This year, both Avina’s outgoing chairman and its new chairman have the pleasure of presenting Avina’s 2012 Annual Report. For the past few years, Avina has used the Chairman’s Message to share some impressions from the board on global affairs with an emphasis on Latin America and the work Avina is doing. This year is no different, although the transition from one chairman to the next allowed us to think together. As we began to discuss the year past and the one dawning, one thought seemed to us particularly appropriate to begin this message: there is no going back to the “regular” cycles of the past, welcome to the “new normal”!

 

2 012 left no doubt that variability and uncertainty is what will remain constant for the foreseeable future. Wherever one looked, once stable ground showed signs of buckling.  Europe teetered on the brink of sovereign debt oblivion with the Euro in the balance, while the United States perched on the edge of a financial cliff of its own making.  Meanwhile the Chinese economy fell back to “only” 7.8% growth, dampening the outlook for a worldwide economic recovery.  In our own region, the Brazilian growth machine sputtered (though thankfully with record employment), while Chile, Peru and Panama thundered forward and Mexico’s economy sprung back to life.  Businesses and households struggled to understand it all, as did governments.

 
The political terrain of 2012 was also uncertain.  China changed leaders but not its overall direction.  The United States kept the same leader, who proclaimed he would push for change.  The popular upheavals of 2011 in Tunisia, Egypt, Libya and elsewhere during the “Arab Spring” continued to send deep shockwaves to the south and east, even as those new governments struggled to establish order.  In Latin America, the PRI returned to power in Mexico and Fernando Lugo was impeached in Paraguay.  In Argentina, the Presidenta’s ship of state sailed through rough seas with some signs of discontent from anxious passengers as the pots sounded from the decks.

 
For Avina this uncertain global context was the backdrop for our five-year planning process, which allowed us to try to make some sense of it.  Amid the contradictions, a few trends stand out.

 
One trend is that the “emerging” countries of the world are more and more influential.   About 75% of world economic growth came from “emerging” economies.  That trend will continue.  Even though it may have avoided economic collapse, Europe will spend many years digging itself out of the rubble.  Japan continues to fight to stave off deflation.  Even if the U.S. avoids self-inflicted recession in coming years, it can look to only moderate growth prospects, many of these tied to the motor of emerging markets.   At the same time, burgeoning economies like Nigeria, Mexico, Turkey and the Philippines indicate that the ‘BRIC’ nations of Brazil, Russia, India and China are not to be the only emerging markets that merit attention.

 
Another trend is that democracy is spreading, but it is also diversifying, and at times looks like something else entirely, fueled by changes in communication technology and increased connectedness.  Even as established democracies in the West often appear dysfunctional, radical or hybrid governments rise to power through democratic means and are reelected by popular vote.  Since Egypt’s 2011 revolution that sent Hosni Mubarak from power, the world’s dictators have been put on notice that they must seek popular support or face chaos.  China too will certainly have to find its own path to democracy (as it did to the free market) due to a huge new middle class that may soon start to demand transparency and a voice in decisions.  Even Burma has finally moved towards a freer society.  In our own region, the one non-democratic country surely must take similar steps or face deepening marginalization and irrelevance. Representational government is on the march, with all of its destabilizing and unpredictable consequences.

 
Furthermore, the challenge of climate change is proving quite difficult to address at the international level.  No one would argue that the Rio+20 Conference achieved the ground-breaking success the world hoped for.  No grand consensus was proclaimed like in 1992.  No new spirit of international collaboration coalesced around shared challenges.  Instead, reports on the effects of climate change left no doubt that the world is progressing according to the worst scientific projections, and should expect the more dire scenarios that pleas for early concerted action had hoped to avoid.  The nine hottest years on record occurred since 2000.  In 2012 unpredictable extreme weather was the norm, including rogue storms of increasing intensity, droughts and floods.  Glaciers and sea ice continued to melt at unprecedented rates.  At the time of writing, inhabitants of Beijing have been ordered to stay inside as a toxic cloud hovers over northern China.  Yet international agreements have thus far proved largely ineffectual at changing behavior.


On a positive note, quality of life indicators are improving rapidly across the globe, even in some of the most persistent pockets of under-development.  The world appears on track to meet the Millennium Development Goal of halving poverty by 2015, and has already met the goal for access to clean water.  These are surely encouraging signs.  At the same time there is ample evidence that inequality is also growing apace.   And there are all too few examples of growth without increasing CO₂ emissions and reduction of natural resources.  As emerging economies grow and create wealth, they decrease poverty but also increase inequality and consumption of natural resources.  Natural limits to growth and the negative effects of wealth concentration represent twin threats to current social progress.


