WFPMA

1. FIDAGH UPDATE

On September 17, 2006, the second quarterly meeting of the Federation’s Board of Directors was held in the city of Cartagena de Indias, Colombia. There was a 17-point agenda, the most important points being:

1. Discussion and approval of the 2006 – 2010 Strategic Map set forth with the support of Symnetics experts (Kaplan y Norton) using the BSC (Balanced Scorecard) methodology
2. Review of the preparations for the XX Inter-American People Management Congress [XX Congreso Interamericano de Gestión Humana] which will be held in May, 2007 in Guatemala.
3. The Board of Directors’ succession plan and the possible members of the next Board of Directors for the November 2007 – November 2009 period. The approval of these members will be considered by the FIDAGH Special General Meeting to be held in May, 2007, in Guatemala.

The next FIDAGH Board of Directors’ Meeting will be held on May 15, 2007 in the city of Guatemala, followed by a FIDAGH Special General Meeting. The main points that will be discussed in this Meeting will be the following:

1. Approval of the 2006 - 2010 Strategic Map
2. Updating and partial amendment of the bylaws
   
3. Approval of the next Board of Directors which will take office in November 2007

II. REGIONAL OVERVIEW

Latin America and the Caribbean will grow by around 5% this year, according to the Economic Commission for Latin America and the Caribbean (ECLAC). This is the second time in 25 years that the region will see four consecutive years of growth, with the regional GDP posting a cumulative rise of 17.6% (an average annual increase of 4.3%) and per capita GDP, a 12% increase.

Despite substantial improvement over the last quarter-century, Latin America and the Caribbean continue to show less dynamism than the rest of the developing world.

The year 2007 will see regional GDP growth of about 4.5%, within the context of a moderate slowdown of the world economy, according to ECLAC projections.

This economic expansion will be spread across Latin America and the Caribbean, ranging between 3.5% and 6.5% for most countries. The exceptions are Argentina, the Dominican Republic and Venezuela, with growth rates over 7.5%, and Haiti, at about 2.5%.

The Caribbean nations are expected to grow by 6.3%; South America by 5.4%; and Mexico and Central America by some 4.1%.

Economic growth has had a favorable impact on labors markets and the employment rate. The 2005 rise of 0.5 points takes the rate up to 53.6% of the working-age population. While this is still below its 1997 level, the good news is that expansion in employment is taking place in the formal sector.

The unemployment rate fell to 9.1% at the end of 2005 and remained under 9% over the first semester of 2006. While the rate is at its lowest since the mid-1990s, 18 million people in the region are jobless.

Keeping inflation (at 6.1% in 2005) under control remained a concern for most central banks. Despite rising international oil prices, appreciation of almost all national currencies in the region has helped rein in the pace of price increases.

In 2006, Latin America continued to witness the confrontation of two political-economic models, the results of which denote a great political confusion that reigns among the region's societies and citizens.

The ‘mix’ of results that could be observed from the confrontation of these models was reflected in the elections held in Colombia, Costa Rica, Peru, Brazil and Nicaragua, which show us how the Latin American community of nations is seeking new approaches to the different political and social structures which are different from those that have already been consolidated in different latitudes.

The economic integration processes have already begun to suffer. Their viability and permanence has been affected due to the inevitable influence of the political instability that some countries are exerting on the economic aims that drive these processes. An example of this is Venezuela, a country which withdrew from the Andean Community of Nations (ACN) in order to integrate the MERCOSUR, where it believes that there are governments and projects which are politically better suited to Venezuela's political project.

On the other hand, the differences in the economies are already becoming evident and showing in the economic imbalance as well as in the dynamics displayed in the relationship between countries. An example of this is the case of Paraguay and Uruguay, who face the more developed and consolidated economies of Brazil and Argentina.

Chile still stands out as an exception within the context of regional political and economic instability, as it maintains a sustained economic growth that is open to global competition.

Lastly, the 1st Ibero-American Summit was held in the city of Montevideo, Uruguay on November 3 and 4, where all of the presidents and representatives of the Spanish and Latin American governments met. The aim of this initiative, which was promoted by the United Nations and the Spanish government, was to strengthen the political and economical institutions in Latin American countries.

