November 2020 ALABC E-Newsletter
On the 12th November 2020, an MOU was signed between ALABC and the Chilean Federation of Industry (SOFOFA) for the establishment of the Australia-Chile Business Council (ACHBC). The ACHBC will provide a regular platform for a more systematic approach of cooperation, coordination and consultation for the private sector. The mandate of this new organisation is to explore new ways to expand and deepen the business links between the two countries.
This strategic alliance with SOFOFA, represents unique opportunities for the members of ALABC to access key players and decision makers in the Chilean private sector. Given Australia’s outstanding success in managing the current health crisis and the current economic stability, medical and economic conditions in place, there has never been a better time for Chilean companies to explore investment opportunities in Australia.
Chile is home to over 200 Australian companies, of which over one quarter are listed on the ASX200. This is by far the largest Australian presence in Latin America. Some of the Chilean companies already present in Australia are Antofagasta Minerals, SQM, Duratray, ENAEX, Latam Airlines, Arauco and CMPC. In 2009, Chile became just the fifth country in the world to sign a Free Trade Agreement with Australia.
As a member of ALABC you can join this Advisory Group just by simply editing your member profile here:
The Board of ALABC would also like to recognise the importance of diversity and inclusion when delivering our services to our members and stakeholders. We strive to ensure commitments are made between cross cultural, institutional, societal and organisational departments with our members, industry partners, government agencies and the broader community. We will actively engage in promoting our vision and goals and its connections to the business environment between Australia and Latin America.
Currently, the ALABC board is comprised of 30% women and 50% of our permanent staff is female. ALABC is proud to continue to grow and establish relationships with all individuals who want to develop stronger economic ties between Australia and Latin America.
Finally, I would also like to draw attention to the Council on Australia Latin America Relations has opened a new Special Grant Round which replaces the 2020-21 grant round postponed earlier this year due to the impact of the COVID-19 pandemic.
The Special Grant Round has the focus theme of ‘Economic Recovery’ and will support innovative activities that use digital technologies to strengthen relationships between Australia and Latin America and contribute to COVID-19 economic recovery. Please click here for more information.
We hope you are all keeping safe and well in the lead up to the holidays and I look forward to hearing any feedback regarding potential business ventures for 2021.
Chief Executive Officer
Australia-Latin America Business Council
Read full newsletter here.
The establishment of the joint business council between the Australia-Latin America Business Council and the Chilean Federation of Industry.
On November 12, a Memorandum of Understanding (MOU) was signed between the Australia Latin America Business Council and the Chilean Federation of Industry (SOFOFA) for the establishment of the Australia-Chile Business Council ACHBC), to foster closer friendship and promote economic, trade and investment between Australia and Chile.
The signing ceremony was co-hosted by the Chairman of the Board of Directors of ALABC Mr. Richard Andrews and by the President of SOFOFA Mr. Bernardo Larrain and included the participation of the President of the Australian Chapter Mr. Andrew Phillips and by the President of the Chilean Chapter, Mr. Ramon Jara and the Vice-Presidents of both Chapter Mr. John O’Donogue and Mr.Pablo Altimiras along with the respective members of the boards.
Special mention to highlight the presence of H.E.Patricio Powell, Ambassador of Chile in Australia.
In his welcoming remarks the President of SOFOFA Bernardo Larrain highlighted that the signing of the MOU marks a new milestone in the consolidation of the business relations between Australia and Chile and that the main objective is to provide a regular forum for a more systematic bilateral business promotional initiatives that lead to increase trade in goods and services and investment between the two countries. He added that “the current trade and investment figures demonstrate that the existing potential remains largely untapped. An essential role for the Australia-Chile Business Council it is to encourage investor confidence and strengthen relations to establish the bases for stable growth that is beneficial for both countries”
The President of ALABC, Richard Andrews mentioned that this is the first binational business advisory group created by ALABC . The bilateral business councils are unique instances of private sector cooperation, coordination and consultation whose objective is to increase business between two countries. They are made up of senior businessmen and executives of companies that have significant investments or trade flows with the countries that act as counterparts.
They are an effective tool for business diplomacy and complement the efforts made by DFAT, ALABC along with key industry player such as COALAR (lead by Alberto Calderon), Austrade, Global Victoria, Trade and Investment Queensland and their Chilean counterparts.
