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LATIN-AMERICA – GENERAL
LATIN AMERICA - GENERAL OVERVIEW
New governments were elected in the Dominican Republic, Guatemala and Panama. Overall, there was a victory of the opposition parties, frustrating re-election attempts by former presidents and their continuity in power. There have been no significant changes in the economic or labour indicators in the Region in the last few months.
The purchasing power of industrial wages has decreased by 4.8% in a year in the region and there are 19 million unemployed. (17 million a year ago). The very few new jobs that are created are mostly informal and low quality jobs. There are some 100 million people who have no "decent jobs" in Latin America according to ILO reports. Most Latin American countries have no more than 15% of individuals working for private companies.
Child labour figures continue to be very high. These children have no access to quality schooling, they face physical and psychological risks and furthermore, they have no hopes for future development at all. Those children who eventually reach adulthood have a short life span, which usually is less than 45 years old. Of the estimated 250 million children between the ages of 5 and 14 who are economically active in the world, 17 million, 7% of the world's child labour population is found in Latin America. (ILO – IPEC). In six Central American countries and in the Dominican Republic, there is one child working every five who are less than 15 years old (ILO).
There are many children working for the mining industry and with gold mines and these employers get rich with the efforts of these thousands of children. In Peru, some 50,000 children work in activities related to gold mining and handle mercury without any protection whatsoever.
In Bolivia, most of the 120,000 mining children are Indians. They are between 7 and 17 years old, work inside the mine, and handle dynamite and separate tin through highly hazardous chemicals.
In Guatemala, the “gunpowder children (“los niños de la pólvora”) are well known. They are those who work in putting together the fireworks, bangers, and petards that will be launched by other more fortunate children for Christmas or New Year eve.
On the other hand, more than 2 million children are being sexually exploited in Latin America. (Organization of American States)
But, if in Latin America there are some 19 million adults who do not have jobs, how is it possible that we have 17.4 million children between the ages of 5 and 14 who are generating revenues? asks C. Moreno from ILO.
One of the answers may well be that children earn up to ten times less than an adult and, at the same time, the money these children earn is about 10 to 20% of the income of their whole family. Another issue is the high incidence of informal jobs that has reached nearly 60% in Latin America.
Preventing and eradicating child labour is the objective of an IPEC (ILO) program, that currently is applied in 21 countries in this region and is part of the Decent Work initiative led by Juan Somavía who said: "The capacity to eradicate the worst forms of child labour is a moral test for all societies."
FIDAP NEWS
Miguel Ropert from Chile, replaced Alfonso Palavecino as Vice President of FIDAP´s Southern Region.
Three regional meetings between Vice Presidents and Presidents of the associations that belong to FIDAP Sub regions (Southern, Andean and Central America and the Caribbean) were held at once, or the first time in June this year. These encounters, that used to be done only in the Southern Region, have proven to be very valuable.
Major efforts are being made by ABRH in organizing the world congress with a help from other Latin American associations. It is expected that 65% of congress participants that are not from Brazil will be coming from the Latin American region.
ARGENTINA
Argentina continues with its economic recovery after the default and the main indicators continue stable. Private debtors are gradually reaching agreements and solving foreign debt situations, but the government has not been able to reach any minimum terms or to get the acceptance of international organizations that would help to solve the public debt problem. The improved economy of Argentina is a help, but at the same time, debtor’s demands keep rising. There is social unrest, frequent demonstrations from the more radical sectors (“piqueteros” or pickets in English) and the lack of safety and crime on the streets continue to be an issue.
There has been a remarkable decrease in unemployment, but the figure continues to be high. It is still very difficult to get qualified labour in some industries that have reactivated with the change in the economic situation. For the first time in many years the Argentine trade unions are all together in one single labour confederation (Confederación General del Trabajo – CGT). Leaving the crisis behind, government may just decide national minimum wages in the future, and have other salary and wage increases being again the result of negotiations between unions and employers.
ADRHA run two days updating seminar and workshop for HR college professors. On the other hand, it has gained very positive relationship and exchange of opinions with the Ministry of Labour officials.
A joint venture agreement has been signed with one of the most important Argentine exhibition organizers, to produce ADRHA’s national conference and exhibition that will be held in October 2004. This event will be more important and much larger than in previous years.
