Latin American Capital Markets

474 CATHERINE CHANDLER-CRICHLOWthe region. For example, many cultures use a range of noninstitutional savings vehiclesthat have allowed them to become socially mobile, that is, to build homes and educatechildren. Indigenous savings and credit formats such as the "sou-sou" and "chaitey"in Trinidad and Tobago or the "meetings" in Barbados serve a similar role as the "consorcio"in Brazil or the "pandero" in Peru. While these models do not have the westernpredilection for institution building, they represent strong societal norms for assetaccumulation.The extent to which domestic savings from multiple small, closed savingsstocks is mobilized into larger savings flows of an institutional nature will be influencedby the extent to which the society trusts the corporate governance of those savingsinstitutions.There is therefore a weak lure to institutional saving strategies for some ofthese cultures. Even with some of the more adventurous investors, the purchase ofshares in profitable companies is not done for trading purposes. Rather, shares areoften perceived to be priceless family heirlooms to be passed on for many generations.Unfortunately, the half-life of many of these companies is quite short, and heirsinherit ornate pieces of worthless paper Central to the strengthening of capital marketsacross the region is the need for public education as well as professional developmentof the human resource base needed to implement the sectorIt is axiomatic that strong leadership is critical to defining and implementinga vision for capital market development. A review of the products and services offeredby professional associations and training institutions serving the capital marketsreveals a dearth of programs that focus on developing professionals with strong leadershipand management competencies. Latin America and the Caribbean are at thatstage in their growth that this component could be included in human capital modelsestablished in the region. Sustained growth of a sector would benefit from havinga combination of knowledgeable professionals and a strong vision for sector improvement.Conversely, sector growth would be impeded when there is not a criticalmass of knowledgeable professionals in the sector and there is not a unifying visionfor the growth of that sector at a domestic or regional level. Table 15-5 summarizesthe human capital components in place in Latin America and the Caribbean.A number of key insights emerge when the data on human capital developmentfor capital markets in Latin America and Caribbean are compared with those ofthe developed countries profiled in this chapter First, investments in physical infrastructurein the form of "bricks and mortar" in the region far outweigh those allocatedto developing the professional base and workforce to support the sector It isnoteworthy that for a region that currently has 16 stock exchanges that vary widelyin their size, volume of trading, and the sophistication of companies traded on theirexchanges, and 21 regulatory agencies, there is no single regional entity that identifies,Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub