However,
175 million people are still living in poverty and inequalities of both income and
opportunities persist. Informal employment remains one of the region’s defining features: some 55% of employment is informal or precarious and this figure
is higher than 60% in some countries. The income gap between formal and informal workers increases at retirement ages and the lack of incentives around
formal employment leads to low saving rates: only half of the active population
saves for retirement.32
This is perhaps why social policies are Latin Americans’ number one priority. The
struggle against poverty and improvements in equality and social inclusion are
what Latin Americans state as their top demand and the most important issue
for development: 51% of respondents argued that social issues are their main
priority. This figure is as high as 66% in Chile, 65% in Venezuela, and 62% in Paraguay. Meanwhile, in five Central American countries (Guatemala, Honduras, Nicaragua, the Dominican Republic, and El Salvador), these values are well below
average, ranging from 30% to 41%.
Figure 48.
THE IMPORTANCE OF SOCIAL INCLUSION FOR DEVELOPMENT
Question: Which of the following topics
are most important for development in your country?
Responses for social policies, social inclusion, and poverty.
70%
60%
51
50%
40%
30
31
36
41
41
44
47
48
53
54
54
57
59
60
62
62
65
66
30%
20%
10%
0%
.
L
CA LA AS UA EP
OR IVIA AMA ICA BIA ERU AZI DOR UAY INA ICO UAY ELA HILE
R
RI MA UR AG N R AD
T
X
M
L
P
U
C
R
E
N
O
D
V BO PA
R
B CUA RUG EN ME RAG EZ
E
A
TA OL
S
G
AM AT ON ICA NIC SAL
A EN
U
E
R
O
C
P
N GU
I
H
I
A
C
N M
V
T
EL
LA
DO
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
78
Informal employment is a serious problem in Latin America, given its low rates
of active saving for retirement.33 When asked about their willingness to pay
more for products that respect workers’ rights, 46% of Latin Americans said
they agreed, an increase on the 41% from 2015. The countries that are most willing to pay more for products that are manufactured in compliance with labor
laws are Paraguay (71%), Venezuela (63%), and Nicaragua (62%)
Figure 49.
WILLINGNESS TO PAY TO ENSURE THAT
WORKERS’ RIGHTS ARE RESPECTED
Question: Imagine that your country signs an integration agreement
with other countries in the region (Latin America and the Caribbean).
Would you agree or disagree on the need to include commitments relating
to the rights of local and foreign workers, even if this implied paying
approximately 20% more for products? *
“Strongly agree” and “agree” are the only responses shown.
2015
2016
2015
2016
41
LATIN AMERICA
46
24
BRAZIL
42
44
PARAGUAY
71
45
BOLIVIA
41
53
NICARAGUA
62
39
HONDURAS
41
40
VENEZUELA
63
44
COLOMBIA
37
53
DOMINICAN REP.
54
38
EL SALVADOR
36
49
CHILE
54
38
COSTA RICA
36
31
ECUADOR
53
31
GUATEMALA
32
48
URUGUAY
50
-
MEXICO
28
46
ARGENTINA
48
36
PANAMA
26
42
PERU
44
Source: Compiled by the authors using data from Latinobarómetro 2016.
Once again, the countries of Central America are among the least willing to
pay to respect rules of trade that include workers’ rights during the production
phase. In comparison with the 2015 survey, there was a significant increase in
Brazil, where the willingness to pay more for products that respect workers’
rights on the basis of integration agreements went from 24% to 42% (a 75%
increase).
THE DNA OF REGIONAL INTEGRATION
79
NODO I+I.
SOCIAL INCLUSION PLUS REGIONAL INTEGRATION
Social inequality creates conflict and fragmentation among citizens, limits social
cohesion, and increases the propensity for social instability, while social inclusion is
a sign of a democracy that is going from strength to strength.
At the IDB’s Institute for the Integration of Latin America and the Caribbean (INTAL), the Integration and Trade Sector, and the Social Sector, we contribute to the
quest for creative responses to inequality through research and a series of activities that aim to bolster regional integration and enhance social inclusion.
In this context, an initiative led by professors Luis Bértola (Universidad de la
República, Uruguay) and Jeffrey Williamson (Harvard University, USA) brought together global experts to identify the historical origins of inequality and prevent
it from being one of the defining features of Latin America and the Caribbean.
The book La Fractura. Pasado y presente de la búsqueda de equidad social en
América Latina [The Fracture. The Quest for Social Equality in Latin America, Past
and Present] takes a long-term view of the structural phenomena behind transient
situations and takes an original look at the issue through an interdisciplinary and
scientifically rigorous approach.
The joint work between INTAL and the IDB’s Social Sector is continuing through
Node i+i (Regional Integration + Social Inclusion), a project launched as a strategic
alliance with Columbia University in New York (www.iadb.org/intal/nodoi [link in
Spanish])
Regional and global integration are key to reversing this trend toward inequality as
it is the societies that are most integrated with the region and the world that manage to grow most harmoniously, and reduce the inequality gap between people.
Integration and inclusion are two sides of the same coin.
This is why there is shared interest among the countries of Latin America to move
forward with second-generation reforms that ignore bogus shortcuts and instead
lay the foundations for nations that are simultaneously more equal and more integrated with the world.
TABLE A. CONDITIONAL CASH TRANSFER PROGRAMS
Country
Program
Bolivia
Ecuador
Guatemala
Dominican Rep.
Argentina
Brazil
Uruguay
Honduras
Colombia
Mexico
Costa Rica
Panama
Peru
El Salvador
Paraguay
Chile
Latin America
Juancito Pinto Program
Human Development Program
Mi Familia Progresa
Solidaridad
Asignación Universal por Hijo
Bolsa Familia
Plan Equidad
Programa de Asignación Familiar
Familias en Acción
Oportunidades
Avancemos
Red de Oportunidades
Juntos
Comunidades Solidarias Rurales
Tekoporã
Chile Solidario
Coverage
as a % of the
population
Budget
as a % of
GDP
46,6
38,3
32,6
32,2
29,1
28,1
26,4
25,6
23,8
23,2
15
10
8,6
7,5
7,5
6,4
25
0,23
0,71
0,24
0,24
0,49
0,41
0,48
0,32
0,22
0,46
0,23
0,15
0,13
0,15
0,13
0,13
0,37
Source: Integration & Trade Journal 39 (The Great Leap Forward), compiled by the authors, 2015.
THE DNA OF REGIONAL INTEGRATION
80
As in INTAL (2016), there was a negative correlation between income distribution as measured by the Gini coefficient and willingness to pay more for products that respect workers’ rights. This year, the relationship grew even stronger
as the correlation between the two variables went from -0.20 in 2015 to -0.36.