BRAZIL
The opening of new export markets helps to keep economic optimism among investors. Indicators have shown satisfactory results. Inflation is kept at bay and the primary surplus during the first semester of this year was well over the goals previously set with the FMI. This scenario was conquered, partly after several trips of Brazil’s representatives to China, Mexico and other Latin American countries were new markets were opened and agricultural products subsidies and barriers were cancelled. The Brazilian government managed a record tax collection during the last semester (8% more than during the same period of last year). However, the challenge still remains to transfer these funds to the social area.
In the political arena, the focus is on the elections of new governors that will be held next October.
Unemployment figures, are slowly decreasing.
The government increased the minimum wages. Although the figure is far from being an ideal one, the increase could not be higher because there is a government intention to improve the social security accounts. The two major reforms implemented by the current government: taxes and social security are starting to show their effects in Brazilian’s everyday life. The next steps to be undertaken by the government will be the approval of trade union and employment reforms and the aim is, among other things, to decrease working hours and informal employment (i.e. without any social security deductions) and to generate new jobs.
New measures applied by the government and NGO´s are showing their effects in the reduction of forced labour and child labour in Brazil. New incentive plans aim to the creation of new jobs. There is unanimous agreement on that the generation of new jobs is essential to improve other areas such as education and social and cultural aspects.
A new ABRH board took over in January, presided by Luiz Carlos Campos.
The Association has been working hard for the organization of the 30th CONARH – ABRH National Congress, together with the 10th WFPMA Congress (two years in advance). This has been and continues to be a great challenge as it will involve more than 70 national and international speakers, EXPO ABRH 2004 which will be a very important exhibition, and “Social Arena”, where companies and NGO´s will share their programmes and foster new Social Commitment plans of action. The results of Forums for Young Executives, Workers and Presidents will be submitted during the CONARH.
The best People Management initiatives done by companies and professionals during 2003, will be awarded.
CHILE
Chile is considered one of the most open economies of the world, with a position that is very close to free trade. It has based its strategic development on a worldwide recognition due to a constant increase in exports. For example, the fruit growing industry generates a revenue of US$ 1,700 million, and Chile will soon be the number one salmon exporter in the world, after having started from zero.
Within this solid social and economic framework, with a forecast of 5% growth for this year, there are two problematic situations. The first one is the creation of a new royalty, which is considered a change on the rules of the game, that may discourage foreign investments. In the second place, unemployment has reached 9.4 %, and this is hindering the country’s growth and causes serious, social consequences. Paradoxically, for a mostly unregulated country, there are strong labour regulations, especially in what dismissals and hiring are concerned. Government politics focus on state control systems and more regulations, thus affecting the hiring of workers. No changes are expected since the country is getting close to an election period.
The HR Association, CERH Chile is growing. Due to this expansion, a CEO position was created
COLOMBIA
The government continues discussions and a process of dialogue in order to reach peace with the guerrillas. Different factions “Colombianos al margen de la ley”, “Líderes de las Autodefensas (AUC)” and the “ELN” have approached the Colombian Congress where they requested a “legal framework with full guarantees in order to go back to civilian life.” This Congress session was attended by fourteen foreign country ambassadors, who where especially invited by the Congress in order to open a democratic scenario for peace negotiations.
Free trade agreement negotiations, with the United States and the Andean Countries (Colombia, Peru and Ecuador, started last May in Cartagena de Indias.
An initiative to obtain support for a Presidential re-election was recently launched.
With a view to lighten the tax default situation in Colombia, the government is working on the elimination of the 14th month retirement pension for new beneficiaries, creating a new tax on pensions and limiting benefits to ensure long term sustainability of the Social Security system. Most of the family allowance government administration offices will probably be closed down.
Last June ACRIP´s President met in Washington, D.C., with ILO officers and Colombian Government representatives, and trade union and industry representatives at a workshop organized for the purposes of an in-depth analysis of labour grievances prevention and solution techniques. This workshop was sponsored by the USA Federal Mediation and Conciliation Service. During 4 days participants discussed how to strengthen labour relations cooperation mechanisms and plans both in theory and practice with a view to develop skills at each one of the organizations represented at that meeting.