III. SUB-REGIONS AND COUNTRY REPORTS

a) Central America and Caribbean FIDAGH

Countries who have signed the DR-CAFTA (Dominican Republic – Central American Free Trade Agreement) are still having trouble applying the agreement. None of the National Congresses/Assemblies has ratified the signing of the treaty, which has delayed its enforcement. In each country, to a greater or lesser extent, there have been groups that oppose the application of the treaty, fearing that their economies would be undermined due to the loss of competitiveness and the shifting of local products and services to US competitors.

Although Mexico is not a member of the federation, it is a very important player in the regional economy. The results and side effects of the elections in this country have generated a great deal of uncertainty regarding the future of other countries which have signed the FTA (Free Trade Agreement) with the USA, considering the economic results obtained by Mexico in its experience with the NAFTA (North American Free Trade Agreement). These results can be observed in the elections results, showing us a country ridden with deep political differences and great social inequality.

Lastly, the US government’s intention to build a wall of over 1,000 km along the border with Mexico, with the aim of deterring the illegal immigration of Hispanics to this country, has generated a great deal of discontent and rejection within the region's communities, introducing a very contradictory element to the principles which support the free flow of economies within a context of integration that is capable of going beyond the economic aspect.

Costa Rica
Elections were held in February and the Social Democrat and Nobel Peace prize winner, Paz Oscar Arias was elected, after already having served as president in the past. His first challenge has been to deal with the rejection generated within the country by the FTA signed with the United States. The President believes that this agreement should be promoted, and he also attempts to minimize the internal economic impact of policies such as the complete elimination of parity with the dollar.

This is still one of the most stable and competitive countries in the region. However, its economic growth has been affected by certain symptoms such as inflation.

The Board of Directors wishes to acknowledge the great efforts made towards integration, which has been promoted since January this year by the current Executive Board of the Costa Rican Human Management Association [Asociación Costarricense de Gestión Humana] which he has helped to make this one of the most active NMA (National Members’ Associations) in the region in terms of support for FIDAGH activities.

Dominican Republic
The party currently in power obtained political control of the national Congress (senators and members of parliament) in the elections held in August this year. However, this country has also been unable to ratify the FTA that it signed with the USA, and has shown to have problems of economic imbalance such as recession and inflation. Nevertheless, this country is still one of the most important and most frequented tourist destinations in the world.

The Dominican Association of Human Management Administrators [Asociación Dominicana de Administradores de Gestión Humana – ADOARH] launched its own website in August this year.

Guatemala
Just as in other countries in the region, the FTA signed with the USA has still not been ratified by the lawmakers, due to the concern that this might have a negative impact on the country’s internal economy. The struggle against organised crime has become one the current government’s main policies. Mario Castro was re-elected as president of the Guatemala Human Resources Managers Association [Asociación de Gerentes de Recursos Humanos de Guatemala]. Preparations are still under way for the celebration of the XX Inter-American Human Management Congress [XX Congreso Interamericano de Gestión Humana - CIGEH] in May, 2007.

Nicaragua
On Sunday, November 5, there were presidential elections. These elections were among those with the highest number of observers in history; it was attended by over 18,000 international observers, and received a broad coverage by the international news media. Daniel Ortega was elected on the first round, garnering half of the valid votes. Ortega has a past of guerilla warfare, and he was president of the country from 1984 to 1990, heading what was called the Sandinist National Liberation Front [Frente Sandinista de Liberación Nacional]. It is unclear how Ortega’s return to the presidency of Nicaragua will affect the political orientation of the country’s economic policies. This will be demonstrated through future decisions such as the ratification of the FTA signed with the USA.

The Nicaragua Human Resources Executives Association [Asociación de Ejecutivos de Recursos Humanos de Nicaragua – AERHNIC], successfully organized the Regional FIDAGH Congress for Central America and the Caribbean in the city of Managua.

Within the context of the abovementioned congress, a meeting of the region’s NMA presidents was held. This meeting was attended, for the first time, by representatives of the El Salvador Human Resources Administrators Association [Asociación de Administradores de Recursos Humanos de El Salvador], who began the necessary procedures to become members of the federation in May next year.