In other words, the most unequal countries are the least willing to pay more
to improve equality. This negative relationship therefore implies that social inequality comes hand-in-hand with a lack of demand for labor rights, which
makes reducing this inequality even harder.
Figure 50.
WILLINGNESS TO PAY TO RESPECT WORKERS’ RIGHTS AND GINI
COEFFICIENT
60
80%
52
47
50
49
53
44
70%
53
54
48
45
42
42
47
50
47
48
48
39
60%
50%
50
40
30
40%
30%
20%
10%
0%
Y
E
Y
P.
A
R
A OR
A
A
O LA
IA AS IA ZIL RU NA
UA DO HIL RE GU UEL GUA
AM XIC MA RIC AD
MB UR LIV RA PE NTI
G
A
C
A
N
N
E
O
Z
O
U
A
A
R
B
A
M ATE OS ALV OL
ND B
PA
GE UR ECU
IC ICA ENE PAR
C
C LS
HO
IN
AR
N
V
GU
M
E
DO
20
10
0
PERCENTAGE OF THE POPULATION THAT AGREES WITH THE NEED TO INCLUDE COMMITMENTS RELATING
TO THE RIGHTS OF LOCAL AND FOREIGN WORKERS, EVEN IF THIS IMPLIES PAYING APPROXIMATELY 20%
MORE FOR PRODUCTS
RIGHT AXIS: GINI COEFFICIENT (WORLD BANK ESTIMATE) (2013)
RIGHT AXIS: LINEAR TREND, GINI COEFFICIENT (WORLD BANK ESTIMATE) (2013)
Source: Compiled by the authors using data from Latinobarómetro 2016.
THE DNA OF REGIONAL INTEGRATION
81
INTEGRATION AND THE MOVEMENT OF PEOPLE
Chapters on migration and the movement of people are occupying an increasingly prominent role in the integration agenda. Are the countries that send
more migrants abroad in favor of paying more for products that defend workers’ rights?
With a positive correlation of 0.56, the countries that are most willing to pay
more to defend products that respect workers’ rights are also those that have
sent a higher percentage of migrants to other countries in the region. This is
true for Paraguay and Nicaragua. In contrast, countries such as Mexico, Panama, or Guatemala, which express only limited willingness to pay more for products that respect workers’ rights, also have smaller migratory flows.
Figure 51.
WILLINGNESS TO PAY TO RESPECT WORKERS’ RIGHTS AND
THE TOTAL MIGRANTS FROM OTHER COUNTRIES IN THE REGION
11,1
80%
12%
70%
10%
60%
4,8
50%
40%
2,7
30%
0,5 0,6
20% 0,5
10%
0%
1,0
1,6
0,7
6%
4%
0,7
0,1
8%
5,7
5,2
0,6
1,6
0,3
0,3
2%
0%
0,0
-2%
.
EP
A
A OR
O LA
AS VIA ZIL ERU INA UAY OR ILE R
UA ELA UAY
AM XIC MA RIC AD
UR OLI
AG ZU AG
RA P ENT UG UAD CH N
E
A
V
D
E
R
B
A
M AT OS AL
B
N
G
IC ICA ENE PAR
UR EC
C LS
HO
IN
AR
N
V
GU
M
E
DO
N
PA
PERCENTAGE OF THE POPULATION THAT AGREES WITH THE NEED TO INCLUDE COMMITMENTS RELATING
TO THE RIGHTS OF LOCAL AND FOREIGN WORKERS, EVEN IF THIS IMPLIES PAYING APPROXIMATELY 20%
MORE FOR PRODUCTS
TOTAL IMMIGRANTS FROM OTHER COUNTRIES IN LATIN AMERICA
RIGHT AXIS: LINEAR TREND (TOTAL IMMIGRANTS FROM OTHER COUNTRIES IN LATIN AMERICA)
Source: Compiled by the authors using data from Latinobarómetro 2016.
Another way of observing this phenomenon is analyzing whether there is an
empirical relationship between the percentage of the population that claims
that integration has had a positive impact on employment in their country and
an alternative measure of the movement of people.34 In this case, the correlation increases to 0.62, and those countries with least restrictions on the movement of capital and people are also those that believe that integration has had
a positive impact on employment.
THE DNA OF REGIONAL INTEGRATION
82
Figure 52.
THE POSITIVE IMPACT OF INTEGRATION ON EMPLOYMENT AND THE
MOVEMENT OF CAPITAL AND PEOPLE
50%
10
8,8
9
45%
40%
6,3
35%
30%
4,7
5,1
7,2
6,9
7,0
5,9
5,1
5,1
25%
5,8
4,7
4,9
8
6,9
6,0
4,6
3,4
20% 2,8
7
6
5
4
3
15%
2
10%
1
0
0
.
LA CO RU VIA AY INA OR LA OR AS BIA AY ZIL ILE ICA MA UA EP
UE EXI PE OLI AGU NT AD EMA AD DUR OM UGU RA CH A R NA AG N R
Z
V
B
T
M
B AR
PA CAR ICA
GE AL AT ECU ON COL UR
NE
P
OS
H
AR L S GU
C
VE
NI MIN
E
DO
PERCENTAGE OF THE POPULATION WHO BELIEVE THAT INTEGRATION HAS HAD A POSITIVE IMPACT ON
EMPLOYMENT
RIGHT AXIS: INDEX OF RESTRICTIONS ON THE MOVEMENT OF PEOPLE AND CAPITAL
RIGHT AXIS: LINEAR TREND (INDEX OF RESTRICTIONS ON THE MOVEMENT OF PEOPLE AND CAPITAL)
Source: Compiled by the authors using data from Latinobarómetro 2016.
This result is particularly significant given that it disproves the idea that openness to immigration translates into fewer jobs for the local population. In contrast, there is a positive correlation between openness to flows of people and
capital and the belief that this type of policy has a positive impact on employment.
If willingness to pay more for products that respect labor laws is cross-referenced with tolerance for immigrants, the inverse relationship can be observed:
that is, willingness to pay more correlates with less tolerance for immigration.
There is a correlation of -0.41 between this and agreement with there being
an anti-immigration law, and one of -0.28 with agreement with the idea that
foreigners come to compete for local jobs. 35
THE DNA OF REGIONAL INTEGRATION
83
Figure 53.
WILLINGNESS TO PAY TO RESPECT WORKERS’ RIGHTS
AND IMMIGRATION-RELATED ISSUES
80%
70%
60%
50%
40%
30%
20%
10%
0%
L
S
Y
E
Y
A
P.
