WFPMA

1. FIDAGH UPDATE

The last FIDAGH's Executive Board Meeting was held in the city of Montevideo, Uruguay on October 17, 2007.

A new Board of Directors took over for the period October 2007 - October 2009:

Horacio Quirós, from Argentina, and Willy Von Mayenberger, from Colombia, were nominated to represent FIDAGH at the WFPMA Board as from April 2008.

The first 2008 meeting of FIDAGH Board was held in the city of Panama on March 30 - 31. The next Board Meeting will take place in Santiago de Chile on mid October, together with the meeting of the presidents of the member associations.

FIDAGH will take advantage of this meeting in Santiago to celebrate its 45th anniversary.

The next FIDAGH regional HR Congress (CIGEH) will take place in Buenos Aires, Argentina in September 2009. Dominican Republic has been elected as the venue for the CIGEH 2011.

Chile and Colombia have stated their interest in being considered venue for the upcoming worldwide WFPMA Congress to take place in the FIDAGH region.

II. GENERAL OVERVIEW

The main facts to be highlighted within the political-institutional field have been the presidential transition of Fidel Castro in Cuba to his brother Raúl and the tension in the Andean Area. This derived from military actions commanded by the Colombian government in its battle against the FARC and the process of hostage release, where representatives of other countries in that region have been actively involved.

In terms of Labor, according to the International Labor Organization (ILO), Latin America and the Caribbean, are showing a good job market performance. This is mostly based on the fact that during 2007, the region completed a five-year period of strong economic growth, powered by external favorable conditions of global economy as well as by a strong domestic demand. The countries within the region have kept on registering high rates of product growth, mainly stemming from the increase of investments and domestic demand, and also because of the good performance of baseline products exports.

On average, regional GDP has grown to a rate close to 4.8% during the last five years, the longest period of steady growth with a high expansion sustained since 1980.  But inflation in most countries has been going up as well. Accrued inflation up to September, 2007 for 18 countries within the region was 3.9% as compared with 3.7% for the same period in 2006.

A positive fact was the decrease of the regional urban unemployment rate, for the fifth consecutive year, which came down to 8.5%, the lowest level of unemployment recorded since the early nineties: Nevertheless, it is estimated that there are still 17 million people unemployed in the urban area of the region and for every unemployed adult, there are at least, two unemployed young people (reported by ILO).

Current projections show that unemployment will continue to drop mildly, but yet there is a need for major improvements regarding decent work, since there is still a high rate of informal employment in the main countries of the region. Between 40% and 60 % of workers belong to the informal economy and lack health insurance and/or pension benefits and it is necessary to move forward from mere recognition of job-related rights to their effective application.

Turmoil in international financial markets and the low performance of the US economy may affect the whole region, especially Central America and the Caribbean areas due to their close business ties with the US and to the money transfers made home by emigrant workers.  In the central first-world countries there are 30 million Latin-Americans who annually transfer some USD 60 million to their families. This amount is higher than the GDP of Bolivia, Nicaragua, Ecuador and Costa Rica together, and higher than World Bank and FMI loans to the region.

III. SUB-REGIONS AND COUNTRY REPORTS

a) Central America and Caribbean FIDAGH

Costa Rica

Regardless of delays caused by the Opposition to current government, the TLC Complementary Agenda continues, although an additional term of many months shall be required to get its approval. There is great concern among companies due to the new competition that this opening will bring about. Hiring technical and bilingual staff already seems to be a difficult task.

The Costa Rican Human Management Association [Asociacion Costarricense de Gestores de Recursos Humanos, ACGRH] keeps on growing and gaining influence; the number of colleagues on the mailing list who get information about ACGRH activities has tripled during last months.

Dominican Republic

Implementation of DR-Cafta establishes challenges and opportunities for the Government, as well as the Business community; it is considered relevant for the business stability and to continue recruiting and withholding Human Capital. The development of strategic alliances in order to optimize Training investments has proved to be quite a challenge.

