Letter from the Editor in Chief
Welcome to the first issue of the Journal of Globalisation, Competitiveness and Governability in the Spanish American Region!
This publication addresses many of the concerns which exist in the region. We are currently witnessing great transformations which, if channelled correctly, rather than presenting a challenge, can become real and effective opportunities. For this reason, the journal is intended for those responsible for managing companies, or running private and public organisations and institutions: it aims to offer original ideas and innovative proposals which may contribute to improving the competitiveness and governability of Latin American companies and nations in a globalised world. It is also intended to serve as a reference point for the academic and scientific community in the region. It will therefore facilitate communications between the different Latin American academic communities, bringing them closer to and uniting them in the study of specific areas, duly analysed using theoretical contributions, practical examples and real case studies.
This achievement is possible thanks to the joint effort of Universia, a network run by Banco Santander which groups together over one thousand European and American universities, and the University of Georgetown. The partnership between these two institutions ensures that content of the highest quality and academic value can be distributed en masse over the Internet.
The main focal point of the journal is a reality which not only affects the Latin American region, but the whole world: globalisation. Having started out in the 19th century and relapsed after World War I, in the last three decades of the 20th century and the early 21st century, this process has accelerated due to advances in transport, the development of information technology and communications, and the spread of the ideology of the free market as a basis for economic development. This is a transnational phenomenon which envelopes economic, political technological and cultural relations, and at the same time, generates interdependence between states, businesses, organisations and individuals. In this way, globalisation has brought with it a speedy breakdown of barriers to the movement of ideas, capital and people, the opening of new markets, and the withdrawal of governments from economic areas.
At the same time, globalisation affects all countries, regardless of their economic, political or social situation. In this context, while states try to adapt their politics to new circumstances, businesses are introducing strategies for achieving an increasingly more integrated system at world level. The globalised world forces us to search for and develop the very best mechanisms for taking part in this process. Today, the argument over the pros and cons of globalisation has become insignificant and lacking in importance in the face of the huge need for determining the indispensable conditions under which countries, businesses and individuals can truly benefit from the process.
Competitiveness thus becomes a vital instrument for meeting this goal. It is the response to the challenge posed by exacerbated competition on global markets and, at the same time, it allows us to correct the inefficiencies which globalisation cannot accept, due to the scale of its effects and its rapid and irreversible advances. Indeed, the dynamics of globalisation, accentuated by the technological phenomenon, has increased the number of commercial and financial transactions and consequently, competition on the markets. From this perspective, globalisation requires the transformation of production systems and the adaptation of strategies to encourage stronger competitiveness.
However, both globalisation and competitiveness are fundamentally ruled by market forces, which drive the introduction of significant changes to improve efficiency and thus reap the benefit of globalisation. The responsibility for stimulating these transformations falls not only on the private sector, but also on the State.
In this regard, one of the factors which guarantee the consolidation of a competitive environment is the strengthening and improvement of governability, and the subsequent re-dimensioning of the State. It is not a question of dismantling state institutions, but of refocusing their public policies so that they do not limit the field of manoeuvre for businesses, and instead ensure their full integration into a dynamic global society, full of opportunities. Protectionism and isolationism are therefore left behind, replaced by processes of liberalisation and deregulation. The State must also create an institutional framework which guarantees transparency and stability for transactions between economic and social players. The State thus renounces its leading role in the development of the country, and merely lays the appropriate foundations in order for businesses to reach the required levels of efficiency in order to compete on a globalised market.
This first issue contains eight articles of a diverse nature which cover practically all the areas studied by this publication. In the first article, Carl Dahlman presents the debate about the challenges of the knowledge economy for Latin America. In particular, and using data published recently by the World Economic Forum, he argues that the key to achieving sustained development is to invest in education, in the strengthening of the ability to innovate, and the development of information technology infrastructures, which are jointly known as the "Awareness Economy". He also recommends increasing investment in traditional physical infrastructure in order to play a more efficient role in international trade. All these arguments are sustained based on specific data and figures from the different Latin American countries, examined from a historical perspective.
In the second article Hausmann and Sturzenegger, making use of an innovative methodology ("dark matter"), explain that official statistics underestimate the balances in the economics of commodity- producing countries; demonstrating how these countries have actually seen considerable losses of capital (deficits) rather than the acclaimed superavit resulting from the recent surge in the sale of commodities. According to the data used by the authors, since 2002 Latin America has collected almost 300 thousand million dollars in overseas debts, which is a far cry from the superavit reflected in official figures.
Next, Álvaro Cuervo-Cazurra describes the recent expansion in Latin American multinationals, resulting from the processes of economic liberalisation in the 1980s and 1990s. He maintains that this liberalisation brought with it the internalisation of regional companies and consequently has allowed them to compete globally, improve their capacity and contribute to the development of their country of origin.
The fourth article broaches the subject of hemispheric security in Latin America. John Griffiths explains in detail the different meanings and implications which have been attributed to the term "security". Over the course of the article, the author outlines the content of the concept and distinguishes it from others, and ends by bringing it round to certain areas of State action. In Latin America, the disparity between the different processes of state consolidation and development has led to the "securitisation" of problems which bear no relation to the concept in question, and consequently, to the use of inappropriate state resources in order to solve them. For this reason, the author presents a proposal which, in his opinion, really does rise to the challenges currently face by the different states in the region.
The fifth article, by Benito Arruñada, offers a critical assessment of some of the instruments drawn up by international organisations to support development (such the Doing Business reports published since 2004 by the World Bank) which promote reforms tending towards the simplification of business creation processes. In this sense, and based on specific cases, he affirms that reforms to the processes required for setting up a business, instead of being limited to a reduction in cost, time and number of processes, should give priority to the value of the information provided by public records for users.
In the sixth article, the President of FAES Aznar, after a diagnosis of the political, economic and social reality in the region, sets out his "Ideas on Freedom for the Crusade in Latin America", outlining an agenda of proposals focused on prosperity in the region
In the seventh article, Ángel Arroba, Javier Santiso and Pablo Zoilo, using data from the Organisation for Economic Cooperation and Development (OECD), analyse the impact of tax regimes on democratic legitimacy, a determining factor for development in Latin America. They conclude that Latin American countries, in their efforts to improve tax systems and reinforce democratic governability, should bring back the political dimension of taxation activity in an explicit and transparent manner.
Finally, in the eighth article, Veneta Andonova presents two strategies for counteracting the government failings in guaranteeing the right to private investment. The first involves the use of technologies which are less vulnerable to institutional under-development. The second, relating to human resources management techniques, businesses implement motivation policies, including employee co-ownership schemes, in order to guarantee their own ownership rights. Both of these strategies are illustrated with specific examples.