Andrews also mentioned “Latin America has been growing in economic importance for Australia in recent years. Chile, for example, in 2009 became just the fifth country in the world with which Australia entered a free trade agreement, and this basis for exchange has only been bolstered through both countries’ membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – an accord that also includes Mexico and Peru.
Clean energy and green hydrogen are a major focus for the Chilean government and industries are wanting to attract and partner with Australian energy technology exporters on new projects.
Online commercial platforms are gaining traction for tech companies that can focus on digitalisation solutions. That's where we see new and emerging sectors for Australian companies. With the new Asia and South America digital gateway (submarine cable) connecting Australia and Chile, plus the 5G networks rolling out across the region, provides new opportunities for data driven businesses.
Mr. Andrews Phillips added that “ the road is long, the challenges are great and the goals are ambitious. Although the Australia-Chile Free Trade Agreement signed in 2009 allowed for an important advance, which was deepened when both countries granted tariff preferences to almost all products, this is still insufficient” .
“ The importance of the MOU signed between the two industry bodies, through which an strategic alliance is established represents a unique opportunity for Australian companies to access key players and decision makers in the Chilean private sector. On the other hand, there has never been a better time given the reasonable success that Australia have had in managing the health crisis caused by Covid-19, the relative stability, medical and economic, offered by Australia, to explore opportunities here”.
Pedro Reus, Chief Executive Chilean Chapter
Marcelo Salas, Chief Executive Australian Chapter (0412643343)
Currently, SOFOFA has established 15 bilateral business councils and the business council of the Pacific Alliance.
Some of the Chilean companies that have a presence in Australia are: Duratray, Latam Airlines, SQM, Antofagasta Minerals, ARAUCO, CMPC, Davey Bickford Enaex, Downer Blasting Services, Covalent Lithium.
SOFOFA is a non-profit trade association that brings together companies and associations related to the Chilean industrial sector.
It brings together about 4,000 companies, 48 industry associations and 22 regional business associations. All these members together comprise 100% of Chile's industrial activity and 30% of GDP.
Its political independence, soundness of principles, technical approach and prestige of its leaders, has allowed it to achieve an important place in national life, and is listened with respect by governments and political, economic and social sectors.
ALABC ALABC was established in 1989 as a Non-for Profit association and our membership is comprised of companies and organisations ranging from large multinational corporations to education and research institutions, SMEs, sole traders and professionals, who are at the forefront of forging business relations between Australia and Latin America.
An Australian citizen or a permanent resident can apply for a travel exemption to leave Australia if they meet at least one of the following:
An applicant must provide evidence to support their claim, for example a letter from their employer, or other evidence that they are travelling for an essential business reason. Further information regarding exemptions for Australian citizens and permanent residents can be found on the Department of Home Affairs’ website.
For non-citizens, the Commissioner of the Australian Border Force may grant an individual exemption if they are
An individual can submit a request for a travel exemption under this category or a business can submit a request on their behalf. Further information on travel exemptions for non-citizens can be found on the Department of Home Affairs’ website.
Key takeaways from the Australia-Latin America Business Networking Event 2020
“Latin America: Diversify your Growth”
Co-hosted by ALABC and COALAR.
Wednesday 14th October 2020
Richard Andrews: Chairman ALABC
Initial comments about Latin America:
Latin America has been growing in economic importance for Australia in recent years. Chile, for example, in 2009 became just the fifth country in the world with which Australia entered a free trade agreement, and this basis for exchange has only been bolstered through both countries’ membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – an accord that also includes Mexico and Peru. More recently, Australia signed an FTA with Peru.
ln addition to such agreements, the increased trade between Australia and Latin America has been stimulated by a gradual move by both sides away from their traditional reliance on exporting primary products and towards services and manufactured goods. As global commerce and trade become more and more digitised, particularly amid the potential long-term transformations brought about by Covid-19, exchange between these increasingly service-based economies could no doubt be accelerated.
Mr. Alberto Calderon: MD and CEO of Orica, takes over as the new Chairperson of the Council on Latin America Relations (COALAR):
Mr. Alberto Calderon made his first official speech as COALAR’s Chair at the Australia-Latin America Business Networking Day, on the 14th October 2020.