A
A
A
U
R
A OR
A
A
A
O LA
BI RA IVI AZI ER TIN UA DO HIL RE GU EL UA RIC
AM XIC MA RIC AD
M
L
P
U
G
A ZU AG
R
C
A
N
E
N
N
E E TA LV
O
O
D
U
R
B
E
U
A
A
L
M
E
M
B
R
N
A
P
G UR EC
C
A
AT OS SA
CO HO
NI NIC VEN PA IN
AR
GU C EL
T
MI
A
O
L
D
PERCENTAGE OF THE POPULATION THAT AGREES WITH THE NEED TO INCLUDE COMMITMENTS RELATING
TO WORKERS’ RIGHTS, EVEN IF THIS IMPLIES PAYING APPROXIMATELY 20% MORE FOR PRODUCTS
THERE SHOULD BE A LAW TO STOP FOREIGNERS FROM ENTERING THE COUNTRY FOREIGNERS ARE
STARTING TO COMPETE FOR OUR JOBS.
LINEAR TREND (THERE SHOULD BE A LAW TO STOP FOREIGNERS FROM ENTERING THE COUNTRY)
Source: compiled by the authors using data from Latinobarómetro 2015.
THE DNA OF REGIONAL INTEGRATION
84
FINAL REFLECTIONS
The value that the Continuous Monitoring System for Integration Processes
(SEPI) contributes as an RPG is one of observing and measuring what our societies think about integration processes, which are currently transforming the
map of regional trade at full steam.
In this second analytical exercise which builds on the work begun in the exploratory study INTAL (2016), we have expanded our examination of different aspects of integration among the countries of Latin America by cross-referencing
public opinion and objective integration conditions within the region and with
the world.
As was the case in 2015, the 2016 INTAL-Latinobarómetro initiative revealed
highly varied results, which makes it difficult to draw general conclusions that
are valid for the entire region. However, the regional averages point to a certain
stability from one year to the next, except for willingness to pay for sustainable
products (which increased from 44% to 49%), and willingness to pay for products that comply with labor regulations (which increased from 41% to 45%).
Table 2.
THE EVOLUTION OF ATTITUDES TOWARD INTEGRATION
INTAL/LATINOBARÓMETRO 2015 AND 2016
INTEGRATION WITH THE REGION AND THE WORLD
Which of the following topics are most important for development
in your country?
Answers for integration with the region and the world
2015 24%
24% 2016
TRADE IN GOODS AND SERVICES
Would you agree or disagree that your country should be able to buy goods
and services from any other country in the region and that any other
country should be able to sell goods and services to your country?
“Strongly agree” and “agree” are the only responses shown
2015 69%
THE DNA OF REGIONAL INTEGRATION
69% 2016
85
INFRASTRUCTURE
On a scale of 1 to 10, where one is “not at all willing” and “totally willing,” how
willing are you for taxes to increase or for your country to take on debt to
finance infrastructure works that will facilitate integration?
2015 3,8%
3,8% 2016
ENVIRONMENT
Do you agree on the need to include commitments relating to care for the
environment in regional integration agreements, even if this implies paying
approximately 20% more for products?
“Strongly agree” and “agree” are the only responses shown
2015 44%
49% 2016
SOCIAL INCLUSION
Would you agree or disagree on the need to include commitments
relating to the rights of local and foreign workers, even if this implied
paying approximately 20% more for products?
“Strongly agree” and “agree” are the only responses shown
2015 41%
46% 2016
We have included new issues in this 2016 study, such as nation branding and
the chapter on innovation. This has revealed that innovation and creativity are
valued highly in the region and that there is a low dispersion of these results,
which is an excellent departure point for human capital to continue being the
factor that sets Latin Americans apart. This issue is particularly important for
quality of trade, as valuing innovation highly is associated with greater numbers
of exports with technology content. Latin Americans’ knowledge of how new
technologies impact production and employment is still limited, and consensus around building public–private partnerships to leverage the use of cuttingedge technologies cannot be high if people do not yet understand what these
technological advances could mean for Latin American economies.
THE DNA OF REGIONAL INTEGRATION
86
Although it does not explore causal relationships, this study lists a series of
potentially interesting stylized facts and conclusions:
• Countries which show greater support for integration also show greater support for democracy and higher levels of trust in their government.
• Countries with more concentrated export baskets show greater support for
economic integration.
• Countries that prioritize investment tend to receive higher levels of foreign
investment.
• Countries with greater infrastructure deficits are more willing to take on credit or pay taxes to finance infrastructure works to facilitate integration.
• Countries that value innovation more highly tend to have larger shares of exports with technology content.
• Countries whose populations prioritize the environment make greater use of
alternative energy sources.
• Countries where people are more willing to pay for products that respect
workers’ rights also have more equal income distributions.
Cross-referencing the two tables—subjective data from surveys, on the one
hand, and national statistical data, on the other—also allowed as to outline certain overall trends, such as the fact that countries with the highest exports per
capita and the most primarized economies are the ones where there is most
demand for foreign investment. Sports, tourism, and food make up “brand Latin America,” and are associated with the production of both services (sports
and tourism) and goods (food).
Confirming the trends discovered in INTAL (2016), this study found that the
most unequal societies are also the least willing to make the extra effort to
strengthen workers’ rights, thus creating a hard core of inequality that suggests we need to redouble our efforts in this direction. These results point to
inequality being the enemy of integration, a hypothesis that we will explore
further in future studies.
Social policies and the environment topped the list of Latin Americans’ priorities: some 49% of Latin Americans believe that the environment is important
for development.
THE DNA OF REGIONAL INTEGRATION
87
FUTURE AREAS OF RESEARCH
This study has opened up multiple possibilities for future research in the academic sphere and for the assessment of public policies both before and after
their implementation.
One almost automatic outcome that will emerge over time as we accumulate
these surveys is the analysis of the effects of specific events. For example, we
will be able to see how a given labor or immigration reform, the signing of a
trade agreement, or any other major integration event affects public opinion.
Continually measuring public opinion before and after this event will allow us
to see how it impacts individual perceptions and to establish relationships and
make accurate predictions by taking useful precedents into account. Countries
that are attempting to make progress in a given direction through their integration policies will be able to use these precedents as valuable raw material
for analyzing the potential impact of government decisions on public opinion.
Another as-yet unexplored line of research is the examination of quantitative
causal effects among the different variables, for which we will need more instances of these measurements and a longer time period that will allow us to
use econometric and formalization tools.
Experimentation within predetermined conditions (or survey-experiments) is
being increasingly used in the analysis of agents’ economic behavior and may
well be a useful complement to the conclusions that we have derived from this
fieldwork.
Another outstanding task would be to cross-reference these data sets with
other trade performance indicators, such as the degree of integration into
global value chains, and even with variables that are not directly linked to integration, such as gender equality or different measures of economic wellbeing,
which may also give rise to other interesting conclusions.
