I. FIDAGH UPDATE
Names for FIDAGH have been defined in three languages:
Spanish: Federación Interamericana de Asociaciones de Gestión Humana
Portugues: Federação Interamericana de Associações de Gestão de Pessoas
English: Interamerican Federation of People Management Associations
Due to Adriana Alarcon’s resignation, Cesar Pera from Peru took over as Andean Area VP.
The new Board is:
President Paúl Rosillón |
Venezuela |
Vice President Horacio Quirós |
Argentina |
Secretary -Treasurer Leovigildo Canto |
Panama |
VP Central America and Caribbean Area Fryda Castillo |
Nicaragua |
VP Andean Area Cesar Pera |
Peru |
VP South Area Miguel Ropert |
Chile |
Immediate Past President Cássio Mattos |
Brazil |
President of Advisory Board Eladio Uribe |
Dominican Republic |
FIDAGH’s new funding system, implemented as a pilot project as of April, is based on the size of the economy and employment levels, as well as on the size and influence level of the association. A new revision of FIDAGH’s strategic intent was initiated in the board meeting recently held in Santiago, Chile. Experts from Symnetics (Kaplan & Norton) assisted as facilitators.
A successful Regional HR Conference for the Mining Industry held in Chile heralded a new way of serving HR professionals in the Region. Geographic HR Conferences will continue to be organized but they will be complemented by regional industry-focused HR congresses.
Next FIDAGH Board of Directors Meeting
Cartagena de Indias, Colombia – September 17, 2006
II. GENERAL OVERVIEW
For a table of Economic Indicators for the region click here
According to CEPAL, the Gross Domestic Product (GDP) of the countries in Latin America and the Caribbean is expected to grow by 4.6% during the year 2006, a rate that is somewhat higher than that recorded in 2005. This growth will occur within a range of 3 to 6%, with the exception of Argentina and Venezuela, which are expected to grow by more than 6%. The greatest growth rate will be seen in the Southern Cone (Argentina, Chile, Paraguay, Uruguay) with a 6.9% growth rate, and in the Andean Community, with 5.7% growth rate. A slight 0reduction in the growth of Latin America is expected for 2007, estimated at approximately 4%.
On the other hand, CEPAL estimates that inflation will remain similar to that observed in 2005 within the region, ranging from 5% to 7%. This level, which is historically low, is expected despite a context in which energy prices remain high.
The region’s main risks are the decrease in the international demand of raw materials and manufactured products, as well as a deterioration of the global financial scenario, which would have an impact in the higher levels of national debts. Although the improvement of the regional economy has led to an improvement in some of the main indicators of the job market, there is still a high level of unemployment in the region as well as a significant shortage of decent work.
Some good news is that Latin America has become the leading region against child labor in the world. According to the ILO [International Labor Organization], there has been a rapid decrease in child labor in Latin America and the Caribbean over the last four years. The number of child workers between the ages of 5 and 14 in the region was reduced from 17.4 to 5.7 million (16% to 5%).
During the year 2006, there will be presidential and legislative elections in seven countries of the FIDAGH region. The tendency toward center-left or more radical left governments persists in countries with high poverty rates and a poor distribution of wealth.
The total population of Central and South America is 525 million people. The paradox is that while the production of food within the region triples the population’s needs, 10% of the people, that is to say, 53 million, have insufficient food. Chronic malnutrition in children is severe in Central American countries such as Guatemala and Honduras, as well as Andean countries such as Bolivia, Peru and Ecuador. This problem affects 8.8 million children under the age of 5 (which is 16% of the population in that age group). The Corporate Social Responsibility agenda in Latin America should have additional elements to those in Europe and other developed countries; it should include policies concerning the fact that almost half of the population lives in poverty or that 25% of young people are unemployed.
Emigration appears to be the best labor alternative for young Latin Americans between the ages of 15 and 24. The unemployment rate of this population sector is 16.6 percent in Latin America, which means about 18 million young people.
The president of Manpower, Jeffrey Joerres, recently stated that, while there will be three or four pensioners for each worker in developed countries such as Japan, Italy, France and Australia, Latin America has the opportunity to stand out in the international job market, due to having an available young and qualified workforce.