The government's third year has begun and there were some changes in staff. Safety in the city is improving. A Health Family Insurance (HFI) has been established. Companies favor and support HFI implementation, integrating employees (beneficiaries), employers and Government’s needs. 

The Dominican Association of Human Management Administrators [Asociación Dominicana de Administradores de Gestión Humana – ADOARH] renewed its Executive Board; its new chairman is Víctor José Herrera. The Association has established a strategy of having a strong position and opinion in matters of national interest. Nowadays, ADOARH is invited to different Forums to establish and influence on national interest discussions; the number of associates has increased and it held a successful VIII Congress with 400 participants.

Guatemala

Nearly a year after a FTA has been signed with the USA, there have been improvements in the economic field, although the expected level has not been reached yet. Organized crime continues striking hard, through drug traffic, corruption that has infiltrated in the government and security agencies, while juvenile gangs constantly keep the population ill at ease.

The lack of well trained people certainly has made an impact on companies efficiency, and increased the demand for better qualified workers.  There is also a demand for qualified and highly trained personnel from neighboring countries, which is an additional difficulty for Guatemala. Selection and hiring processes for baseline positions are also slower.

The Guatemalan Human Resources Managers Association [Asociación de Gerentes de Recursos Humanos de Guatemala] has participated in the drawing up a basis for an Educational Improvement Project in the country, in coordination with the Department of Education and the International Development Agency (USA).

Nicaragua

No comments.

Panama

Panama signed a Free Trade Agreement with Guatemala, for the purposes of consolidating business relations and to encourage Central American integration. Guatemala is Panama’s second business partner after Costa Rica, and was the last country to sign this kind of agreement within the region.

The solid growth shown by Panama offers many job opportunities for professionals, since there is a great demand for skilled personnel. Nevertheless, there are still deep concerns about the actual availability of qualified personnel, especially for technical positions. The government is applying active policies to enhance training and job certifications through the INADEH a nationwide training institute. This growth also encourages the carrying out of infrastructure works. The building industry is very important and the government has enacted an executive order which regulates health and security aspects for this industry.  

Increases in fuel prices are making an impact on the prices of the Family Shopping Basket (FSB) and baseline services. Workers' demands for salary adjustments to compensate this increase keep growing. 

In January, 2008, the new ANREH Executive Board took office for the period 2008-2010 with Jeannette Karamanites as chairwoman.

b) Andean FIDAGH

Bolivia

President Evo Morales continues having some difficulties on the domestic front and conflicts do not end, nor do the ethnic and regional differences which foster discussions regarding autonomies that threaten the integrity of the Bolivian territory.

Legislative changes have established the nationalization of mines and hydrocarbons and modifications in labor legislation creating:

- Barriers for workers forced termination

- Mandatory increase in salaries (5%), applicable to public and private companies

- Recognition of Sunday salary for productive area

A real challenge for Human Resources professionals is to keep up current people management systems, taking into account the new social and political reality that the country is going through. 

ASOBOGH has overcome its first years of existence, has reinforced its identity, influence and strategy. Recently, it has reviewed its organizational structure and has added an Executive Director.

Colombia

The diplomatic conflict between neighboring countries that started in anti-guerrilla actions was solved, and relations were reinstated. The reconciliation took place at the Rio Group Summit, held in Santo Domingo, Dominican Republic.

The economy’s good health, together with a sustained growth of between 5% and over 7% not only reflects business' behavior but also outlines the path in the dynamic for new investments and business agreements which gives a new thrust to corporate activity.

A judgment by the Constitutional Court will enable thousands of people who had only occasionally worked at working cooperatives to assert and claim their labor rights. The new regulation has confirmed that people affiliated with these cooperatives have the same labor rights as those of other employees.  The previous argument was that no employer-employee relationship existed.