The new Chair of COALAR mentioned the close relationship and dependency, that exists between Australia and Latin American countries, especially in the resources industry, where collaboration in areas such as the environment, productivity and many other fronts have been mutually advantageous and worth continual exploration.
In that sense, he expressed his willingness to continue partnering with ALABC in bringing together, government and businesses to discuss the important issues of diversifying markets during these extraordinary times.
Mr. Calderon also announced a special grant round targeting COVID-19, with a specific focus in digital technologies to assist in the recovery of business between Australia and Latin America. The official call will be published on the DFAT website.
Eduardo Suarez: Vice – President Latin American Economics at Scotiabank:
Latin America is the region where Scotiabank has chosen to expand very aggressively prior to operations in Toronto, Canada and Australia. Currently, the Bank has more than 60,000 employees based in the Latam region.
What do we like so much about Latin America?
In spite of going through challenging times, Eduardo believes that there are some very attractive long-term dynamics in the region that make it very attractive as a long-term investment opportunity. It's a region that can be characterised as being part of the global middle class, a very large market that is attractive for multinationals.
For many consumer brands, when you break the US $5,000 in terms of income, a market becomes an attractive opportunity for non-durables. In the Latin American region, most of these countries have an income between $5,000 to $20,000. Most of the region is over the $10,000 mark, thus becoming very attractive for durables as well.
Just looking at five of the largest markets in the region, the growth in population will add 65 million new consumers over the next 30 years. With today's income level, that would be equivalent to creating a new economy the size of Colombia, Singapore or South Africa.
The increase in the size of the Latin American market will be largely noticeable.
Women in the labour Force:
Women have an extremely strong influence in Latin America and the increased participation of females in the formal labour market has been overwhelming, especially for countries such as Peru and Chile. Due to this, this means that the capacity of households to consume has drastically increased. The same situation applies to countries such as the Dominican Republic, Costa Rica, Panama and numerous other countries that manage to convert from a country of $3,000 of income per capita to over $10,000, in just a couple of decades.
Well-funded social security systems:
The pension reforms developed in Chile in the 1980’s and exported to majority of the region where each individual makes mandatory contributions to his/her own saving account, has created a diverse pool of domestic savings, which in turn has allowed interest rates in the region to fall, affecting consumption dynamics in the region. Now these countries have the capacity to take out debt in their own currency at fixed interest rates for much longer, which increases the demand and supply of durables such as housing and cars.
Chile, Colombia and Peru entered the crisis with very strong growth dynamics and prospects; therefore, the expectation is that growth will start strong for the recovery next year.
As the region entered the COVID crisis, countries such as Colombia, Peru, Chile, Costa Rica and the Dominican Republic have had very prominent growth dynamics and growth prospects, while other countries have experienced growth challenges, burdened by the government’s debt to GDP ratio.
Countries including Brazil, Mexico and Argentina have been negatively impacted by COVID-19, but they have strong fundamentals and large markets, making these countries desirable for Australian companies to consider doing business with.
Many countries in the region have agreements with other countries such as Australia, Canada, Europe, United States, Japan and China which protect investors and also display an attractive investment destination at a time when, when global politics is making us question assumptions that have not been questioned in the past.
READ FULL ARTICLE HERE
The Export Council of Australia (ECA) has created this Webinar with the support of Austrade to assist food & beverage (F&B) exporters using FTAs and accessing LATAM markets.
Hear from key industry experts, successful Australian exporters, and relevant trade commissioners who will address questions and guide you through the process of making FTAs relevant for you.
The discussion will provide you with specific market entry tips and tricks to your chosen destination.
