William Cho
World News /22 Mar 2014
03.22.14

Latin American Liaison: A Pursuit for Indian Ascendency?

Despite experiencing soaring economic growth rates, Latin America remains one of the most unequal regions in the world. Tax rates in Latin America are regressive and have done little to fill depleted coffers following the economic recession. Most Latin American countries have very high rates of literacy but high drop out rates. Education across Latin America countries is considered to be poor quality by many experts. With few leaders who stand out, the region has a leadership crisis. Public policy in the region has focused on combating poverty without considering its systemic relationship to inequality. Urban areas benefit more than rural areas from the provision of public goods and infrastructure. The poor generally do not have access to bank accounts. Race and ethnicity often determine inequality. African descendants and indigenous groups often constitute the majority of the underprivileged.

However, despite these problems other countries and regions can learn from the Latin American experience. India would do well to replicate some of the same policies. There exists a great deal of similarity between the economic and the social situations of India and Latin America. The quest for a permanent seat in the United Nations Security Council has encouraged India to elevate its human and economic development. The Indian economy has been underperforming in terms of dollar rates considerably for quite some time now. Latin America can provide the Indian government with greater fiscal space and serve as a source of growth. It can also help India counterbalance its love-hate relationship with China.

There are many areas, where a successful league between India and Latin America can be exceptionally beneficial as both have a lot to teach and learn from each other. Thousands of International students crave admissions into Indian Institutes of Technology and Management every year.

India annually produces the highest number of engineering graduates. The scope of syllabus of the Indian schooling system is an excellent balance of theory and practise and is always open to amendments for improvement. Large scale student exchanges will not only enhance the system of Latin American schooling for children and teenagers but could teach technical skills to the masses of unskilled Latin American adults.

Brazil’s expertise in agriculture could very well be used in India, and Brazilian products such as soy and processed foods are in growing demand in India. The Indian Council for Agricultural Research (ICAR) has started to engage with its Brazilian counterpart EMBRAPA, probably the most advanced research institute on agricultural productivity in the world. In the context of food security, Brazil could be important to India and could probably usher in a ‘New Green Revolution.’

The Ministry of Science and Technology of India is also strongly focused on South-South cooperation. India currently has 73 bilateral cooperation agreements with Brazil, and uses a range of instruments in its collaborations, including: exploratory scientific missions, workshops, joint research projects, development centres, and advanced training fellowships. Shared health concerns are reflected in the prioritization of India’s governmental collaboration programs with Brazil, where the focus seems to be heavily on communicable diseases like HIV/AIDS and cholera. India-Brazil cooperation in medical biotechnology has had a promising start with some very encouraging results. However, in terms of precise product development there is much more to accomplish.

India has been blessed with a booming Information Technology sector. Indian companies have focused on investment and joint ventures in the Brazilian Information Technology sector. Multi National tie ups in this sector can be mutually beneficial to both countries and enhance employment for millions. India has yet to sign a complete Free Trade Agreement in Services with Latin America, directly or through Regional Integrated Blocs, which would further boost Information Technology Diplomacy.

The North Cuba Basin is a rich source of oil. Cuba also has the world’s second largest reserves of nickel. The Chuquicamata mine in northern Chile is considered the world’s largest open-pit copper mine. Brazil, Peru, and Bolivia are major producers of tin, Lead and zinc. Many Indian companies have already started working in the region to harness these resources; however most of those companies are multinational in character whose dividends are often mainly appropriated by foreign stake holders.

In recognizing the need to provide basic amenities such as shelter, drinking water and sanitation to the Haitian people, India joined Brazil and South Africa in expanding IBSA, the India-Brazil-South Africa Trust Fund’s waste management project in Haiti, both in its area of coverage and the scope of handling different types of waste. It is time India and Haiti form a forum or other form of collaboration or associations with countries like Japan who have dealt with disaster management in the past, so that both nations can minimize the losses incurred through disasters.

Costa Rica, the ‘greenest’ country in the world and a pioneer of ecotourism is home to a rich variety of plants and animals. Another tourist fantasy, Nicaragua has also seen its foreign direct investment increase by 79.1% from 2007 to 2009. Many high-value tree species, such as mahogany and rosewood, are native to the rain forest, especially in the Amazon River basin. Ecotourism based collaboration with Costa Rica, Nicaragua and the rest of Latin America would be a great market for adventuresome Indians and bring in great revenues for the country.

Brazil is going to host the 2014 Soccer World Cup as well as the 2016 Olympics, which will open ways for a large scale foreign direct investment in Latin America. Brazil has made tremendous strides in sports, specifically football. India can obviously collaborate on this front by matches like premiere leagues, exchanges of coaches and the promoting of coaching courses between the two countries.

Many Latin American artists have already made successful entries in Bollywood. The glamour industry itself in Latin America is still lagging behind its true potential, due to the lack of effective investments. Production of reality shows and other entertainment projects based on the collaboration of the two countries will bring both together culturally and give a break to thousands of tallented individuals and enhance employment. Shopping hubs, Multiplexes and other amenity centres can be sources of huge revenue for both countries.

The system of reservation in education and employment is a unique feature of Indian governance, which has uplifted thousands of people, who might not have otherwise had access to improved living standards. Latin America can adopt such a system, for its development. In fact, recently, the Brazilian government has been said to set aside a quota of 12.5% of university places reserved for the black and indigenous students. The success of this programme called ‘Brazil Sem Miséria,’ aims to eradicate extreme poverty in Brazil would inspire other Latin American countries to take up similar initiatives.

India, will no doubt suffer setbacks while trying to achieve its long harboured dream of attaining leadership in the global south through the Latin American lane. There is no direct means of transport between India and Brazil, the most dominant Latin American stakeholder of Indian ambitions. The services provided by the state are inadequate to serve a rapidly growing trade facilitation agenda. Scarce human resources, weak infrastructure and evaluation systems adversely affect the reform agenda needed to expand institutional arrangements. Poor project preparation in the public sector matches a weak private sector adversely affected by chronic shortages of human resources and limited access to technology.

It is up to the International Monetary Fund to implement an optimal monetary fiscal policy, which will help Latin America reap the benefits of capital inflows through accommodating a balance between capital inflows and avoiding financial excesses. It should also prepare the economy for external uncertainties reduce dependency on commodities and lay emphasis on services. Tax systems need to enable survival during periods of serious budget constraint. Land redistribution projects like the Columbia legislation should be expanded. The introduction of the Partido Trabajadores has promoted direct representative governance and should be encouraged.

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