A tale of two Carlos'

Today the conference was in the form of three plenary sessions. I'll be honest, the first two were pretty uninspiring with a lot of chat around the growing importance of emerging markets - I mean, we're well aware of this. However, after lunch the final session called "Outside Perception v In Country Reality". Essentially, a discussion about tackling the negative perceptions some countries face.

On the panel were two guys named Carlos. Carlos Brago, an economist and former director at the World Bank, and Carlos Bronzatto, Director of WAIPA and former employee of APEX Brazil. Both could be Bond villains in their own right.

Carlos Brago opened the discussion with five points about how, in his experience, perception didn't matter. What really mattered were the following:

1. Time horizon - FDI is generally resilient and not fleet of foot
2. Type of FDI -  is it market driven, resource driven or efficiency driven
3. Regulatory Framework - humans are typically gloomy and a good framework gives some security
4. Transparency of Government
5. How does an investment sit in the global value chain

All very good, but then Carlos 2 basically said that the IPA in Brazil doesn't care about external ratings, or FDI opportunities in areas they already excel in. They are only interested in developing certain sectors they want to move into as a nation. As such, when they are mystery shopped by the World Bank with a potential Agri-Business FDI (Brazil is probably number one in the world in this field), the IPA performs badly and receives the country a poor rating.

Carlos 1 was appalled - so was I - this means that for some IPAs the concept of comparative advantage is irrelevant to them. Moreover, as an agency, they aren't opportunity driven. They have mistaken the sectoral focus of successful IPA activity as being the sole focus of the agency.

Hey ho!

Carlos 1 & 2 sitting centre.