COSTA RICA
The federal executive (headed by Abel Pacheco) has tied the free trade treaty between Central America and the United states to the approval of a fiscal plan to reduce the current 5% deficit. This issue has already been discussed in Congress for the last two years and it implies a radical change in the Costa Rican tax system: payment of taxes on foreign revenues, globalisation of individual income, banning of tax havens, and applying taxes on capital gains. In the meantime, the government has decided that there will be mini-devaluations that amount to about 10%, which is the same rate expected for inflation. GDP is expected to grow by 4%.
Government’s bill of law on Labour Flexibility continues to be at the Congress, without any possibilities of being discussed soon. The same happens with the migration bill of law which will be applying tougher penalties on employers that hire workers that do not have the proper work permits and immigration documents.
A new board of directors was elected at ACGRH last May. The new President is Ingrid Rosemberg. A Costa Rican HR conference is planned for October this year.
The Association is working together with the INCAE on HR Manager’s Role, on a Canada and Central America comparative survey and on the design of an “on line” training program for members.
DOMINICAN REPUBLIC
Former President Leonel Fernández (1996-2000) won the May elections competing with the current President Mejia who expected to be re-elected. The transition period until the new government takes office in August has not been very smooth.
There has been a drastic decrease in the supply of electricity (less than 12 hours of electric power is supplied per day) and also of public health services, road maintenance, etc. Up to now, people are patiently waiting for the new government to take over.
Salary increases requested by employees who are working at private companies and in the public sector went unheeded. Workers wanted to have some kind of compensation for the high level of inflation in the country during the last 18 months.
ADOARH started a 96-hour diploma course on Human Resources Management for university graduates working in the area. On the other hand, the Association was chosen by the Defence and National Security High Studies Institute, which reports to the Armed Forces Ministry, to teach a 60-hour course on Strategic Human Resources Management. This is part of a Master Course in National Security and Defence.
The ADOARH presidential candidate of the opposition list (who lost the elections in 2003) has been entrusted with the organization of the 2005 congress. Seen as a goodwill gesture, this has promoted unity and cooperation among colleagues.
ECUADOR
There will be national elections in October: Mayors, Provincial Governors, Councilmen and Advisors.
A big commotion was caused by an English decision to order the Ecuadorian Government to return US$ 75 million to the Oxi oil company as a claim for VAT charged. Ecuador has appealed, stating that this decision is null and void.
After an occupation of the Ecuadorian Social Security Institute, that lasted for over twenty days, the Government has finally authorized an increase in pensions for retirees.
As a result of intense pressure for the signature of a Free Trade Agreement with the U.S., the Government is finally analysing a law that will regulate the operations of Temporary Employment Agencies (there are over 3,500 in Ecuador, but only 120 of them are official).
Last July, A.D.P.E. held in Guayaquil the First Latin American Encounter of Human Talent Managers. A seminar on human resources was organized at the Loja University with the presence of foreign FIDAP instructors.
A new board of directors will be elected next August 20th for the 2004-2005 period.
A preliminary presentation of the Association’s web page was made recently. The official launch is expected to be in October.
GUATEMALA
The new government has made changes on several tax laws including employees income tax.
It is expected that an increase in the minimum wage will be approved shortly, changes will also be voted in the law regulating dismissals. There are strong pressures from the civil self-defence patrols (that were very active during the guerrilla wars) for the government to meet the payment commitments.
The number of members of AGRH has grown dramatically. A new board of directors was chosen recently.
The 15th International Human Resources Convention was held in July. The Association’s bi- monthly publication “LIDERAZGO RH+” has been issued.
There were many training workshops for Human Resources professionals.
The Association is currently working on several initiatives: changes in the bylaws, improving the Human Resources Manager’s image, participation in Parliament to have a say in the changes expected to be introduced in labour legislation. Remodelling the Association’s premises to give a better service to the members (leasing rooms for meetings, library and video-library).
NICARAGUA
As per a recommendation of the Private Funds Superintendence, the government is requesting the Congress to suspend the private funds law, which entails the actual elimination of any chance to generate decent pension benefits and health protection for workers.
Minimum wages were raised by law as of June 1, 2004.
There was a major financial scandal related to irregular bank control interventions (this has now been solved and the funds returned to their legitimate owners).
In June AERHNIC held is 2nd Human Resources Congress and Expo under the motto: Employment and competitiveness; a challenge for Human Resources. The first Central America and Caribbean FIDAP meeting was also held at the same time.