In future publications, we will build on this study by identifying differences in
the opinions of the populations of South American and Caribbean countries,
and between members of the MERCOSUR and the Pacific Alliance, to get to
know whether public perceptions vary according to the specific features of
each country’s integration policy.
THE DNA OF REGIONAL INTEGRATION
89
ANNEX 1 – NATION VS. REGION
ARGENTINA
LATIN AMERICA
ECONOMIC
INTEGRATION
80%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
72%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
48%
46%
8
3
TRADE IN
GOODS AND
SERVICES
75%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
61%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
50%
49%
INNOVATION
9,4%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,3%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
80 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
48 43
TOURISM
41 53
SOCIAL INCLUSION AND POVERTY
60 51
FOOD CULTURE
33 38
ENVIRONMENT AND CLIMATE CHANGE
39 49
FESTIVALS
10 31
EQUAL OPPORTUNITIES
56 46
VIOLENCE
18 31
PRODUCTIVITY
44 34
HUMAN CAPITAL
20 22
GENDER EQUALITY
32 32
RAW MATERIALS
26 18
HUMAN CAPITAL
25 25
INTEGRATION WITH THE REGION
AND THE WORLD
33 24
INNOVATION
22 24
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
11
14
6
12
DO NOT KNOW/NO ANSWER
OTHER
3
4
2
2
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
4
90
6
BOLIVIA
LATIN AMERICA
1
ECONOMIC
INTEGRATION
77%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
2
POLITICAL
INTEGRATION
58%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
41%
46%
8
3
TRADE IN
GOODS AND
SERVICES
60%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
63%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
43%
49%
INNOVATION
9,1%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,2%
3,8%
5
KEY DEVELOPMENT
ISSUES
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
36 43
SOCIAL INCLUSION AND POVERTY
44 51
ENVIRONMENT AND CLIMATE CHANGE
38 49
EQUAL OPPORTUNITIES
35 46
PRODUCTIVITY
30 34
9 22
GENDER EQUALITY
30 32
20 18
HUMAN CAPITAL
16 25
INTEGRATION WITH THE REGION
AND THE WORLD
16 24
INNOVATION
17 24
SPORTS
18 57
TOURISM
52 53
FOOD CULTURE
35 38
FESTIVALS
57 31
VIOLENCE
28 31
HUMAN CAPITAL
RAW MATERIALS
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
6
14
6
12
DO NOT KNOW/NO ANSWER
OTHER
7
4
3
2
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
10 6
91
BRAZIL
LATIN AMERICA
ECONOMIC
INTEGRATION
66%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
55%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
42%
46%
8
3
TRADE IN
GOODS AND
SERVICES
71%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
INVESTMENT
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
44%
49%
INNOVATION
9,4%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
63%
71%
4
3,5%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
84 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
47 43
TOURISM
31 53
SOCIAL INCLUSION AND POVERTY
54 51
FOOD CULTURE
22 38
ENVIRONMENT AND CLIMATE CHANGE
37 49
FESTIVALS
61 31
EQUAL OPPORTUNITIES
51 46
VIOLENCE
46 31
PRODUCTIVITY
31 34
HUMAN CAPITAL
12 22
GENDER EQUALITY
21 32
RAW MATERIALS
13 18
HUMAN CAPITAL
18 25
8
14
15 24
6
12
INTEGRATION WITH THE REGION
AND THE WORLD
INNOVATION
23 24
4
4
1
2
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
9
92
6
CHILE
LATINOAMÉRICA
1
INTEGRACIÓN
ECONÓMICA
78%
77%
1
¿Está a favor de la
integración económica
de su país con otros países de la región?
2
INTEGRACIÓN
POLÍTICA
52%
60%
2
¿Está a favor de la integración política de su país
con otros países de la región?
3
3
¿Está de acuerdo con que su país pueda comprar bienes y
servicios de cualquier otro país de la región y que cualquier otro
país de la región pueda vender bienes y servicios en su país?
4
¿Considera que la inversión extranjera es beneficiosa para el desarrollo
económico del país?
72%
69%
5
¿Cuán dispuesto está a que se aumenten los impuestos y/o
el país se endeude para financiar obras de infraestructura
que faciliten la integración?
INCLUSIÓN
SOCIAL Y
EQUIDAD
6
¿Cuán importante cree que es fomentar la creatividad en los niños?
54%
46%
8
INTERCAMBIO
DE BIENES Y
SERVICIOS
INVERSIÓN
7
Imagine que su país firma un acuerdo de integración con otros países
de la región.
¿Está de acuerdo con que se incluyan compromisos relativos al
cuidado del medio ambiente, aunque implique pagar 20% más
por los productos?
MEDIO
AMBIENTE
65%
71%
8
Imagine que su país firma un acuerdo de integración
con otros países de la región.
¿Está de acuerdo con que se incluyan
compromisos sobre los derechos de los
INFRAESTRUCTURA
trabajadores, aunque implique pagar
20% más por los
productos?