In May 2006, there was a partial change in the Executive Board of the Nicaragua Human Resources Executives Association [Asociación de Ejecutivos de Recursos Humanos de Nicaragua – AERHNIC] as a consequence of the resignation of the president who had been elected the past November. Ligia Medina took office to complete the corresponding period.

Panama
The main event was the consultative referendum held on the past October 22, which approved the widening of the Panama Canal. One of the immediate effects that this decision has entailed is the attention being focused on the creation and development of the human capital that this giant project will demand. Therefore, an important project on Job Skills is being developed, where the National Human Resources Association [Asociación Nacional de Recursos Humanos] integrates the committee that coordinates the project on a national level.

Panamá is currently negotiating a Free Trade Agreement with USA.

The Panamanian Association of Human Resources [Asociación Nacional de Recursos Humanos de Panamá], upon the request of the Board of Directors, has begun the corresponding technical studies to assess the possibility and convenience of permanently managing the FIDAGH Treasury in that country.

The Panamanian Association of Human Resources has relocated its administrative offices to new facilities in the city’s downtown area.

El Salvador
The current government of El Salvador continues to promote a free market economy.
The government is still developing a strong policy to reduce juvenile violence and delinquency, as this is a serious problem in the country, affecting the viability of ratifying the FTA signed with USA. The development of the tourism industry has also been affected by internal security issues.

AARHES celebrated Human Resources Manager Day [Día del Administrador de Recursos Humanos] on October 20, 2006. AARHES held a meeting of the region’s NMA presidents on October 21, 2006. During this meeting, progress made by the 2007 XX CIGEH to be held in Guatemala was assessed.

b) Andean FIDAGH

Bolivia
The process of State transformation, which is promoted by the president, Evo Morales, continues to advance after its approval in June 2006 by the Bolivian Constituent Assembly. However, the process has undergone a number of setbacks which were reflected in the constant social, labor and union conflicts.

The economic recession has been generating an important migration of professional workers and technicians to Europe and the United States. Labor legislation has become stricter and restrictions on the development of business activity have increased.

Despite the difficulties that have arisen as a consequence of the changes promoted by the government, this young association has continued its institutional labor by carrying out activities and reaching international agreements with educational institutions.

Colombia
President Alvaro Uribe was reelected for a new term in office during the elections held in May, 2006. The negotiation and signing of a FTA between Colombia and the USA is a successful step toward the commercial integration policy that the government has been promoting. In the chapter regarding FTA Labor Issues, in which the Columbian Association of Industrial Relations and Personnel [Asociación Colombiana de Relaciones Industriales y Personal – ACRIP] actively participated, both the USA and Colombia committed to respecting the fundamental workers’ rights set forth in the agreements signed with the International Labour organization(ILO).

Another important aspect worth noting in the context of the signing of the FTA is the reinsertion of ex-combatants into labour and social activities. As of this date, there are 34 demobilised combatants.

The FIDAGH Board of Directors granted a recognition award to ACRIP on its 50th anniversary. Recognition was also granted to Clemente Del Valle, who was FIDAGH President from 1988–90.

Ecuador
On Sunday, November 26, Ecuador witnessed the second round for the presidential elections, which granted victory to Alvaro Novoa, a centre-right candidate and supporter of the signing of the FTA with USA, being partial to the application of free market policies. His arrival to office announces confrontation and cutting certain ties with some of the governments in the region, such as those of Venezuela and Bolivia.

This is the end of a four-year period characterised by a highly politically volatile and economically unstable situation, in which a series of legislative decisions has focused on reforming labour laws.

The Ordinary Meeting has been called. The purpose of the meeting will be to elect a new Executive Board and approve the review and updating of the bylaws for the Personnel Directors Association of Ecuador [Asociación Ecuatoriana de Directores de Personal – AEDPE].

