Por H. Daniel Calabia
IDG News Service,
Buenos Aires Bureau
BUENOS AIRES –
Red tape and a
weak regional capital market are still a major obstacles to the development of
Internet exchanges and other businesses in Latin America, said the speakers at
a roundtable at the Second Forum of Maintenance and Industry, hosted by
Datastream Computec and held in Buenos Aires this week.
According to
Omar Vigetti, president and CEO of the investment consulting company
TheLatinGate LLC., the main problems for new business in the region are the
instability of the legal system, the dependency on international financing,
unstable democracies and the lack of a real capital market in the region.
For the
speakers, red tape is also a major source of difficulties: "We can only
have an Internet front-end," said one of the panelists. "Government
regulations still require that all purchase orders and invoices should be sent
on paper, personally or by traditional mail, in order to be legal and
binding".
Alfredo Leuco,
a well known Argentine journalist, who acted as a moderator to the panel, said
that according to a study released by the Swiss foundation FUNDES the
bureaucratic requirements are still so high in Latin American countries that
they still hamper many business initiatives.
For instance,
in order to open a small pasta factory in an Argentine city, with a capital
investment of only US$25,000 the applicants have to prepare 34 filings, pay an
average of $1,500 in separate fees to different state organizations (at 9
different banks!) and have to wait a minimum of 150 days before getting all the
necessary permissions.
These
bureaucratic meanders obviously foster corruption, "as there are always
'well-intentioned souls' who offer to push things along the line ... for a
price", said Leuco.
Vigetti, of
TheLatinGate, said that Latin America commanded only 1 per cent of the global
venture capital investment during 1999. North America received 73 per
cent, 20 per cent went to Europe, 4 per
cent to the South East Asia, and only 1 per cent to the rest of Asia and
Africa. He said, however, that there is a huge mass of money that could be
invested in Latin America, as soon as some of the problems that still plague
the region are resolved.
"Venture
capitalists need to see there is a capital market in the region" so that,
through an IPO, they can withdraw and make a profit from the companies they
help to fund. A real money market for new companies, such as the NASDAQ, simply
does not exist here, he said.
He added that
investors are very interested in new developments in the wireless market, ASP, and
wideband. "Dot-coms are no more", said Vigetti. What investors look
for is a nearer break-even point and the fulfillment of returns on investment
expectations.
The forum was
hosted by Datastream Computec (Computec Sistemas S.A.) for promoting the launching
of its new site iProcure, an Argentine version of their US iProcure initiative,
for industrial procurement. iProcure is also being launched in Mexico and
Brazil. Other speakers at the roundtable were Luis Rodríguez Fon, president of
Oracle Argentina, and Norberto Levín, president of Levín S.A., a procurement
services company.
TheLatinGate
LLC is a new "bussiness to investors" company that offers consultancy
services for venture capital investors. It can be reached at
http://www.thelatingate.com.
Datastream Computec, Buenos Aires, can be contacted at +54
11 4300 8008 or via the Web at http://www.dstm.com/latinamerica/RegionSur.shtm.
Its international electronic procurement market is at iprocure.com, and local
versions will be launched at http://www.iprocure.com.ar,
http://www.iprocure.com.mx and http://www.iprocure.com.br
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