59%
49%
INNOVACIÓN
9,4%
9,4%
7
6
CARACTERÍSTICAS QUE
DEFINEN LA MARCA PAÍS
DEPORTE
65 57
TURISMO
60 53
GASTRONOMÍA
31 38
FESTIVIDADES
11
31
VIOLENCIA
13 31
CAPITAL HUMANO
18 22
MATERIAS PRIMAS
27 18
INNOVACIÓN
APERTURA AL EXTERIOR
9
14
13 12
NS/NR
6
4
OTROS
3
2
THE DNA OF REGIONAL INTEGRATION
4
3,8%
3,8%
5
TEMAS IMPORTANTES
PARA EL DESARROLLO
INFRAESTRUCTURA
(TRANSPORTE, ENERGÍA Y SANEAMIENTO)
46 43
INCLUSIÓN SOCIAL Y POBREZA
66 51
MEDIO AMBIENTE Y CAMBIO CLIMÁTICO
54 49
IGUALDAD DE OPORTUNIDADES
61 46
PRODUCTIVIDAD
34 34
IGUALDAD DE GÉNERO
40 32
CAPITAL HUMANO
29 25
INTEGRACIÓN A LA REGIÓN Y AL MUNDO
26 24
INNOVACIÓN
23 24
NS/NR
5
6
93
BOLIVIA
LATIN AMERICA
1
ECONOMIC
INTEGRATION
77%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
2
POLITICAL
INTEGRATION
58%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
41%
46%
8
3
TRADE IN
GOODS AND
SERVICES
60%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
63%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
43%
49%
INNOVATION
9,1%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,2%
3,8%
5
KEY DEVELOPMENT
ISSUES
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
36 43
SOCIAL INCLUSION AND POVERTY
44 51
ENVIRONMENT AND CLIMATE CHANGE
38 49
57 31
EQUAL OPPORTUNITIES
35 46
VIOLENCE
28 31
PRODUCTIVITY
30 34
HUMAN CAPITAL
9 22
GENDER EQUALITY
30 32
RAW MATERIALS
20 18
HUMAN CAPITAL
16 25
INTEGRATION WITH THE REGION
AND THE WORLD
16 24
INNOVATION
17 24
SPORTS
18 57
TOURISM
52 53
FOOD CULTURE
35 38
FESTIVALS
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
6
14
6
12
DO NOT KNOW/NO ANSWER
OTHER
7
4
3
2
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
10 6
94
BRAZIL
LATIN AMERICA
ECONOMIC
INTEGRATION
66%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
55%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
42%
46%
8
3
TRADE IN
GOODS AND
SERVICES
71%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
INVESTMENT
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
44%
49%
INNOVATION
9,4%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
63%
71%
4
3,5%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
84 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
47 43
TOURISM
31 53
SOCIAL INCLUSION AND POVERTY
54 51
FOOD CULTURE
22 38
ENVIRONMENT AND CLIMATE CHANGE
37 49
FESTIVALS
61 31
EQUAL OPPORTUNITIES
51 46
VIOLENCE
46 31
PRODUCTIVITY
31 34
HUMAN CAPITAL
12 22
GENDER EQUALITY
21 32
RAW MATERIALS
13 18
HUMAN CAPITAL
18 25
8
14
15 24
6
12
INTEGRATION WITH THE REGION
AND THE WORLD
INNOVATION
23 24
4
4
1
2
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
9
6
95
ECUADOR
LATIN AMERICA
ECONOMIC
INTEGRATION
84%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
69%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
53%
46%
8
3
TRADE IN
GOODS AND
SERVICES
82%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
84%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
53%
49%
INNOVATION
9,6%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,1%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
62 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
46 43
TOURISM
75 53
SOCIAL INCLUSION AND POVERTY
57 51
FOOD CULTURE
40 38
ENVIRONMENT AND CLIMATE CHANGE
47 49
FESTIVALS
32 31
EQUAL OPPORTUNITIES
48 46
VIOLENCE
15 31
PRODUCTIVITY
41 34
HUMAN CAPITAL
24 22
GENDER EQUALITY
41 32
RAW MATERIALS
21 18
HUMAN CAPITAL
25 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
18 14
INTEGRATION WITH THE REGION
AND THE WORLD
28 24
INNOVATION
29 24
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
16 12
1
4
2
2
DO NOT KNOW/NO ANSWER
3
6
96
EL SALVADOR
LATIN AMERICA
1
ECONOMIC
INTEGRATION
71%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
2
POLITICAL
INTEGRATION
54%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
36%
46%
8
3
TRADE IN
GOODS AND
SERVICES
57%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
71%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
36%
49%
INNOVATION
9,7%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,5%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
28 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
TOURISM
36 53
SOCIAL INCLUSION AND POVERTY
FOOD CULTURE
35 38
ENVIRONMENT AND CLIMATE CHANGE
57 49
FESTIVALS
31 31
EQUAL OPPORTUNITIES
42 46
VIOLENCE
57 31
PRODUCTIVITY
36 34
HUMAN CAPITAL
26 22
GENDER EQUALITY
41 32
RAW MATERIALS
16 18
HUMAN CAPITAL
36 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
19 14
INTEGRATION WITH THE REGION
AND THE WORLD
31 24
INNOVATION
31 24
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
14 12
7
4
1
2
DO NOT KNOW/NO ANSWER
37 43
41
11
51
6
97
GUATEMALA
LATIN AMERICA
ECONOMIC
INTEGRATION
59%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
46%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
32%
46%
8
3
TRADE IN
GOODS AND
SERVICES
52%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
55%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
34%
49%
INNOVATION
9,4%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4,6%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
39 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
39 43
TOURISM
58 53
SOCIAL INCLUSION AND POVERTY
30 51
FOOD CULTURE
37 38
ENVIRONMENT AND CLIMATE CHANGE
53 49
FESTIVALS
35 31
EQUAL OPPORTUNITIES
41 46
VIOLENCE
34 31
PRODUCTIVITY
29 34
HUMAN CAPITAL
18 22
GENDER EQUALITY
28 32
RAW MATERIALS
13 18
HUMAN CAPITAL
26 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
13 14
INTEGRATION WITH THE REGION
AND THE WORLD
18 24
INNOVATION
17 24
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
9
12
10
4
1
2
DO NOT KNOW/NO ANSWER
15
6
98
HONDURAS
LATIN AMERICA
ECONOMIC
INTEGRATION
76%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
57%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
41%
46%
8
3
TRADE IN
GOODS AND
SERVICES
61%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
83%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
43%
49%
INNOVATION
9,4%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,8%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
46 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
34 43
TOURISM
36 53
SOCIAL INCLUSION AND POVERTY
31 51
FOOD CULTURE
24 38
ENVIRONMENT AND CLIMATE CHANGE
50 49
FESTIVALS
17 31
EQUAL OPPORTUNITIES
32 46
VIOLENCE
52 31
PRODUCTIVITY
26 34
HUMAN CAPITAL
16 22
GENDER EQUALITY
28 32
RAW MATERIALS
12 18
HUMAN CAPITAL
21 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
10 14
INTEGRATION WITH THE REGION
AND THE WORLD
19 24
INNOVATION
19 24
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
10 12
6
4
0
2
DO NOT KNOW/NO ANSWER
7
6
99
MEXICO
LATIN AMERICA
ECONOMIC
INTEGRATION
68%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
46%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
28%
46%
3
TRADE IN
GOODS AND
SERVICES
59%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
62%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
41%
49%
INNOVATION
9,3%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,2%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
53 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
34 43
TOURISM
47 53
SOCIAL INCLUSION AND POVERTY
62 51
FOOD CULTURE
57 38
ENVIRONMENT AND CLIMATE CHANGE
41 49