Peru
Presidential elections resulted in the election of Alan García, the social democratic (centre-left) candidate, who presided over the country 15 years earlier. His first policies have aimed at improving the efficiency of and decreasing public spending. His economic policies have included the promotion of an aggressive strategy to strengthen the regional integration agreements between Andean countries (Andean Community of Nations without Venezuela), starting negotiations with MERCOSUR countries, and he has stated his support for the signing of the FTA with the United States and other countries in the region, such as Chile.

On August 1, 2006, Marcela León was appointed president of the association for two years.

The Peruvian Human Resources Association [Asociación Peruana de Recursos Humanos – APERHU] successfully held the 1st FIDAGH Regional Congress from November 16-18, including countries of the Andean area.

Venezuela
This country is currently experiencing an overwhelmingly tense elections campaign, in preparation for the presidential elections of December 3, 2006. Hugo Chavez aspires to be reelected for a new period in office. However, according to the main political analysts, Manuel Rosales, the opposition candidate and successful politician as mayor and governor, is a realistic government option in the event that the election process is transparent. In any case, the short term political horizon in the country is uncertain, and some analysts and institutions do not dismiss the possibility of violent events, the suspension of the elections or the refusal to acknowledge the results on the part of the supporters of either candidates.

President Chávez and the US President, George Bush, confrontation has not yet had a real effect or impact on the country's foreign trade relationship or on its economic activity, as the country is currently enjoying a tremendous flow of tax revenues as a direct consequence of the high and sustained oil prices.

The government has deployed an aggressive labor legislation that has imposed significant restrictions on the productive private sector. An emblematic example of these legal restrictions is what has been called "Labor Solvency", which is a mandatory legal instrument issued by the government and required in order to perform any economy-related operation or activity.

The Supreme Court of Justice annulled a part of the Industrial Relations Implementation and Human Resources Administration Law [Ley del Ejercicio de las Relaciones Industriales y la Administración de los Recursos Humanos], which regulates the exclusivity that was granted to graduate professionals of this profession in providing professional services for companies. The Supreme Court of Justice declared certain provisions unconstitutional, thereby granting the Venezuelan Human Management Association [Asociación Venezolana de Gestión Humana] a triumph that has served to strengthen it institutionally.

ANRI renewed its website in September.

FIDAGH – SOUTH

Argentina
The economy has continued its sustained growth for the fourth consecutive year, amounting to approximately 8% this year. The investment risk index has reached its lowest point in the country’s history, and inflation, although still somewhat high, is at a manageable 10%.

Politically, Kirchner is consolidating his influence and seems to be on his way to a reelection in 2007. There has recently been a degree of confrontation with sectors of the military and the church due to the re-opening of the political trials against the members of the military that participated in what is referred to as the "dirty war" of the '70s, and disagreements with church representatives. This confrontation can be noted in the tension that exists among these emblematic sectors of society.

The unemployment rate has continued to drop and has ceased to be a crucial problem. There is uncertainty with regard to the effects on labor costs that may be brought about by the approval of the bill on work-related accidents.

The progressive opening of the markets has led to a decreased competitiveness of certain productive sectors and the obsoleteness of systems, while structural flaws are beginning to emerge in the country’s Human Capital creation and development processes within an increasingly demanding and changing labor market.

Brazil
President Luis Ignacio ‘Lula’ Da Silva was reelected on October 26 for another four-year term in office, receiving over 60% of the votes. This may be explained by the successful balance that his administration has achieved by combining a solid macroeconomic growth and an open economic policy with a special focus on the needs of the more impoverished classes.

The current administration is characterized by its clear rules with regard to labor, and this policy has created a stable legal framework for the development of business activities.

Brazil is facing very important challenges in terms of training and development of Human Capital, as it is one of the 10 most important and developed economies in the world.

The Board of Directors wishes to report on the success of the 30th National Human Resources Congress, which was attended by more than 3,000 delegates, making it one of the most important people management events in the world.

On November 23,24 and 25, the I FIDAGH Regional Congress for the South Area was successfully held in the city of Florianopolis. During the celebration of this event, there was a meeting of the region’s NMA presidents. The FIDAGH Board of Directors granted a recognition award to the Brazilian Human Resources Association [Asociación Brasilera de Recursos Humanos – ABRH] on its 40th anniversary as an institution.

