INTERNATIONAL ADVISORY COMMITTEE: PURPOSE, FUNCTION AND RECENT NEWS
MC's International Advisory Committee was established in 2001 with the aim of strengthening the Board of Directors' functions. It has met once a year since it was established. Committee members offer advice and recommendations on management of MC's global businesses from the perspective of enhancing governance, and on corporate strategy from an international standpoint. The committee members also report and exchange opinions on the geopolitical and economic conditions in their respective regions.
The committee held its 10th meeting in October 2010. The committee discussed the direction MC should head amid increasing uncertainty in developed nations, despite the worst period of the global financial crisis being over for the global economy two years after it began as a financial crisis in the U.S.
International Advisory Committee (As of October 18, 2010)
Note: Positions are as of August 1, 2011.
LETTER FROM AN INTERNATIONAL ADVISORY COMMITTEE MEMBER
I have served as a member of the International Advisory Committee since it was established in 2001. Each of our meetings has been host to lively debates and discussions on approaches to organizational structure and human resources, and business development in emerging markets, all from a global perspective. The diverse background of the committee members brings a variety of viewpoints to the discussion regarding vital topics and a range of advice is offered to management, which I believe has been beneficial for Mitsubishi Corporation in its global business developments efforts.
At the 10th International Advisory Committee meeting last year, the debate centered on the medium- to long-term outlook for the global economy. The backdrop to the discussion was the steady and continued economic growth in emerging markets, in contrast to the shadow of uncertainty being cast over growth in developed countries by protracted problems of unemployment and financial uncertainty in Europe. Debate also turned to Midterm Corporate Strategy 2012 announced in July 2010, where we shared input on the direction in which Mitsubishi Corporation appears to be headed. The highly knowledgeable opinions expressed by the committee members were invaluable for understanding economic circumstances and business in each region, and will likely play a critical role in helping to decide Mitsubishi Corporation's course going forward.
Initiatives targeting emerging markets hold a greater importance than ever before for Mitsubishi Corporation. A case in point is Latin America. This massive consumer market is made up of 20 countries and has a population of over 500 million. Some of the countries are also supply sources for the world’s resources. Examples include crude oil from Brazil, Colombia, Mexico and Venezuela, iron ore from Brazil, copper from Peru and Chile, and grains from Argentina and Brazil. In recent years, the prevailing political and economic climate has become increasingly more conducive for business. Already, intra-regional trade is extremely active via a number of free-trade agreements (FTAs) with multiple countries in other regions.
In this context, Mitsubishi Corporation has identified Brazil as one of its Strategic Regions, and is advancing a host of businesses there. But in order to capture the high growth expected for Latin America as a whole, Mitsubishi Corporation will also have to vigilantly monitor trends in the surrounding countries with which Brazil has deep economic ties. Undoubtedly, Mexico is a country with a clear logistics and energy competitive advantage in North America and it will keep on forging every significant business opportunity possible. Business in Latin America will invariably see competition grow more intense.
This is especially likely in the competition to secure natural resources given rising resource nationalism worldwide. This competition, in fact, is widely predicted to heat up with no end in sight. Companies from countries like China and South Korea, with government backing behind them, are aggressively entering the fray.
While certain countries in the region may present obstacles, including social problems such as underdeveloped infrastructure and poverty, as well as political instability, these are not the reasons to hesitate and miss out on clear business opportunities. Mitsubishi Corporation has developed its global business and chalked up many accomplishments over the years by joining forces with prominent local partners. The insights it has gained in the process will prove invaluable in Latin America.
When pursuing business not only in Latin America but all emerging markets, encouraging employees to gain insight into how things operate on the ground is one point that must not be forgotten. Along with showing due respect to the history and culture of each respective country and region, Mitsubishi Corporation should work vigorously to take advantage of local talented human resources. These two steps together should go far in making success a more likely outcome. In terms of business potential, one can imagine Mitsubishi Corporation partnering with a Japanese company with outstanding technology to produce high-quality Japanese products in Latin America. Japanese products have earned a strong reputation for their energy efficiency and environmental performance, and so can be expected to enjoy market acceptance. Mitsubishi Corporation can also contribute to local society by creating employment opportunities and through technology transfer.
For my part, I hope that my own insight and networks in Latin America may contribute to the success of Mitsubishi Corporation’s endeavors in the region.