FESTIVALS
32 31
EQUAL OPPORTUNITIES
38 46
VIOLENCE
51 31
PRODUCTIVITY
25 34
HUMAN CAPITAL
20 22
GENDER EQUALITY
28 32
RAW MATERIALS
13 18
HUMAN CAPITAL
14 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
13 14
INTEGRATION WITH THE REGION
AND THE WORLD
18 24
12 12
INNOVATION
18 24
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
3
4
4
2
DO NOT KNOW/NO ANSWER
5
6
100
NICARAGUA
LATIN AMERICA
ECONOMIC
INTEGRATION
77%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
65%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
62%
46%
8
3
TRADE IN
GOODS AND
SERVICES
84%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
83%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
65%
49%
INNOVATION
9,0%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4%
3,8%
5
KEY DEVELOPMENT
ISSUES
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
39 43
SOCIAL INCLUSION AND POVERTY
36 51
ENVIRONMENT AND CLIMATE CHANGE
71 49
27 31
EQUAL OPPORTUNITIES
36 46
31
PRODUCTIVITY
27 34
HUMAN CAPITAL
25 22
GENDER EQUALITY
27 32
RAW MATERIALS
18 18
HUMAN CAPITAL
23 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
20 14
INTEGRATION WITH THE REGION
AND THE WORLD
25 24
SPORTS
51 57
TOURISM
59 53
FOOD CULTURE
42 38
FESTIVALS
VIOLENCE
8
DO NOT KNOW/NO ANSWER
OTHER
19 12
9
4
1
2
THE DNA OF REGIONAL INTEGRATION
INNOVATION
DO NOT KNOW/NO ANSWER
24 24
8
6
101
PANAMA
LATIN AMERICA
ECONOMIC
INTEGRATION
73%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
49%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
26%
46%
8
3
TRADE IN
GOODS AND
SERVICES
59%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
68%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
31%
49%
INNOVATION
9,1%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4,2%
3,8%
5
KEY DEVELOPMENT
ISSUES
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
45 43
SOCIAL INCLUSION AND POVERTY
47 51
ENVIRONMENT AND CLIMATE CHANGE
56 49
EQUAL OPPORTUNITIES
40 46
31
PRODUCTIVITY
28 34
HUMAN CAPITAL
20 22
GENDER EQUALITY
32 32
RAW MATERIALS
12
18
HUMAN CAPITAL
25 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
17
14
12
INTEGRATION WITH THE REGION
AND THE WORLD
23 24
16
INNOVATION
24 24
4
4
2
2
SPORTS
48 57
TOURISM
62 53
FOOD CULTURE
33 38
FESTIVALS
42 31
VIOLENCE
19
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
3
6
102
PARAGUAY
LATIN AMERICA
ECONOMIC
INTEGRATION
89%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
70%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
71%
46%
8
3
TRADE IN
GOODS AND
SERVICES
88%
69%
5
How willing are you for taxes to increase or for your country to take ondebt
to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
87%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
72%
49%
INNOVATION
9,4%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4,1%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
55 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
41 43
TOURISM
34 53
SOCIAL INCLUSION AND POVERTY
62 51
FOOD CULTURE
35 38
ENVIRONMENT AND CLIMATE CHANGE
31 49
FESTIVALS
16 31
EQUAL OPPORTUNITIES
43 46
VIOLENCE
27 31
PRODUCTIVITY
22 34
HUMAN CAPITAL
26 22
GENDER EQUALITY
24 32
RAW MATERIALS
15 18
HUMAN CAPITAL
18 25
INTEGRATION WITH THE REGION
AND THE WORLD
27 24
INNOVATION
16 24
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
11
14
10 12
6
4
4
2
DO NOT KNOW/NO ANSWER
7
6
103
PERU
LATIN AMERICA
ECONOMIC
INTEGRATION
77%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
61%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
44%
46%
8
3
TRADE IN
GOODS AND
SERVICES
59%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
68%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
46%
49%
INNOVATION
9,2%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4,5%
3,8%
5
KEY DEVELOPMENT
ISSUES
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
45 43
SOCIAL INCLUSION AND POVERTY
54 51
ENVIRONMENT AND CLIMATE CHANGE
47 49
EQUAL OPPORTUNITIES
43 46
PRODUCTIVITY
31 34
14 22
GENDER EQUALITY
28 32
RAW MATERIALS
19 18
HUMAN CAPITAL
24 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
14 14
INTEGRATION WITH THE REGION
AND THE WORLD
18 24
SPORTS
24 57
TOURISM
63 53
FOOD CULTURE
79 38
FESTIVALS
28 31
VIOLENCE
26 31
HUMAN CAPITAL
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
10 12
5
4
2
2
INNOVATION
DO NOT KNOW/NO ANSWER
21 24
5
6
104
DOMINICAN
REPU
REPUBLIC
LATIN AMERICA
ECONOMIC
INTEGRATION
77%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
64%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
54%
46%
8
3
TRADE IN
GOODS AND
SERVICES
77%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
85%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
58%
49%
INNOVATION
8,6%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4,2%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
74 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
40 43
TOURISM
62 53
SOCIAL INCLUSION AND POVERTY
41 51
FOOD CULTURE
52 38
ENVIRONMENT AND CLIMATE CHANGE
52 49
FESTIVALS
29 31
EQUAL OPPORTUNITIES
28 46
VIOLENCE
33 31
PRODUCTIVITY
15 34
HUMAN CAPITAL
35 22
GENDER EQUALITY
29 32
RAW MATERIALS
15 18
HUMAN CAPITAL
12 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
21 14
INTEGRATION WITH THE REGION
AND THE WORLD
13 24
INNOVATION
12 24
DO NOT KNOW/NO ANSWER
OTHER
11
12
1
4
0
2
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
3
6
105
URUGUAY
LATIN AMERICA
1
ECONOMIC
INTEGRATION
87%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
2
POLITICAL
INTEGRATION
68%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
50%
46%
8
3
TRADE IN
GOODS AND
SERVICES
78%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
74%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
52%
49%
INNOVATION
9,8%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
3,6%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
93 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
50 43
TOURISM
57 53
SOCIAL INCLUSION AND POVERTY
59 51
FOOD CULTURE
23 38
ENVIRONMENT AND CLIMATE CHANGE
51 49
FESTIVALS
41 31
EQUAL OPPORTUNITIES
61 46
VIOLENCE
7
31
PRODUCTIVITY
53 34
HUMAN CAPITAL
28 22
GENDER EQUALITY
48 32
RAW MATERIALS
23 18
HUMAN CAPITAL
47 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
10 14
INTEGRATION WITH THE REGION
AND THE WORLD
43 24
INNOVATION
38 24
DO NOT KNOW/NO ANSWER
OTHER
16 12
0
4
1
2
THE DNA OF REGIONAL INTEGRATION
DO NOT KNOW/NO ANSWER
4
6
106
VENEZUELA
LATIN AMERICA
ECONOMIC
INTEGRATION
85%
77%
1
Are you in favor or
against the economic integration
of your country with other countries in
the region?
1
2
POLITICAL
INTEGRATION
76%
60%
2
Are you in favor or against the political integration of
your country with other countries in the region?
3
Do you agree or disagree that your country should be able to buy
goods and services from any other country in the region and that any
other country should be able to sell goods and services to your
country?
4
Do you believe that foreign investment is beneficial for your country’s
economic development?
SOCIAL
INCLUSION
AND EQUALITY
63%
46%
8
3
TRADE IN
GOODS AND
SERVICES
89%
69%
5
How willing are you for taxes to increase or for your country to take on
debt to finance infrastructure works that will facilitate integration?