Chile
This country is still an atypical case in Latin America. It maintains a sustained economic growth (4.5% in 2006) and continues to make progress in the strengthening of its institutions. This year, it was once again recognised as the most competitive country in Latin America by the annual ranking published by the World Economic Forum, as well as the country with the most transparent public funds management on the ranking established by the NGO, Transparencia Internacional [International Transparency].

There are two very important legal reforms on the horizon. One of them addresses the need to update and improve provisional systems to improve the programme’s scope and grant access to the more financially challenged sectors. The other reform is aimed at making progress in the educational systems so as to make education a system that truly contributes to raising the level of competitiveness in Chile's human capital, in the face of the challenges involved in being the most open and globalised economy on the American continent.

The Chilean Human Resources Executives Circle [Círculo de Ejecutivo de Recursos Humanos de Chile] is organising an international event on Competitiveness and Human Management within the context of the country’s 200th founding anniversary.

Uruguay
The Uruguayan Human Management Professionals Association [Asociación de Profesionales Uruguayos en Gestión Humana – ADPUGH] has formally requested to be the host country for the next WFPMA World congress, which will be organised by FIDAGH. This candidacy will become official during the FIDAGH Special General Assembly which will be held in May 2007 in Guatemala.

Paraguay
The Board of Directors is studying what are next steps in relation with the Paraguayan Human Resources Professionals Association [Asociación Paraguaya de Profesionales de Recursos Humanos – APARH], due to its non-participation in the activities and events carried out and/or called by the association, as well as its state of financial insolvency in the federation since 2004, which has constituted an infringement of the bylaws and regulations that govern the behaviour of association members.

IV. CHALLENGES FOR THE HUMAN RESOURCES FUNCTION

The main challenges faced by human management professionals in the region are varied and numerous. However, the trends indicate three areas on which we may focus:

1. The potential acceleration of the obsoleteness of skills required by the region's human capital, in the face of the dynamic changes in demand by labour markets, especially in countries whose economies are more open to international markets and foreign trade. As the economic integration and globalisation agreements widen their scope, the struggle for the development and preservation of human talent will be an important battle for the professionals in this area.
2. The differences in development and size of the region's economies, as well as the political instability, will continue to affect the harmonious development of regional markets and stimulate deep social changes such as job migration, this being a topic which was included in the Ibero-American forum that was recently held in Montevideo. In addition, some countries will maintain their tendency and practice of regulating employment conditions and perpetuating the lack of new employment opportunities, thereby forcing companies to preserve worker stability at the expense of their profitability, productivity, competitiveness and survival.
3. The management of what are referred to as the ‘intangible assets’ will continue to gain importance in the strategic management of organisations and institutions as a general high Impact practice. This is already forcing the area’s professionals to adopt the ‘emerging paradigm’, which implies the need to stop considering management as a merely administrative and functional activity, and act like true ‘strategic business partners’, with the specific responsibility of ‘adding value’ to company management and contribute effectively to the creation of key organisational skills required by companies to survive and compete in an increasingly volatile, challenging and global economy.

V. CERTIFICATION PROJECT

On September 15th, 2006, ADRHA officially started working as a participant institution for the HR Competencies Programme financed by the Inter-American Development Bank and directed by the Executing Agency FUSAT – Fundación Social Aplicada al Trabajo. The objective of this project is to help establish a new competencies-based management programme to attract, retain, and develop human resources to improve individual productivity and employability. By the end of this project, ADRHA expects to become the first Argentinean Certification Institution.

VI. 2007 EVENTS

Human Resources Directors of Argentina [Asociación de Directores de Recursos Humanos de Argentina]
• V National Human Management Congress to be held in Buenos Aires on May 7 and 8, 2007

Guatemalan Human Resources Managers Association [Asociación de Gerentes de Recursos Humanos de Guatemala]
• XX Inter-American Human Management Congress [XX Congreso Interamericano de Gestión Humana] to be held in the city of Guatemala from May 16 - 18, 2007

The FIDAGH Special General Meeting will be held on May 16, 2007 in Guatemala City.

For the latest issue of Worldlink, click here.