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Inter-American Development Bank (IADB) The Institutional Capacity and Finance Department Francesco LANZAFAME Cultural Industries in Latin America and the.

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Presentation on theme: "Inter-American Development Bank (IADB) The Institutional Capacity and Finance Department Francesco LANZAFAME Cultural Industries in Latin America and the."— Presentation transcript:

1 Inter-American Development Bank (IADB) The Institutional Capacity and Finance Department Francesco LANZAFAME Cultural Industries in Latin America and the Caribbean: Challenges and Opportunities Culture as an Engine of Economic Growth and Social Inclusion in the Americas Organization of American States Washington D.C. October 1, 2007

2 Culture: Determines the community’s identity and sense of belonging, enhances quality of life and self-esteem; Is the basis to develop social capital; Helps build social cohesion; Has an influence on the recognition and identification of community values, factors that are important for the establishment, preservation and practice of democracy (North, 1990). Culture and Development

3 IADB Instruments in Cultural Activities Loans and Technical Cooperations MIF IADB Cultural Center Inter-American Culture and Development Foundation

4 The IADB main policy areas to support the development of culture: Three main components: Cultural heritage rehabilitation, including historic centers, archeological sites and intangible heritage. Institutional strengthening and training. Cultural Industries development Two examples: Quito Salvador de Bahia

5 Quito Historical Downtown Cultural Heritage component Rehabilitation of public spaces and emblematic patrimonial buildings with the public and private sector; Social sustainability of the project trough the establishment of:  mechanisms of participation for residents and users of the area;  a specific housing program for the area in order to control gentrification;  a program to support traditional economic activities existing in the area. Promotion of tourism trough improved security, environment, and services.

6 Quito Historical Downtown Institutional component Creation of a public/private institution for the management of the Historic Center. Creation of incentives to promote private sector investments in the area. Creation of the “Fondo de Salvamento” for the rehabilitation and maintenance of monuments. Cultural Industries component Rehabilitate existing museums and libraries. Recuperation of the “Teatro Sucre” and the building for the new “Museo de la Ciudad.” Support SMEs related to arts and crafts and traditional products.

7 Salvador de Bahia Cultural Heritage component Rehabilitation of public spaces and heritage buildings. Housing program to attract residents to the area. Promote tourism trough improved security, services and environmental upgrading. Institutional component Create incentives for private sector investments in the area.

8 Salvador de Bahia Cultural Industries component Support the establishment (in the historic center) of businesses related to traditional products. Financing of a specific project and investments to integrate culture and tourism and create a “cultural district.”

9 The IADB Portfolio and Pipeline In the last 10 years the Bank invested: US$ 630 million to rehabilitate central urban areas (46 operations [loans and technical cooperation]). US$ 102 million in cultural tourism (23 operations [loans and technical cooperation]). Currently, the Bank is planning or preparing: Operations for more than US$ 40 million to rehabilitate central urban areas. Operations for more than US$ 300 million in tourism.

10 1) Is it possible to develop local sustainable cultural industries in LAC? 2) Can cultural industries play a dual role of economic driver of growth and of cultural patterns? 3) Can public policies promote development in the sector? 4) What are the successful (and less successful) practices in the sector? 5) Is performance in the sector linked to private-public and/or international partnerships? Key research questions on Cultural Industries in LAC

11 Economic component evaluates i) economic impact; ii) available data; iii) private sector investment; iv) role of the local culture, tradition, and resources in the production of cultural goods; v) impact of international trade; vi) opportunities and market niches. Cultural component analyzes i) cultural identity and cultural heritage values; ii) structure of the sector at the country and regional levels; iii) policies, strategies, and structural similarities in terms of language and cultural closeness. Institutional component studies i) regulation and agencies or entities in charge of policy-making; ii) government contributions through programs, grants, or loans; and iii) credit and business support services for existing and emerging firms and artists. Cultural Industries in LAC: areas of investigation

12 The term cultural industries in the IDB study refers to those sectors that are directly concerned with the creation, production, and distribution of goods and services that are cultural in nature and that are usually protected by the copyright. Based on this definition, cultural industries are a set of sectors that offer: 1) service outputs in the fields of entertainment, education and information (e.g., motion pictures, recorded music, print media, or museums) and 2) manufactured products through which consumers construct distinctive forms of individuality, self-affirmation, and social display (e.g., fashion clothing or jewelry) (Scott, 2004). What are Cultural Industries Moreover, following O’Connor (1999), the study focuses on individuals working in cultural industries with cultural occupations (for example, architects, librarians, authors, journalists, graphic designers, actors, etc.) and without cultural occupations (for example, in the editorial sector, employees in the printing industry).

13 Structure of Cultural Industries

14 One of the fastest growing sectors of the world economy, with forecasts placed at a 10 percent annum growth (UNCTAD, 2004) Constitute an important and growing element of contemporary economic systems: In LAC, the average contribution of this sector to GDP is around 3.5 to 4 percent (not including the cultural tourism sector) In Europe, an average of 5 to 6 percent In the US, 7 to 8 percent Contribute to creating and maintaining local cultural values Economic Impact

15 Contribution to GDP (%) Argentina6.6……………… Brazil ………………… Chile … … Colombia…… …… Ecuador……………0.8……1.79………… Mexico5.4…………5.7………………… Peru………………… Paraguay……11111……………… Uruguay……… … Venezuela……… …… 2.3… …… Source: Authors’ elaboration on country level data from Ministry of Culture of Argentina, Convenio Andres Bello, and The Competitive Intelligence Unit. Included sectors: Editorial, Audiovisual, Phonographic, Visual and Performing Arts, Multimedia, Sports.

16 Contribution to Employment Country Contribution to Employment (%) Year Argentina 3.2%2004 Brazil 5%1998 Colombia 27,724 employeeVarious data Chile 2.7%Average Mexico 3.65%1998 Paraguay 3.3%1992 Uruguay 4.9%1997 United States 5.9%2001 Source: Authors’ elaboration on OAS (2004) and Piedras (2004).

17 Some Common Features across CI Often employ high-skill, high-wage, creative workers, and can create local sustainable jobs Environmentally friendly Densely interconnected Based on local, tacit know-how (e.g., a style or a sound) Contribute to the quality of life in the places where they congregate Mostly medium and small enterprises (SMEs) Some sectors tend to agglomerate in urban areas Other sectors (crafts, gastronomy, and cultural tourism) are also present in rural areas

18 Main issues in LAC (1) Need to define the role of the state and public policies Lack of reliable and internationally comparable data Lack of legal and regulatory frameworks Problems related to intellectual property rights and piracy Lack of incentives for private investments and alternative sources of financing Difficult access to credit (lacking collateral and guarantees)

19 Main issues in LAC (2) Lack of coordination among : –public institutions –public and private actors –private actors Problems related to distribution Need better regional market integration Treatment in international trade agreements and risk of being absorbed by globalization and loosing local cultural contents and identity Low managerial skills in the private sector (entrepreneurs are usually artists)

20 Possible interventions at the local, national, and regional level Improving trade and regional integration policies Rationalizing fiscal policies and credit access Strengthening institutional and financial capacity Improving the regulatory framework Supporting projects related to CI, and Fostering technology innovation and infrastructure

21 Inter-American Development Bank (IADB) The Institutional Capacity and Finance Department Francesco LANZAFAME Thank you Culture as an Engine of Economic Growth and Social Inclusion in the Americas Organization of American States Washington D.C. October 1, 2007


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