Trust between public and private institutions and socially conscious business practices are key to successful public-private collaboration on developmental projects in Latin America, panelists said at a March 18 event. 

Global business leaders at the 2022 Latin American Business Club (LABC) Conference discussed the best practices to create shared values among companies and communities and foster public-private partnerships (PPP) — collaborative projects among government agencies and private sector firms — for the advancement of Latin American economies. The LABC, a Georgetown University student-led club that strives to promote Latin American business across campus, hosted the event with the support of Georgetown University’s Latin American Leadership Program (LALP). 

PPPs are critical to the economic development of Latin American countries because they support crucial infrastructure, according to Manuel J. Balbontin, Chairman of Georgetown University’s Latin American Board and Partner and founder of Compass Group, one of the leading independent investment advising firms in Latin America.

“If the countries do not invest in infrastructure, the countries don’t grow,” Balbontin said. “You don’t have roads, you don’t have ports, you don’t have airports, you don’t have hospitals, you don’t have schools, you don’t have water, or sewage facilities. So all those are infrastructure projects that improve the quality of life, improve the mobility of the population and improve the competitiveness of all these countries. That is critical in the discussion.”

PPPs are a popular tool for economic development in Latin America with the largest number of PPP projects in the world since 1990 being developed in Latin America and the Caribbean, according to a January 2020 study by the Inter-American Development Bank (IDB), the largest source of development financing for Latin America and the Caribbean.

PPPs are difficult to implement because of distrust between sectors, according to Myriam Guadalupe De la Vega, Managing Director and CEO of Almacenes Distribuidores de la Frontera, a private company which owns and operates a chain of stores in northern Mexico.

“We’re in a difficult position, we distrust each other,” De la Vega said. “I think we need to find a way to work this out so we can have our PPPs work, and it can be done. We just have to have a common goal and really want our projects and have really good leadership for it to work.”

The private sector tends to distrust that governments have their best interests in mind, which hurts investment and productivity, according to a January 2022 survey by the IDB. The report recommends that governments increase accountability and oversight organizations to rebuild trust in partnerships.

Ricardo Ernst, professor at the McDonough School of Business (MSB) and Executive Director of LALP, moderated the panel and presented his new book “From Me to We: How Shared Value Can Turn Companies Into Engines of Change”.

The key to fostering PPPs is creating value for all stakeholders of a company — not only the shareholders who own company stocks — which Generation Z is particularly poised to do, according to Ernst. 

“You need to change the view from shareholder into stakeholder,” Ernst said. “How do you change ‘what’s in it for me?’ into ‘what’s in it for us?’ And actually, what is very fascinating, I have found that that is a concept that your generation embraces more significantly than my generation.”

Generation Z can contribute to creating shared value and support developmental projects in Latin America, according to Isabela Legaspi (COL ’22), founder and president of the LABC. 

“Not everyone is going to jump into the public sector in Latin America, that’s a huge feat,” Legaspi told The Hoya. “But I think that learning as much as you can, and if you end up working at a large corporation or if your family plays a large part in the private sector and any country in Latin America, to implement that and to implement the ‘Me to We’ mentality and to take a leap of faith and to maybe participate in a project.”

Ernst said that shared values are crucial for a mutually beneficial relationship between businesses and society. 

“When you put a business model, you need to make it sustainable, and that is the important thing about it,” Ernst said. “So what exactly is shared value? Well, it’s the intersection between corporate performance and the society. That is what shared value is all about. it’s not enough to just consider what is good for the company, but what simultaneously serves society as well.”