P R E M I E R ISSUE:FOCUS O N L ATIN AMERICA JULY 2011
Focus on Latin America 6 COVER STORY – Latin America: Economic Juggernaut 8
8 Editor: Andrew Rasanen, VP Phone: 212.782.4124 Email: email@example.com
Contributing Writers: Stacey Escoffery, Beth Gilroy, JJ Ko, Elizabeth Lyman, Ellen Zentner
Crossroads magazine is published quarterly for employees of The Bank of Tokyo–Mitsubishi UFJ Americas Corporate Communications Group 1251 Avenue of the Americas, 15th Floor New York, NY 10020 © 2011 BTMUA
FEATURES BTMU Americas Raise More than $660,000 for Japan 18 Shredding to Go Green and Protect Information 23
Employee Engagement 31 Union Bank Exchange 33 Preparing for the Unexpected 35
More Space to Help the Needy 26
26 DEPARTMENTS PROFILES: Marceliana (Celia) Butardo: Diligence and Faith 37 Naoya Hiramatsu: Transparency and Accountability 39 Victor Torres: Company, Country, and Family 41
Send us your photos 43 1923: Magnitude 7.9+ on the Richter Scale 45
JUG GER NAUT Contributors:
E l l e n Z e n t n e r, E c o n o m i c R e s e a r c h B T M U N Y M a s a r u N a k a y a s u , B T M U B r a z i l , E x e c u t i v e D i r e c t o r, C h i e f E c o n o m i s t , a n d H e a d o f F u n d M a n g e m e n t
espite carrying a higher investment risk than their developed market counterparts, emerging markets faired better over the Great Recession compared to the S&P 500. And within the grouping of emerging markets, Latin America’s performance has been exceptional. The region’s growth comes on the back of its stronger internal markets, political stability, and solid economic fundamentals. Latin American countries responded promptly to the global financial crisis by implementing stimulus measures funded by improved fiscal positions and build-up of international reserves. Growth forces are now being driven by a rising domestic middle class, private investment, and commodity exports.
Brazil Brazil is the world’s seventh-largest country and the largest in Latin America on a purchasing power parity (PPP) basis. It enjoys a stable government with pro-growth policies. In 2010, Brazil’s Gross Domestic Product (GDP) advanced by an eye-popping +7.5%, though growth is expected to slow to a more sustainable rate close to +4.0% in 2011. The country transitioned from being plagued by hyper-inflation and political problems from 1980 through mid-1994, to a “gold mine,” attracting investors from all over the world. In 2003, foreign direct investment totaled $10.1 billion USD. By 2010, it had grown nearly five times over, to $48.5 billion USD. And in a vote of confidence in the country’s economy and policy management, Brazil was promoted to investment-grade status in 2008–09 by the three main ratings agencies. Southeastern Brazil, the country’s most heavily populated region, includes the metropolitan areas of São Paulo and Rio de Janeiro — both of which host offices of BTMU Brazil — and Belo Horizonte. Brazil’s 190 million citizens have benefited greatly from this growing giant. In 2002 per capita income sat at an average $2,000 USD, but by 2010 had grown to more than $10,800 USD. Since 2006, Brazil’s credit to the private sector — growing from a low base — has expanded at 2.4 times the pace of GDP. Brazil is rich in commodities and has the eighth-largest crude oil reserve in the world, making it energy self-sufficient. Much of Brazil’s energy consumption comes from renewable sources such as ethanol and hydroelectricity. Brazil was known as a “coffee economy” from 1840 to 1930, but has transitioned into a diverse economic juggernaut, home to large multinational and domestic corporations dealing in agriculture, motor vehicles, petrochemicals, computers, aircraft, and durable consumer products. Fútbol (soccer) is the most popular sport in Brazil, and the country has won the World Cup a record five times. In 2014, Brazil will host the FIFA World Cup. In 2016, Brazil will be the first South American country to host the Olympic Games.
COLOMBIA Mexico Mexico, which also benefits from a stable government and policy framework, is the second-largest country in Latin America (after Brazil) and has strong economic ties with the United States given its close proximity. Mexico was the first Latin American member of the Organisation for Economic Cooperation and Development (OECD). Its population of about 113 million ranks 11th in the world. Being closely linked to the United States through trade, tourism, and geography, Mexico has also been subject to the ups and downs of the U.S. economy, but rebounded by 5.0% in 2010 as internal demand strengthened. According to the IMF’s January 2010 World Economic Outlook Update, Mexico is expected to grow by +4.2% in 2011. The 70 staff members of BTMU México will contribute to that growth.
Colombia Colombia, located in the northwest of South America, has the fourth-largest Latin American economy and is the third most populous country, claiming Bogotá — where we have a representative office — as its largest city with a population of roughly eight million. With its history of internal armed conflicts now largely under control, Colombia had GDP growth of +4.7% in 2010. The country is once again experiencing strong capital inflows to develop its natural resources, particularly the hydrocarbons sector, as well as to portfolio investments. Marking its progress through political stability and market-oriented growth opportuni-
ties, after 11 years Colombia regained its investment-grade status from Standard & Poor’s in mid-March 2011. Earlier in the same month, CEO Masa Tanaka on behalf of BTMU signed an agreement with Bancolombia, the country’s largest commercial bank by assets, to develop opportunities for business cooperation in Colombia.
Peru Peru, which held a first-round presidential election cycle in April 2011, has sustained real GDP growth of 6% per year in 2002–10 and recent strong inflows of foreign investment amounting to $7.3 billion USD in 2010. Situated in western South America, Peru is a leading producer of copper, zinc, gold, and silver. The country also exports textiles and a wide variety of agricultural and fishery products. Economic growth has been solid over the past decade and has been driven by strong domestic demand and the run-up in commodity prices. Like Brazil, Peru’s solid economy and policy management positioned it to obtain investment-grade status from the international ratings agencies in 2008–09. Peru’s GDP grew at a rate of +8.3% in 2010, with a healthy rate of inflation at +2.9%. Peruvians take great pride in their culinary traditions, and the country’s cuisine has gained international recognition for its flavor and diversity. BTMUA opened a representative office in Lima in February 2011.
Chile Chile has been the region’s most stable economy since the 1980s and enjoys prudent policy making and a low occurrence of corruption. It was the first South American country to join the OECD and has the second-highest GDP per capita in PPP terms in Latin America. Ever had Chilean wine? Chile is the world’s fifth-largest exporter of wine and the eighth-largest producer. Foreign direct investment is strong, flowing mainly into the sectors of mining, gas, water, and electricity. Since the late 1990s Chileans have enjoyed access to home equity loans, debit cards, leasing, and currency futures and options. Most of the population resides in the greater Santiago area — more than 6 million people, including the 41 who staff our branch office there. Today, tourism remains strong in Chile, with the majority of visitors coming from nearby Argentina, followed by the United States
Argentina Not only is Argentina one of South America’s largest economies, is also ranks as the world’s eighth-largest country in terms of land mass. A member of the United Nations and counted among the G-20, Argentina has the highest GDP per capita in Latin America and the region’s third-largest economy. Following its financial crisis that led to a declaration of a sovereign debt default in December 2001, investor confidence has returned against a backdrop of fast-paced economic growth and increasing trade with neighboring Brazil. Agribusiness is an important sector, dominated by the production of soy, wheat, and livestock. Buenos Aires, the largest city in Argentina, is often referred to as the “Paris of the Americas” and is the epicenter of cultural activities and nightlife.