Watch full video here: https://www.youtube.com/watch?v=eoKTtMC3Nkw&feature=youtu.be&ab_channel=ExportCouncilofAustralia
Cross-border collaboration for the achievement of the United Nations 2030 Agenda: Australia and Latin America lessons on sustainability
Project Lead: Isabel B. Franco and John Mangan
Research Assistant Team: Tahlia Smith, Daniel Nieto and Dayana Jimenez
Advisory Team: Jessica Gallagher, Marcelo Salas and Rachael Kelly
The University of Queensland
Australia-Latin America Business Council (ALABC)
Industry Partners: Orica, Embassy of Peru, BHP Foundation, South Pole, MMG, Geovia Dassault Systemes, CSIRO and Santos
With the year 2020 drawing to a close, the achievement of the United Nations (UN) 2030 agenda is now more critical than ever. However, the only way to achieve this goal is by promoting greater international cooperation and collaboration related explicitly to the 17 Sustainable Development Goals (SDGs) outlined in the agenda (Babier, 2018; Franco et al; 2018 UN, 2018;). While Australia and Latin America (LATAM) are on distinct sides of the globe, continents away from each other, the partnership and knowledge sharing between these two regions in areas of sustainability create cross-border learnings that have a positive impact on both regions as well as the world as a whole. While the achievement of all SGDs is essential in order to achieve a sustainable future for all, this policy brief will focus on the following three SDGs which have a particularly strong link between industry and sustainability:
Read full article here: Policy Brief October 2020 UQ -ALABC (1).pdf
ALABC’s purpose is to help our members succeed in doing business in Latin America, therefore an important component of our work is to promote the best policies to advance trade, investment and business engagement with the region.
This interactive session included six ALABC members including: Valeria Alvano, Latam Airlines Group, Paola Lasso, Newcrest Mining, Rongyu Li, University of Queensland, Professor Adrian Little, Pro-Vice Chancellor International, The University of Melbourne, Lorraine Meldrum, Swann Global and Melanie McFarlane, Veta Education.
The opening of the boarders is a key element for the long term expansion of the mining, oil and gas industries in Australia, as it relies on advances and investments in science and research and attracting specialised skills that are not currently available on-shore.
It is essential for our economic growth, to keep attracting international skilled migration and talent. International students represent a great opportunity to grow our wealth of knowledge and diversify our trade partnerships around the world. Currently 81,000 students from Latin America are enrolled in Australia’s education system.
In Australia, 65% of engineers are from overseas. These individuals are comprised of highly skilled Latin American engineers who cannot always achieve the advanced English levels required to obtain an invitation for permanent or even temporary residence. It does not make sense to not offer those international students who remain onshore in Australia, a clear pathway for permanent residence.
There are significant benefits for this two way traffic, for example, The University of Queensland Sustainable Minerals Institute is working in Chile with academic institutions and the mining sector, in collaboration with knowledge transfer and sharing best practices to make sure that mining is developing in a sustainable, environmentally, socially and morally friendly manner.
Global mobility is the way of the future despite, or perhaps because of, the pandemic, and those coming to Australia may not always seek to remain here, rather utilise it as a means to further their opportunities elsewhere, creating global economic diversity.
1. 2020 is a fateful year. All countries are facing grave circumstances that are affecting the international economy as a consequence of the Covid-19 Pandemic. I will not be the only one to point out that the projections of the fall in global GDP would be -4.5% by 2020.
Latin American economies reached the pandemic, with the exception of a few cases, after half a decade of minimal growth. In the first quarter of 2020, GDP was already negative in nine out of twenty Latin American countries as a result of low external demand, with China in the midst of the crisis at the time.
During the first half of the year and part of the second, the pandemic restrictions, with the consequent partial or total paralysis of the production of goods and services, only aggravated that negative figure. In addition, household spending deteriorated as a result of the mandatory confinement imposed by the authorities in many countries, and household inflows fell resulting from the loss of sources of work.
In parallel, Latin America has suffered a significant deterioration in its prospects abroad, both due to falling commodity prices – which remains its main source of foreign exchange – and because of the crisis in its main commercial partners.
According to the United Nations, food and metal exporting economies will be less affected, and the good news is that unlike other major recessions in the past, the economic slump is not yet producing a domino effect on banks. The financial crisis seems, for now, to be ruled out. Inflation is also under control except in a couple of countries that have been dragging their own inflationary dynamics long before Covid-19 began to sound in the media.
3. This second half of 2020, the international economy experienced a slight uptick as a result of the relaxation of strict containment measures and confinement in the peak months of Covid-19 in many countries and the consequent economic revival.