For Avina, these trends put the spotlight on a region like Latin America to innovate and lead.  Our region has a wealth of natural resources, bright economic prospects, promising demographics and a commitment to democracy.  It also has, as a region, one of the lightest ecological footprints relative to economic output and quality of life indicators.  An organization dedicated to sustainable development in Latin America, Avina believes in the potential for the region to “get it right”.  As influence shifts to emerging countries, Latin America could produce positive examples in a world searching for solutions.  However, if it is to fulfill its potential, Latin America will have to meet a number of daunting challenges.  Our five-year plan focuses on several of these, such as the creation of “public goods”, i.e. amenities accessible to everyone, the transformation of the economy through a proliferation of sustainable businesses, and stronger institutions and better policies through citizen action.  In each of our strategies we will prioritize these objectives.


In this 2012 Annual Report, you will read about the pillars of Avina’s institutional strategy for the next five years.  Each year in this report, we will update you on our progress toward making a difference for Latin America through concrete changes that benefit real people. The contribution of Avina and its allies toward producing change that matters is how we measure success, and we are pleased with our progress on these fronts in 2012.


A prime example of making strides is in the fight to reduce deforestation, where we can point to some real advances.  In the Ecuadoran Amazon, the Kichwa Sarayaku people won their case in the Inter-American Court of Human Rights against a company responsible for destroying forestland without community consultation. After the ruling, the Ecuadoran government announced a change in policy to avoid a recurrence of such conflicts.  In the Brazilian Amazon, several forest municipalities, like Alta Floresta, managed to exit the government list of worst deforesters, thanks to the combined effort of local government, business leaders and civil society organizations.  Also, in South America's tri-national Gran Chaco region, provincial governments in partnership with citizen environmental organizations have adopted satellite-monitoring techniques to stem the illegal removal of indigenous vegetation through better policing.

 
Avina also continued to support and participate in a regional network of sustainable cities that is changing how politics works in urban areas across Latin America.  Cities such as Córdoba in Argentina and Belo Horizonte in Brazil, changed their local ordinances to require mayors to communicate and report on tangible goals during their mandate which can be monitored by citizens’ groups.  In Brazil, 191 newly elected mayors (representing over 60 million citizens) adopted a common set of indicators to monitor progress in terms of quality of life and urban sustainability.  Also in Brazil different citizen groups came together to pressure the governments of the cities hosting the 2014 World Cup soccer matches to make a number of public commitments regarding inclusiveness, government transparency and actions on community-based priorities.


In a third example, the government of Chile for the first time announced a long term national energy plan and policy, the result of years of public debate and consultation.  When Avina began working with citizen groups in Chile in 2007 to improve national energy policy, there was very little in the way of national dialogue on the topic.  Avina supported the creation of a process of multi-stakeholder dialogue, engaging the government, energy companies, universities and civil society groups.  In 2010, Avina was co-organizer in a televised national debate by presidential candidates where different proposed scenarios for Chile’s energy future were compared and contrasted, leading to a new level of public dialogue.  In 2012, we were delighted to see the Chilean government announce a national strategy, incorporating many elements that emerged from this interactive process.

 
All of these advances arose from complex challenges that involved multiple sectors, organizations, interests, and countries.  The recipe for cooking up change is different in each case, but invariably it depends on the collaboration of a diverse group of actors around a common purpose in a dynamic environment.  As we look forward to the next five years and beyond, it seems clear that those institutions that know how to build collaboration and adapt to change are the ones that will thrive in the years to come.   At Avina we constantly invest in that capacity, as we continue to work with our partners to find opportunities for making positive changes that will benefit Latin America and the world for generations to come.  We have our work cut out for us, but thankfully, we are in good company.


Finally, we want thank the members of the Avina board for their commitment and contributions.  We also cannot overlook the vast contributions of Avina's founder, Stephan Schmidheiny. His vision for Avina to be an “open-ended learning endeavor” continues to guide us as we move forward.  We especially want to congratulate and offer our support to Avina’s new CEO, Gabriel Baracatt.  The board looks forward to great things from Gabriel and the Avina team, as laid out in Avina´s five-year plan.


We also want to thank all of those working for a better future across this wonderful Latin American region.  Avina is pleased to be able to dedicate its team and resources to the vision we share with our partners and allies for a more sustainable and equitable Latin America. 
Sincerely,

 

Brizio Biondi-Morra (outgoing Chairman)

Sean McKaughan (incoming Chairman)

Photo: Leo Barizzoni

Brizio Biondi-Morra and
Sean McKaughan

 

As influence shifts to emerging countries, Latin America could produce positive examples in a world searching for solutions.