* Iberian, Latin American leaders hold summit in Cadiz
* All sides seek more investment
* Changing relationship amid differing economic fortunes
By Angus MacSwan
CADIZ, Spain, Nov 15 In past centuries, the
Atlantic port of Cadiz played a central role in trade between
Spain and its Latin American colonies, with merchants and
adventurers bringing treasure back to the mother country from
the mines and plantations of the empire.
In recent decades, Spanish and Portuguese businessmen
roamed the continent in a wave of investment known as the
But leaders meeting here for the Ibero-American Summit on
Friday and Saturday face a relationship that has changed
profoundly in the past few years. The former colonies may hold
the keys to their ex-masters' salvation.
Spain and Portugal's economies are just about shipwrecked
amid the euro zone crisis. Both have needed outside support to
keep afloat and their people have taken to the streets to
protest against austerity measures and job losses.
Latin America is for the most part prospering, with average
growth at more than 4 percent last year. It is no longer a weak
Plotting a new economic course and exploring new
opportunities in trade and investment in these troubled times
will be one of the main purposes of the Cadiz gathering.
"Before, Spain and Portugal could set the agenda," said
Ramon Pacheco Pardo, a Spanish, Portuguese and Latin American
Studies associate at King's College, London.
"Now the relationship is much more about the economy, about
necessity. Spain and Portugal really need those markets. It's
also an opportunity to sit down with countries that understand
what it's like to go through economic crisis."
The depths of despair for ordinary Spaniards and Portuguese
were evident in recent days. Millions of people took to the
streets in both countries and elsewhere in Europe on Wednesday
angry over cuts in welfare, pensions and public service jobs.
A woman in Bilbao last week committed suicide as she was
about to be thrown out of her house, shocking the nation and
prompting banks to reassess their policies.
One in four Spanish workers is now jobless in a crisis
driven by a property collapse in 2008. In Portugal, unemployment
is nearing 16 percent. Repeating a historical pattern, about
20,000 Spaniards moved to Latin America last year.
The Spanish chamber of commerce in Brazil said it had
received nearly 1,300 resumes in the past year from
professionals interested in working there.
"They are looking for opportunities that don't exist in
Spain at the moment," said Maria Luisa Castelo Marin, the
chamber's executive director.
Spanish companies also rely heavily on profits from their
Latin American operations to compensate for weakness at home.
Telecommunications company Telefonica said last
week it moved from loss to profit as a Latin American
contribution of 49 percent of revenues offset its troubles in
Europe. Banking giant Santander also takes more than 50
percent of its profits from the continent, a hefty chunk of that
"This summit is taking place at a time of great problems for
Spain and Portugal," Ibero-American Secretary General Enrique
Iglesias told El Pais newspaper. "The central theme is that we
are looking for a new relationship with Spain and Portugal."
He noted the frenzied activity by Iberian investors in Latin
America in the past 20 years and said more opportunities were
there to explore, including in energy, infrastructure and
"It is a very fertile field for Spanish firms," the veteran
Uruguayan diplomat said.
Iglesias cautioned, however, that Latin America was also
feeling the effects of the world crisis because of reductions in
exports to Europe and a slowing of growth in China.
BRAZIL ON THE RISE
Previous summits have often been dominated by strongmen such
as Cuba's Fidel Castro and Venezuela's Hugo Chavez, which
provided entertainment if little else. Neither will be present
this time and arguably the most important figure will be Dilma
Rousseff, the president of emerging powerhouse Brazil.
Spanish investment in Brazil stands at about 55 billion
euros. But any Spanish hopes of reciprocal investment - Brazil's
economy has overtaken Spain's in size - might be premature.
Rousseff is known to be worried about a possible Spanish and
Portuguese collapse. S he will stay in Spain after the summit for
meetings with Prime Minister Mariano Rajoy in Madrid.
Brazil's Embraer, the world's third largest
aircraft-maker, did open a factory in Evora, Portugal, last June
and steelmaker CSN acquired Spanish steelmaker Grupo Alfonso
this year. But these moves may not herald a new trend.
Latin Americans are also keen on winning more investment -
Peruvian President Ollanta Humala will also stay on after the
summit and drop by Portugal to tout Peru's attractions.
Spanish companies have run into their fair share of risk in
Latin America, with leftist leaders in Argentina and Venezuela
seizing assets as they nationalise sectors of their economy.
Spanish oil major Repsol lost half of its production after
Argentina nationalised its YPF unit in April.
In Venezuela, Telefonica had $3 billion in profits last year
that it has been unable to repatriate because of strict exchange
rules. There is also Spanish concern that Banco Provincial,
which is owned by owned by BBVA, could be in Chavez's
sights for nationalisation.
Argentine President Cristina Fernandez will not attend the
summit, sending her vice president in her place. Madrid worked
hard to get other leaders to show up following a poor turnout
last year that led to questions over its value.
Still, at least one Latin American held out hope to the
impoverished Iberians of calmer seas ahead.
"We have to enter into a bigger relationship with certain
economies because of their commercial power" said senator
Gabriela Cuevas, head of Mexico's foreign affairs committee.
"If right now Europe doesn't look so attractive, sooner or
later it's going to recover. So now is the time to prepare."