6
How important do you think it is to encourage children to be creative?
7
Imagine that your country signs an integration agreement with other
countries in the region. Would you agree on the need to include
commitments relating to care for the environment, even if this
implied paying approximately 20% more for products?
INVESTMENT
81%
71%
8
Imagine that your country signs an integration
agreement with other countries in the region.
Would you agree on the need to include
commitments relating to workers’ rights,
ENVIRONMENT
INFRASTRUCTURE
even if this implied paying approximately 20% more for
products?
62%
49%
INNOVATION
9,6%
9,4%
7
6
DEFINING FEATURES
OF THE NATION BRAND
4
4,4%
3,8%
5
KEY DEVELOPMENT
ISSUES
SPORTS
59 57
INFRASTRUCTURE (TRANSPORTATION,
ENERGY, AND SANITATION)
46 43
TOURISM
42 53
SOCIAL INCLUSION AND POVERTY
65 51
FOOD CULTURE
38 38
ENVIRONMENT AND CLIMATE CHANGE
46 49
FESTIVALS
18 31
EQUAL OPPORTUNITIES
42 46
VIOLENCE
37 31
PRODUCTIVITY
56 34
HUMAN CAPITAL
25 22
GENDER EQUALITY
28 32
RAW MATERIALS
18 18
HUMAN CAPITAL
23 25
INNOVATION
OPENNESS TO THE REST
OF THE WORLD
13 14
INTEGRATION WITH THE REGION
AND THE WORLD
27 24
12 12
DO NOT KNOW/NO ANSWER
OTHER
THE DNA OF REGIONAL INTEGRATION
2
4
2
2
INNOVATION
DO NOT KNOW/NO ANSWER
25 24
1
6
107
ANNEX 2 / METODOLOGY
This section goes into more detail over the series of objective indicators that
we used throughout this study to contrast them with the results of the INTAL/
Latinobarómetro survey. We used the standard correlation measure in the formula below for this cross-referencing exercise, which, as we mentioned above,
does not imply a causal relationship:
where p is the correlation coefficient, made up of the covariance of variables
x and y in the numerator, and a denominator made up of the standard deviations of these same variables.
The value of the correlation coefficient thus ranged between [-1,1]. If p is equal
to 1, it indicates a perfect positive correlation, that is, a total dependence between the two variables, which occurs when one variable increases and the
other also does so at exactly the same rate. If p is between 0 and 1, there is a
positive correlation, while if it is between 0 and -1, the correlation is negative.
A value for p that is close to 0 indicates that there is no linear relationship.
The objective indicators selected for the comparisons were as follows:
• Share of exports covered by the five main products (%): based on INTRADEBID and including data from the close of this report that was gathered in 2014.
• Number of FTAs signed: based on the 2014 INTRADEBID report. The number
of agreements was counted rather than the number of countries with which
the agreement was signed—in other words, one treaty may include several
countries.
• Average MFN tariff (%): based on INTRADEBID, this is the normal nondiscriminatory tariff applied to imports (it excludes preferential tariffs contemplated in FTAs and other regimes that apply in the context of tariff-rate quotas).
The values available for 2014 were used.
• Herfindahl-Hirschman Index of export concentration: based on INTRADEBID, this is a standard measure of how economically concentrated a market is.
It was calculated using export values from the 2014 survey.
• Exports per capita (thousands of US$): based on INTRADEBID using 2014
data. The number of exports was divided by each country’s population.
• FDI (% of GDP): based on the IDB’s Numbers for Development database and
IMF databases.
THE DNA OF REGIONAL INTEGRATION
125
• Agriculture, hunting, forestry, and fisheries as a percentage of GDP: based
on the latest information available from UNCTADstats for 2015.
• Infrastructure competitiveness ranking: based on World Economic Forum
data for 2015. This indicator ranks transportation, energy, and communications
on a scale of 1 to 7 by combining public information on miles of road, numbers
of flights, telephone customers, and other variables collected through surveys
of business owners and technicians from each sector.
• Revenue from transportation, warehousing, and communication (US$ per
capita): based on the latest information available from UNCTADstats for 2015.
• Exports of high-technology products (% of exports of manufactured products): based on INTRADEBID and the World Bank. Data from the 2014 comparison uses the standard classification of goods with high, medium, or low
technology content.
• Fixed broadband internet subscribers (per hundred people): based on
World Bank data for the 2014 comparison.
• Revenue from international tourism (as a % of total exports): based on
2014 data from the UN World Tourism Organization.
• Homicide rate per 100,000 inhabitants: based on 2014 data from the United Nations Office on Drugs and Crime (UNODC), except for Nicaragua, Panama, and Bolivia, for which the most recent information is from 2012.
• CO2 emissions per capita (tons per inhabitant): based on the most recent
World Bank data (from 2011). Information provided by the Carbon Dioxide
Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory (Tennessee, USA).
• Carbon footprint (hectares per person): based on data from the Global
Footprint Network, the carbon footprint measures greenhouse gases emitted
directly or indirectly due to human activity, thus making it an indicator of
sustainable development. Data for 2015, available in the most recent report.
• Use of alternative and nuclear energy (% of total energy use): based on
data from the International Energy Agency; this is an indicator of alternative
energy use. Data for 2014.
• Electricity production based on renewable sources, excluding hydropower
(% of total): based on World Bank data with the most recent information
available being for 2013, this indicator measures the relative importance of
THE DNA OF REGIONAL INTEGRATION
126
renewable energies in each country’s energy mix. It is also based on statistics
and energy balance sheets from different countries.
• Total immigrants to other countries in Latin America: data for 2015 provided by the United Nations Department of Economic and Social Affairs, which
closely monitors the dynamics of the planet’s migration flows.
• Index of controls of the movement of people and capital: based on 2015
data from the Fraser Institute. This indicator has three components: foreign
ownership/investment restrictions, capital controls, and the freedom of foreigners to visit the country. This Vancouver-based institute creates this indicator based on parameters such as the difficulty of getting a visa or how easy
it is for foreign capital to acquire local properties.
• Gini coefficient: based on data from the IDB and the World Bank. This is the
standard measure of income distribution, taking a maximum of 1 for societies
in which income is highly concentrated and a minimum of 0 in places where
income is distributed absolutely equally. Data for 2012 and 2014 based on
information provided by the different countries in the region.
THE DNA OF REGIONAL INTEGRATION
127
NOTES
Although exports per capita and the importance of agriculture in the economy are indicators that
do not directly refer to investment, they point to some specific features of the region’s different
economies according to their investment preferences.
2
We refer to these data on each country as “national statistics,” although in some cases they come
from alternative sources outside the country itself, such as the World Economic Forum. The specific source of each indicator used is detailed in the methodological annex.
