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A role reversal as former colonies meet former colonists at Ibero-American summit

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Spanish press described it more succinctly as the country seeking a “lifejacket” from Latin America.

The economic imperative

Spain’s economy has been free-falling since the crisis began in 2007, only managing to pull off discreet growth in 2011. Record unemployment tops 25 percent and continues to rise, and most forecasts expect further acute economic contraction in 2012 and 2013, with only modest recovery thereafter.

Portugal is in worse shape, and its finances are already being supervised by the European Union and International Monetary Fund after requesting a bailout.

But Spain’s economy is much larger and its downturn reverberates much more globally. Spain’s biggest banks and companies are already making most of their profit in Latin America rather than at home; its government is seeking, not offering, foreign investment; and perhaps most telling of all, Spaniards are increasingly migrating to Latin America, not the other way around.

Indeed, that is actually one of Spain’s best arguments for greater cooperation with Latin America, Mr. Iglesias said. “Now there is emigration to Latin America of qualified human capital” that the region can profit from. Additionally, “now there is capital in Latin American that can be mobilized” as investment to Spain and Portugal.

The main goal of the summit, organizers say, is to reach an agreement on how to increase multilateral cooperation of small- and medium-sized companies, which account for 95 percent of the companies on both sides of the Atlantic and for 60 percent of the labor force.

Latin America, with a population of 550 million, has made impressive strides to reduce poverty this century, down from 50 percent to around 30 percent, while middle classes have increased around 50 percent and continue to swell, according to the World Bank. Meanwhile, poverty is increasing in Spain and Portugal.

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