Current initiatives: Give priority to projects or working agreements with Nicaragua’s universities. Submit a bill of law to the National Assembly in order to ban any kind of discrimination during hiring (there is a marked preference for people less than 35 years of age). Look for a way to get actively involved and participate in the Social Security System reform.
PANAMA
A new president was elected for the 2004-2009 period. The position was won by the opposition candidate, Mr. Martín Torrijos Espino, who is taking office next September.
Negotiations continue for the signature of a Free Trade Agreement with the United States that will surely be signed by the new government.
Labour legislation for the tourist sector is being reviewed in order to adapt it with the large tourism promotion efforts being made by Panama.
A new ANREH board of directors took office for the period 2004-2005. The new President is Dayra Muñoz Montecer
Several Updating Workshops were held to foster professional training and updating for Human Resources professionals.
Agreements were signed with COSPAE (an organization that manages a percentage of the educational insurance tax) which will allow free training for the private sector. ANREH has already held 3 refresher training courses using this system and members were admitted at no charge.
ANREH has been backing the Human Resources Competencies Pilot Project, not only economically, but also through the participation of members who are now assisting the Technical Groups drafting regulations. Two important regulations have been issued: Facilitator and Assessor Standards. Other new standards are expected to be issued shortly: Training Administration, Training Planning, and Staffing.
PARAGUAY
There was a major debate at Congress in connection with a new tax law allowing the government to charge more VAT, applying a new personal income tax and drastically reducing the corporate income tax from 30% to 10%.
Members of the Supreme Court of Justice were changed through a tough democratic process.
Former general Lino Cesar Oviedo, who was accused with an attempt of coup d'état in 2000 and the assassination of Vice President Luis María Argaña returned to Paraguay to be judged.
Employing 5% of disabled personnel is mandatory for the public sector according to the terms of a new labour law.
APARH has created a Past Presidents Council which will be operational as of this year.
The Association is working on the design of a new logo, the renewal of the web, the organization of a People Management Congress for August at the Southern Area, and several workshops in the provinces.
PERU
GDP has grown 4.15%, inflation is one of the lowest in Latin America, the economy is expected to continue to grow during 2004, but the rate of unemployment is going up and total poverty keeps high (55%), with extreme poverty at 25%.The domestic political situation remains difficult. Social and political tensions have increased in recent months.
A self-employment and a micro enterprise initiatives run by the Ministry of Labour to enhance occupation, allowed the creation of 2.300 small companies in seven months. A “Solidarity Tax” (3% over salaries) is expected to be eliminated shortly, while a new unemployment insurance is a about to be created.
There is a new board of directors presided by César Pera Cáceres
The Association's e-hiring site is operational and the success of the Institutional Bulleting providing good articles on HR subjects has helped a lot to increase the number of associates.
URUGUAY
Uruguay is getting ready for presidential and parliamentary elections that will be held this October. The economic recovery is improving: unemployment is down to 13.5 % and investors are regaining their confidence. However, there is a high degree of poverty among the population yet.
New investments made it possible to have more jobs in the service sector and also in agribusiness. Salary taxes have decreased and an increase is expected in the minimum wage (this is being discussed at Parliament).
There is an excellent relationship between ADPU and the Ministry of Labour and Social Security that are working together to produce new legislation and rules.
The 9th Uruguayan Personnel Managers Congress was very successful. And Exchange Workshops were also held for the members with the presence of high level technical experts from the government.
ADPU is being reorganized with new members, moving to new premises and expanding its scope to new HR professional areas. There are many visitors to the web site www.adpu.org.
VENEZUELA
Venezuela is facing a historic crossroad: there are two very strong opposite political and social drives that are disputing the control of the government. It may well be that we are seeing the last great battle between communism and liberalism as development models in Latin America. Most of the government institutions have been destroyed and a large part of the “social fabric” is no longer existent. Strong presence of pro-government trade unions at major corporations. Referendum to take place on August Sunday 15th is key for the continuation or not of current regime.
There was a partial reform of the Labour Law that has restored some of the economic rights and benefits employees formerly had and that were changed in 1998.
A new ANRI board of directors took office as of July. New president is Paúl Rosillón.
The Association held its 19th Human Resources Management Congress last June.
ANRI will be called Asociación Venezolana de Gestión Humana as of October. Bylaws will be changed and a new corporate image will be launched.
Strategic alliances were signed in order to work on new joint projects with the Inter-American Development Bank and MERCER HR Consulting for Latin America.
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