Although the poverty rates for Latin American countries are generally high, poverty among its indigenous populations is even more frequent and severe. Ten percent of the population belongs to one of 200 indigenous groups, as well as ethnic minorities of African descent. Countries with an important proportion of indigenous population are Guatemala (50%), Bolivia (64%) and Peru (42%).
The indigenous populations constitute almost one third of the total rural population of Latin America. Furthermore, indigenous peoples normally have a very scarce representation or none at all in the governments of their countries. Due to this problem, the presence of indigenous political movements in countries such as Peru and Bolivia is growing.
III. SUB-REGIONS & COUNTRY REPORTS
a) Central America and Caribbean FIDAGH
The enforcement of the DR-CAFTA is still being postponed. Its effective date was established for January 2006, but none of the countries (Dominican Republic, Nicaragua, Honduras, Guatemala, El Salvador and the United States) were ready, due to not having ratified the agreement, with the exception of El Salvador. The obstacles have been overcome with time and the agreement is expected to be in effect definitively as from July 2006.
Despite the fact that child labor is decreasing in Latin America, there are 2.4 million children in Central America between the ages of 5 and 17 who are a part of the workforce. This figure may be higher, as there are many non-registered cases.
Costa Rica:
On stepping down from office, President Pacheco admitted that, even though Costa Rica had become one of the most competitive countries in Latin America, he had not been able to solve all the country’s problems. During his term in office, GDP fell, inflation escalated and unemployment and poverty increased.
Dominican Republic:
No comments.
Guatemala:
The fact that this is an election year for this country is postponing some necessary legislative projects and generating a degree of labor conflict which may affect the signing of the Free Trade Agreement. There are ongoing preparations for the FIDAGH Interamerican Human Resources Congress, to be held in May 2007.
Nicaragua:
No comments.
Panama:
No comments.
b) Andean FIDAGH
Bolivia:
Evo Morales, representative of the Movimiento Al Socialismo (MAS), a left-wing party fully supported by indigenous groups, promised to nationalize the country’s resources during his election campaign. His recent decision to nationalize the country’s resource of gas has had a very strong impact on the region on both the private companies that produced and marketed gas as well as the bordering countries to which the gas was supplied and which have been affected by this decision. The new economic and social policy, the nationalization of companies that used to be private and the revoking of legislation that promoted freedom of hiring are factors which are affecting the work environment.
The new Bolivian Human Resources Association, ASOBOGH [Asociación Boliviana de Gestión Humana – Bolivian Human Resources Association], received the full support of FIDAGH for the organization of its first HR Conference in April. This conference helped to consolidate the ASOBOGH on a National scale after many years of Bolivia lacking a representative HR national association.
Colombia:
Colombian President, Alvaro Uribe, was re-elected in the election on May 28. He gained popularity during his last term in office for his strategy of direct confrontation with leftist guerrilla organizations.
As a reaction to the fact that Mexico and Colombia signed the Free Trade Agreement with the United States, Venezuela, Colombia’s main neighbor, distanced itself from the G3 and strengthened its relationship with MERCOSUR countries.
Ecuador:
Ecuador needs to solve the poverty problem that affects a large portion of its population. Although Ecuador is the 5th largest oil producer in South America, this country cannot benefit from the increase in oil prices because the few refineries it owns do not have the capacity to satisfy the internal demand for derivative products. It is therefore forced to import them from neighboring countries such as Venezuela.
The Congress is making a new attempt to pass a Labor Mediation and Services Outsourcing Law, as well as other reforms proposed to be incorporated into the Labor Code and which are being discussed as a part of the negotiations for the Free Trade Agreement.
Peru:
The majority of votes in April's Presidential Election went to Ollanta Humala, a radical member of left-wing nationalism. However, the number of votes was not enough and a ballot will be necessary. According to election polls, the coalition led by ex-President Alan García, representing a more moderate government policy, is expected to win.
Venezuela:
Venezuela’s decision to abandon the Andean Pact and become a member of MERCOSUR caused troubles among its Andean neighbors, mainly for Colombia.
President Hugo Chavez constantly travels the region with the aim of influencing the decisions of several countries that have Presidents who regard Chavez’s policies favorably. Many analysts consider Chavez to be the Fidel Castro of the 21st Century.
c) FIDAGH South
Argentina:
After the severe default in the year 2001, Gross Domestic Product (GDP) accumulated 39 consecutive months of inter-annual increases. In only three years, the economy grew by 30%, which is the highest figure in the last 100 years. If the economy continues to develop as expected, its growth would be that of 40% in only four years (Source: Iberoamerica Empresarial).
