On December 15, 2022, CIPE hosted How to Generate an Accountable Investment Environment, a virtual event that featured panelists Henry Oporto, Sascha Hannig, and Demian González Chmielewski. All participants are experts on the corrosive impacts and structural damage of unregulated foreign investment in Latin America. Henry Oporto and Demian González Chmielewski are senior managers at Fundación Milenio and CIPPEC (respectively), two of CIPE’s regional partners. Sascha Hannig is a Chilean assistant researcher at the University of Hitotsubashi in Tokyo, Japan. The conference centered around a discussion of how to transform corrosive capital into constructive capital that promotes accountable foreign investment, specifically in Bolivia, Argentina, and Chile.
Mr. Oporto shared his insights regarding the unstable political and financial state of Bolivia. He explained that Bolivia has weak democratic institutions that are incapable of upholding the rule of law. Consequently, Bolivia presents very little reward and very high risk to investors. Mr. González Chmielewski contributed to this conversation by detailing how Argentina does have a robust regulatory framework embedded in the country’s democratic institutions; however, rules and regulations are poorly executed and inconsistently applied. This has led to multiple instances of national-level failures to effectively monitor foreign funded projects. The absence of oversight in these projects has resulted in a series of environmental, social, and financial disasters for Argentina.
To explore the harmful effects of corrosive capital at a macro-level, Ms. Hannig spoke about the reality that in Chile – and across Latin America – there has been a drastic decline in public support for democracy and an increase in support of authoritarianism. This alarming shift in opinion is due to countries like Chile’s failure to deliver social, economic, and developmental benefits to citizens. To avoid a complete rejection of democracy in the region, all speakers emphasized the urgent need to close governance gaps in Latin America. Rather than accept money from any giver, recipient countries must be diligent in investigating the source of the funding, monitoring the project in its entirety, and encouraging transparency at all project levels. By creating a virtuous cycle of investing – constructive capital leads to more prosperous countries, prosperous countries attract more constructive capital – Latin American countries have the potential to not only bolster their economies, but also demonstrate to the public that democracy is a positive, beneficial form of government.
- Opening and Closing remarks: John Zemko and Catherine Gibson
- Constructive Capital Presentation: Eric Hontz
- Sascha Hannig, Researcher, Hitotsubashi University
- Demian González Chmielewski, Coordinator of Public Management, CIPPEC
- Henry Oporto, Project Director, Fundacion Milenio
- Moderator: Sergio Guzmán, Director, Colombia Risk Analysis