We hope that if there is a resurgence of the pandemic in the coming months, this slight recovery will not be affected in the eventuality of the implementation of new restrictive measures.
At global level the economic growth is expected to reach 5% by 2021. However, all this is still uncertain and depends on the evolution of the pandemic and the availability of a vaccine.
According to a last analysis of the Focus Economics Consensus Forecast LatinFocus, the projected growth of GDP in Latin America will increase, on average, 4.1% in 2021, 2.9% in 2022 and 2.8% in 2023.
4. We must now work on building confidence for recovery.
To do this, countries are adjusting strategies for economic reactivation, flexibility in fiscal and financial support policies, employment, and strengthening the health sectors, among others.
The objectives and priorities set out are to continue efforts to contain the pandemic and mitigate its impacts, to support individuals and businesses to overcome the consequences of the pandemic, restore the economy and return to normal in the region.
5. I thank ALABC for the digital meetings it holds, which prove that it is possible to realise economic connectivity, create a productive and business environment, and take advantage of new opportunities.
I also thank those who have preceded me in the floor for giving impulse to the Australia-Latin American relationship, and for agreeing that it is important to respond to the immediate impact of the pandemic by keeping goods and services markets and investment open, and supporting the central role of trade in the economic recovery.
Thanks, ALABC for working on new initiatives in the context of the economic recovery.
Thanks, Australia, for remind us that is a global and moral responsibility, that the vaccine must be share far and wide, safe, available to all, and affordable to all.
Thank you all of you again, and now I have the honour to give the floor to our esteem Minister of Trade, Tourism, and Investment, Senator the Honourable Simon Birmingham.
Latin America is ready to answer your calls, dear Minister.
On Oct. 25, Chileans will vote to reject or approve the start of creating a new constitution. The citizens of more countries should do the same. The country’s current Constitution, written under the authoritarian rule of the dictator Augusto Pinochet, has protected conservative interests and the military and has suppressed political dissent for 40 years.
Chile’s struggle with its authoritarian past is not unique. Countries with recent democracies like Myanmar, South Korea and Turkey have operated under authoritarian constitutions for years or even decades. My research indicates that more than two-thirds of political transitions to democracy since World War II — in more than 50 countries — occurred under constitutions written by the outgoing authoritarian regime. In some countries like Argentina that have flip-flopped between democracy and dictatorship multiple times, several democratic transitions have been guided by authoritarian-penned constitutions.
Persistent authoritarian influence under democracy is a recipe for inequality and democratic discontent. Democracies with authoritarian-era constitutions have weak political accountability and not enough citizen involvement in forming policies. And their political systems favor elites tied to the former regime rather than common citizens.
Inequality in Chile is at similar levels to the Pinochet era, while influence peddling by the wealthy — some of whom gained their fortunes through connections with Mr. Pinochet and insider privatizations — is pervasive.
Read full article here: https://www.nytimes.com/2020/10/19/opinion/chile-constitution-referendum-protests.html
A water molecule is composed of two hydrogen atoms and one oxygen atom. Through a chemical process known as electrolysis, the hydrogen atom can be separated from the water molecule and used as fuel. When this process is fed by renewable energy, it produces what is known as green hydrogen — a clean, zero-emission fuel that is environmentally friendly.
Chile has great potential for developing green hydrogen thanks to our country’s increasingly renewable energy matrix. This matrix is the result of Chile’s tremendous natural resources for generating solar and wind power, such as the Atacama Desert in the north and the winds blowing along our thousands of kilometers of coastline.
Green hydrogen, also known as the “fuel of the future”, will play a fundamental role in achieving Chile’s goal of carbon neutrality by 2050. Estimates suggest this power source could mitigate carbon dioxide emissions by between 17% and 27% by that date and will help us reduce our dependence on fossil fuels like oil and gas.
According to the Energy Ministry, the domestic green hydrogen industry could become a new hub of progress for Chile, similar to today’s copper industry. Currently, the government is working on a National Green Hydrogen Strategy, to be presented in November. Once unveiled, Chile will join the small group of countries with a road map on this topic, which is key for sustainable economic development and environmental protection.
Read the full article here: https://marcachile.cl/en/chiles-enormous-potential-for-developing-green-hydrogen/
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