New court orders regarding labor have contributed to the increasing cost of employment, due to the increase in the cost of dismissals, work-related accidents, employee mobility and a new solidarity treatment applied to outsourcing contracts.
Brazil:
Ten years ago, work cooperatives were created as a source of employment. President Lula Da Silva submitted a bill to the Brazilian Congress for the purpose of legalizing the labor situation of 5 million entrepreneur workers who work at cooperatives, yet are subject to a variety of disadvantages due to not having a law to protect them.
The National Congress that the ABRH [Brazilian Human Resources Association] is organizing for August 22-25 is the most important in the region. The Congress’ theme is “Change for Competition” [Transformar para Competir] and will include 145 conferences, with 3500 expected attendees.
Chile:
Michelle Bachellet took office and has demonstrated that she will continue with the successful government policy that the country has had until today. Her government has emphasized the measures related to equal hiring opportunities and gender balance, the creation of a new labour contract law and outsourced worker management, and the standard pension amount is being increased. The improvement in copper prices is generating unprecedented profits.
Paraguay:
Unregistered labour, sub-employment and poverty have reached record levels over the past decades. The Foundation for Sustainable Human Development [Fundación para el Desarrollo Humano Sustentable - FDHS] estimates that unregistered employment currently affects 80% of the country’s workforce.
Uruguay:
The problem with Argentina over the installation of processing plants that could pollute the Uruguay river which constitutes a border between the two countries has become worse. The international discrepancy was submitted for the consideration of the International Court of Justice in the Hague.
Apart from the existence of this border conflict with Argentina, the Uruguayan government has had conversations with Washington regarding a future bilateral free trade agreement, which has cast doubts over this country’s continuation as a member of MERCOSUR
IV. CHALLENGES FOR THE HUMAN RESOURCES FUNCTION
The changes in governments and the political tendency towards the left in several countries in the region are causing changes in legislation and in the way in which companies relate with their personnel. Some of these changes are affecting outsourcing and flexibility in labour processes and also tend to increase costs.
V. CERTIFICATION
HR COMPETENCIES CERTIFICATION
The Argentine HR Association, ADRHA, has finally signed an agreement with the Interamerican Development Bank (IDB) and other local entities (Unions, Universities) to launch a program called “Human Resources Management within a New Framework of Labor Relations” [Gestión de Recursos Humanos en un Nuevo marco de Relaciones Laborales]. The programme is intended to investigate and create best HR practices, mainly for small and medium companies that employ approximately 90% of the Argentine workforce
VI. 2006 EVENTS
• The 1st Human Resources Management Congress of Central America and the Caribbean – “Las Personas como centro de una región sin barreras” [“People as the Focus of a Region without Barriers”] - will be held in Managua, Nicaragua, from June 21 to 23, 2006.
• The 1st Andean Regional Congress will be held in Lima, Peru, on November 23 and 24, 2006.
• The 1st Regional FIDAGH South Congress will be held in Florianopolis, Santa Catarina, Brazil, in September, 2006.
Associação Brasileira de Recursos Humanos - ABRH
CONARH 2006 – August 25 to 28, 2006
FIDAGH South Regional Congress – September, 2006 in Florianopolis - Santa Catarina
Asociación Colombiana de Gestión Humana - ACRIP
10th International Symposium on Human Resources Management – Globalization of Human Resources Dehumanization – Cartagena, September 7 to 9, 2006
Asociación de Ejecutivos de RRHH de Nicaragua - AERHNIC
1st Regional Human Resources Management Congress of Central America and the Caribbean – “Las Personas como centro de una región sin barreras” [“People as the Focus of a Region without Barriers”] June 21 to 23, 2006.
Asociación Nacional de Profesionales de Recursos Humanos (ANREH) - Panamá
Human Resources professional Celebration – June, 2006
National Human Resources Congress – Every two years, in August.
Asociación Peruana de Recursos Humanos
First Andean regional Congress – November 23 and 24, 2006
Asociación de Profesionales Uruguayos en Gestión Humana - ADPUGH
National Congress - Montevideo – October, 2006