3
The 2016 survey was drafted with the help of those countries that took part in INTAL’s Summer
Colloquium, which was attended by government officials from Argentina, Uruguay, Brazil, Chile,
Colombia, Mexico, Peru, Paraguay, and the Dominican Republic.
4
Morlino (2011) observes that “cross-referencing the data sets” implies that there is no subordination between the two types of data.
5
The alliance between INTAL and Latinobarómetro is an RPG that institutions from different countries in the region are involved in. These include: Argentina’s House of Representatives; the government of the state of Minas Gerais, the Brazilian Legislative Institute and Brazil’s State Secretariat
for Social Advocacy; Chile’s Ministry of Foreign Affairs; Ecuador’s National Secretariat of Planning
and Development; the Oaxaca State Institute of Electoral and Citizen Participation and the Center
of Social and Public Opinion Studies at Mexico’s House of Representatives; Paraguay’s Ministry of
National Affairs; Peru’s Ministry of Foreign Relations; the Dominican Republic’s Central Electoral
Council; and Uruguay’s Ministry of National Affairs.
6
Latinobarómetro and ECLAC (2010) contained an initial attempt at cross-referencing data sets
on well-being and social inequality. We have addressed this matter in detail in INTAL (2016).
7
We have addressed this matter in detail in INTAL (2016).
8
See the Methodological Annex for more information on the indicators used. We will take these
results into account when designing future polls to design questions that correspond more closely to national statistics so as to be able to measure the same phenomenon from two different
perspectives more exactly.
9
Although exports per capita and the importance of agriculture in the economy are indicators
that do not directly refer to investment, they point to some specific features of the regions’ different economies according to their investment preferences.
10
It should be noted that the MFN tariff does not take the importance of linkages via preferential
agreements into account. A regional bloc may have a relatively high MFN tariff level but a large
share of preferential trade with low or zero tariffs. Likewise, tariff levels give no indications of
other sorts of measures that may restrict trade, such as nontariff barriers. As we explained in
INTAL (2016), the results presented here should be interpreted with the usual caveats for comparisons using these types of indicator.
11
Not all indicators reflect the specific integration bias of public policies as the only factor at work.
For example, medium- and high-technology exports are an indicator of the quality of exported
goods which is partly determined by the structure of each country’s comparative advantages,
which reflect factors that do not depend solely on public decisions.
12
The detailed methodology of the WEF’s Global Competitiveness Index used in the infrastructure chapter is described in http://reports.weforum.org/global-competitiveness-report-20142015/
view/methodology/.
13
This is an imperfect indicator as it may under- or overestimate the integration of technology
products into global value chains and we use it here with the usual caveats.
14
For more on this, see the conclusions of the experts that took part in Node i+i (Regional Integration + Social Inclusion) on the INTAL website (www.iadb.org/intal/nodoi [link in Spanish]).
15
Great Britain’s decision to leave the European Union (Brexit) is just one example of these trends.
16
Countries are classified based on the criterion used in the IDB Trade and Integration Monitor
(2015).
17
Support for democracy was measured through the following question: “Q. Which of the following
phrases do you agree most with? 1) Democracy is preferable to any other form of government;
2) In some circumstances, an authoritarian government may be preferable to a democratic one;
3)For people like me, there’s no difference between a democratic regime and a non-democratic
one.” Answers for the first option are displayed in the figure. Confidence in the government was
measured using the following question: “Please look at this card and tell me how much confidence
1
THE DNA OF REGIONAL INTEGRATION
128
you have in each of the groups, institutions, or people mentioned on the list: a lot, some, a little,
or none at all.” “A lot” and “some” are the only responses shown.
18
The difference between these and the 2015 results is due to a change in the phrasing of the
question. While in 2015 all respondents were asked what their perception of the impact of integration was, in 2016 only those that believed the country had attempted to integrate “a lot” or
“somewhat” with the world were asked it.
19
As mentioned above, this indicator ranged from 0 to 1: the higher the number, the greater the
concentration of the export basket.
20
As mentioned above, this trend does not indicate a causal relationship.
21
The higher the value of the index of restrictions on movement, the fewer the restrictions. See the
Methodological Annex for more details.
22
For more on this topic, see Serebrisky (2014).
23
See the dynamic infographic “Far Apart” on the INTAL Interactive site (link in Spanish) and Mesquita Moreira (2013).
24
For more on the impact of new technologies on trade and production, see INTAL (2015b).
25
One example of goods and services becoming inseparable is 3D printing, in which do-it-yourself
philosophy challenges traditional models for the sale, logistics, and transportation of goods. For
more on this topic, see INTAL (2015c).
26
We have examined these topics in detail in different issues of INTAL Connection.
27
INTAL (2015d) analyzes the ICT revolution and the impact of this on trade.
28
For more on this topic, see Casilda Béjar and González Silvestre (2002) and Aichner (2014).
29
González (2016).
30
The pursuit of energy-related innovation may not be associated with environmental issues but
with the need for alternative sources of energy, as is the case in several Central American countries. None of these correlations indicates a causal relationship.
31
The sources used for national statistics are listed in detail in the Methodological Annex.
32
INTAL (2015a).
33
For more on the size of the informal sector and its consequences on equality, see INTAL (2015a).
34
We address the composition of the index of the movement of people and capital in the Methodological Annex.
35
Data from the chapter on immigration-related matters from the 2015 survey were used. The
question was: “What impact do you think citizens of other countries coming to live in your country has? Do you strongly agree, agree, neither agree nor disagree, disagree, or strongly disagree
with these two statements: 1) Immigrants come to compete for our jobs, and 2) There should be
a law to stop immigrants from entering the country? * “Strongly agree” and “agree” are the only
responses shown.
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129
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Washington, DC: IDB.
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Gabel, M., Whitten, Guy D. 1997. “Economic Conditions, Economic Perceptions, and Public Support for European Integration.” Political Behavior 19 (1).
González, A. 2016 (forthcoming). “Sustainable Global Value Chains.” Integration and Trade Journal 41.
INTAL. 2015a. “The Map of Inequality in Latin America.” Integration and Trade Journal 39 (The
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INTAL. 2015c. “3D Printing: Impact on Production and International Trade.” INTAL Monthly Newsletter 225 (May): 16–21.
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Kettle, S.; Hernández, M.; Ruda, S.; Sanders, M. 2016. “Behavioral Interventions in Tax Compliance: Evidence from Guatemala.” Policy Research Working Paper, WPS7690. Washington, DC:
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Nissen, S. 2014. “The Eurobarometer and the Process of European Integration.” Quality & Quantity 48: 713–727.
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Serebrisky, T. 2014. Sustainable Infrastructure for Competitiveness and Inclusive Growth. Washington, DC: Inter-American Development Bank.
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