The Colombian Association of Industrial Relations and Personnel [Asociación Colombiana de Relaciones Industriales y Personal – ACRIP] changed its name to Colombian Federation of Human Management “ACRIP”, created 3 operating departments: Human Development, Labor Affairs, and Social Security and chose Iván Darío Arenas Jaramillo as Chairman. 

Ecuador

Rafael Correa Delgado took office as President of Ecuador. The present government is determined to regulate the hiring system of Outsourced personnel because they deemed it to be a labor exploitation system.  He suggests that the whole region should adopt a single labor policy, which may be a way to integrate Latin American countries.

ADPE Association has again elected for a new period its managing executives, who had managed to successfully solve institutional and financial problems inherited from previous administrations, established a new strategy and reinstated its image.

Peru

For the very first time in the history of Peru a former president is being judged (Alberto Fujimori) for corruption and crimes against humanity. A Free Trade Agreement (FTA) was ratified with the US, which will foster the growth of Peruvian economy.

Mario Pasco Cosmópolis, ex President of the Peruvian association and ex President of FIDAGH was appointed Minister of Labor.

APERHU is implementing an aggressive growth plan, coupled with the association’s presence, and it has launched a new web page and created a Forum that receives contributions from specialists in Human Management for the Labor Reform promoted by the Government, which was submitted to the Minister of Labor.

Venezuela

Oil prices have remained at record high levels, which produced an income level without precedents for Venezuela and enabled the government to keep up the social and people oriented programs that were implemented recently.

The five revolution engines, which are the backbone of the Venezuelan Socialist System (according to the sequence established by President Hugo Chavez) are:

• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Fast Track Law (Direct way to Socialism),
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Constitutional Reform (Socialist Rule of Law),
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Moral and Lights (Education with Socialist Values),
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">The New Geometry of Power (Socialist reorganization of the nation's geopolitics) 
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Explosion of Community Power (Leading, Revolutionary and Socialist Democracy)

Recently, the President of Peru had a political downside when his attempt to amend 33 articles of National Constitution failed. These articles were aimed, among other things, to gain more power and autonomy.

The definition and implantation of a new model called "Bolivarian Socialism" is expected shortly; this establishes a new model for labor relations, based on the fact that jobs are a social fact, rather than an economic one, companies must be socially profitable; this is the outstanding feature of companies.

Venezuela is becoming a case to be studied, and closely followed-up by other countries, since the model being implanted in Venezuela is very different to what has been known so far, and is being closely monitored by its neighbors in the region.

FIDAGH – SOUTH

Argentina

Cristina Fernandez de Kirchner took office as President, replacing Nestor Kirchner. Measures taken during the first months of government have proven that the only relevant modification was the change to another player in the most important government position. The economy continues evolving positively, but a short-term vision is becoming more and more evident, and the ever increasing inflation is causing a lot of concerns.  The government is facing the cost of having used “cosmetic surgery” for the presentation of economic indicators and some economic and tax decisions have placed it in a difficult position vis-à-vis primary sectors of the economic activity (such as agriculture, farming and cattle breeding) which are very important for Argentina.

An improvement in the industrial sector has been noticed, mainly due to the substitution of imports and growth and better specialization in the S&M businesses.

More economic activity, together with a gradual reduction in Unemployment, are generating various disagreements and conflicts with trade unions, and an ever-growing demand for higher-salaries, which makes evident a human resources shortage in some areas, especially technology and IT.

There have been some changes in labor legislation, in order to gradually eliminate the so-called “Luncheon Tickets” (Accor, Sodexho, etc.) provided by companies.

ADRHA has launched a new publication: "ERGO”.

Brazil

President Luiz Inacio Lula da Silva is fostering a tax reform for the purposes of generating a better distribution of income. Brazil is becoming an unquestionable leader in Latin America. It continues representing a magnet for foreign investments, it is a producer and exporter of raw material and finished products and every major investment favors this country. At the same time, Brazilian businessmen are increasingly investing in other countries of the region.

