Examination of Witnesses (Questions 92
- 99)
TUESDAY 9 JANUARY 2007
CBI
Q92 Chairman: Gentlemen, thank you
very much for coming to this evidence session on our slightly
redefined inquiry: it began originally specifically with Brazil
but then broadened to include the other Mercosur countries. We
are very grateful to you for coming and for your written evidence—both
the original evidence and the supplementary evidence. Can I, as
always, begin by asking you to introduce yourselves for the record?
Mr Campkin: Thank you, Chairman.
My name is Gary Campkin and I head up the International Group
of the CBI.
Mr White: Richard White. I am
a Senior Policy Adviser and my responsibility includes that for
Latin America.
Mr Miller: I am Nick Miller, also
a Senior Policy Adviser, responsible for Trade and Investment.
Q93 Chairman: Can I begin by asking
you a general question: What do you think the economic opportunities
are for Britain in the Mercosur countries? What potential do they
have as economies?
Mr Campkin: For the Mercosur region
I think one needs to divide out Brazil and the other countries.
Brazil certainly is one of the leading emerging economies. We
believe that there has been quite a substantial transformation
over recent years with economic stability much more to the fore,
economic management much more stringent and we believe that the
fundamentals there in Brazil mean that there is a lot of potential
for British companies to do business. Obviously, some of the other
countries in the Mercosur grouping are either smaller or have
run into political and economic management problems which necessarily
will reduce the potential capacity for British companies to benefit
from opportunities.
Q94 Chairman: The Brazilian growth
rate is almost European, really, compared with India or China,
say.
Mr Campkin: That is right, between
3.5 and 4% for last year, and predictions by President Lula for,
perhaps, 5% in the coming year. Nonetheless, if you put that in
the context of where Brazil has come from that is a turnaround,
and it is consistent and it is consolidated. We have no reason
to believe that it will be reduced. We believe that those fundamentals,
therefore, will produce growing and increasing opportunities in
the coming years.
Q95 Mr Hoyle: Just going on from
that, obviously we are talking about BRIC economies. Does it make
sense to have Brazil and Russia in with India and China, due to
the difference in rapid growth? Do you think we should separate
the two? Maybe, have B&R and I&C?
Mr Campkin: The BRIC economies
themselves, of course, a phrase coined by Goldman Sachs in a report
in 2001. I do not think there is any particular definition that
would say: "These countries should now be in, these countries
should now be out". What is important to focus in on is that
there is a group of leading, emerging economies which includes
those four, which within global economic and regional economic
growth terms have a great influence, not just in terms of creating
the sort of opportunities that we look for in British business,
but also above and beyond that have increasing political clout
as well. I think it is right, therefore, that there is this grouping
of leading emerging economies; if you want to call them BRICs
let us call them BRICs, but I think that is the reality.
Q96 Mr Hoyle: So they are better
off being kept together.
Mr Campkin: I think so.
Q97 Mr Hoyle: Going back to Brazil
and South America as a whole, do you really think we take trade
seriously enough?
Mr Campkin: In what sense?
Q98 Mr Hoyle: Do you think we are
doing enough? All the focus seems to be on China, and then we
talk about India. Yes, somebody is going to touch on JETCO, but
looking at South America as a whole do you really think, as a
country, we take South America seriously enough?
Mr Campkin: If I can answer that
in two ways: the first is to look a little bit at the historical
legacy. Through the 1970s and 1980s, when most of the economies
in Latin America were going through some very significant troubles,
British companies had their fingers burnt. There were a lot of
companies that withdrew (some stayed but a lot withdrew), and
there was, in one sense, a perception legacy. The conditions are
now different, as I say particularly for Brazil, and we are trying
as much as we can within the CBI, and I know the Government is
too, to recognise those changed conditions and to ensure that
there is more awareness of the opportunities within the key economies
of the region, Brazil being absolutely at the top of that tree.
The second point I would like to make in relation to the question
is that we are now seeing a group of managers coming through into
the top and upper echelons of British business who have had experience
of working in the region. Again, if you look back 10 or 15 years
that was not the case. So you are now seeing people who understand
the region, understand the dynamics and, therefore, in the sort
of inquiries and conversations we have with our member companies,
we believe there is an increasing degree of seriousness and reality
about the conditions in Brazil.
Q99 Mr Hoyle: Do you think we are
a bit of a tail-end-Charlie, where our competitors are already
there and taking advantages, and that we have missed out compared
to our competitors?
Mr Campkin: In some sectors that
may well be the case. However, if you then look at business opportunities
it is always a question of balancing off one against the other;
you have finite resources within a company and you have to decide
where your best opportunities are. Certainly it is the case, we
believe, that Brazil does present significant opportunities for
British business, and these need to be realised.
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