The government raised monthly minimum salaries by 8%, reaching the equivalent of USD 227/ month.

The Central Bank of Brazil expects higher inflation and growth for 2008, while the Brazilian economy will maintain its expansive cycle started in 2004, even within a scenario of global slowdown.

The GPD expansion expectation is 4.8% and 5.2%, with an even higher impact on industry and construction due to heavy domestic consumption.

The Central Bank also expects an increase of nearly 12% in investments, an estimated annual inflation of 4.7% and an unemployment rate close to 9%.  A strong accumulation in reserves keeps decreasing the country’s exposure to external risks, while consistency in macroeconomic policies is maintained and the domestic demand has strengthened.

The Presidents of Venezuela y Brazil agreed to speed up the energy integration between both countries and have discussed the matter of building a joint pipeline which would extend from Venezuela to Argentina. Both leaders said that they were making history by joining countries that have ignored each other for decades and had depended on USA and Europe. Other initiatives discussed were the projected creation of a “Southern Atlantic NATO” and the integration of Venezuela to Mercosur.

Chile

The government lead by President Michelle Bachelet had major changes in the cabinet, mainly in the Interior, Agriculture, Economy and Public Works portfolios. “TranSantiago” the transport plan which generated a year of chaos and changes in the national government, is beginning to work properly.

In one of the most ethical countries of the region, some corruption or more administrative disorder has been noticed, not without concern, in the State Railways, Chilean Sports and the Department of Education. They are talking about some unscrupulous vendors that have used USD 550 million of public resources, without any backing or any explanations. 

There have been changes in the Chilean Social Security legislation which dated back to 1981, and was one of the most modern in the region since it was based on capitalization and the creation of AFPs (Pension Fund Administrators). It is expected that this reform shall have a major impact on the Social Protection Policy, for young people, workers, pensioners and "Housewives" who will be entitled to collect a Pension. This also represents a strong change in the capital market and enables the addition of the Public Sector to the Compensation Fund, comprising over 7 million customers of the private and public active sectors and the non-working sector and pensioners. One of these AFPs is La Araucana, main Sponsor of the Chilean Human Resources Executives Circle [Círculo de Ejecutivos de Recursos Humanos de Chile - CERH Chile].

Miguel Ropert was reelected as President of CERH Chile. Carlos Fuentes Bizama continues to be ill, but stable, despite his serious condition.

Uruguay

There have been changes in the Cabinet. The country remains stable and with a good performance, but the loss of competitiveness in small companies continues to a cause of concern.

Since January 1, 2008 a Health Integrated National System (Sistema Nacional Integrado de Salud – SNIS) was put into effect, which provides health insurance for workers and their close relatives.

Government is forcing companies by decree to take care of occupational safety and make health issues became effective by creating committees formed by employers and associates. 

Regulations have also been issued to put restrictions to manual transport of cargo performed on regular and repetitive basis by workers in areas of the economic activity, such as bags of cement, flour, sugar, and rice and farm products (fruit and vegetables).

The government was unable to reach an agreement with Corporate Chambers to pass a law of Collective Bargaining Agreements. Businessmen fear there may be an increase in labor conflicts and an implementation of extreme union measures.

Paraguay

No comments

IV. CHALLENGES FOR PEOPLE MANAGEMENT FUNCTION

The main challenges to be faced by HR professionals in the region are diverse in nature and number. Nonetheless, judging from the trends, four areas of attention may be identified:

• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Coping with growth and the difficulty to attract and keep qualified personnel, especially in the areas of technology and IT.
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Current inability of the educational systems in some countries to provide these qualified resources.
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Adapting work processes to legislations that set restrictions for outsourced jobs.
• http://www.wfpma.com/images/bullets.gif); list-style-type: initial; list-style-position: initial; ">Adapting to new legislations which establish limits for benefits such us luncheon tickets and adding some expensive benefits in health or pension areas.

V. 2008 EVENTS