Editor’s note: Jim Goodnight, co-founder and chief executive officer of SAS, co-chaired the World Economic Forum Latin America recently in Rio de Janeiro, Brazil. Goodnight is an active leader in the World Economic Forum, and in his speech as well as answers to an interview before the event, he stressed the importance of education.

Many of Goodnight’s remarks know no boundaries, however, when it comes to business. The insights from one of the world’s richest men on numerous topics make for good reading.

The following is the transcript of the interview as provided by the World Economic Forum and SAS to Local Tech Wire:

How are Latin American countries being affected by the present financial crisis and economic downturn?

Most Latin America countries did not experience the same financial system failure or housing price decline faced by many other developed nations, but they’ve certainly been affected by the global crisis.

It’s been forecasted that economic expansion in Latin America will decrease significantly in 2009, and the region will feel the effects of the crisis through things like higher external financing costs, falling commodity prices, fewer regional exports and reduced payments from migrant workers in developed countries.

The extent of impact on many Latin American countries will greatly depend on how closely their economies are tied to the U.S. and other global economies.

From a macroeconomic perspective, the current situation demonstrates the need to avoid protectionist policies that will affect first and foremost developing nations and low-income populations.

Latin America Governments need to work together to bring consistent and sound policy responses to the crisis.

I am confident that the World Economic Forum Latin America is coming at the appropriate time to evaluate and discuss the state of play and how best to respond to the situation.

Which anti-cyclical policies should be adopted to confront regional slowdown(s)?

The slowdown has impacted each country differently, and each country is applying different mixtures of monetary and fiscal remedies.

For example, Brazil has made announcements in the area of credit through its development bank and small, discretionary tax cuts in specific industries. But its interest rates are still one of the highest in the world.

But, as outlined by the World Bank, the Latin America region must ensure that the gains of the last few years are strengthened by the right policies.

Foremost is the need for countries to increase their support to its most vulnerable citizens in the form of social protection packages, such as Mexico’s "Oportunidades" or Brazil’s "Bolsa Familia." These are critical to lessen the effects of the slowdown.

It is also imperative for the region to avoid cutting expenditures on health, education, job training, skills development or vital infrastructure.

Closing the gap with other parts of the world in terms of human and physical capital must remain a priority for governments in the region. Again, investing in quality of education is not a luxury; it is a must for governments.

Once this crisis is over, the pace of globalization will pick up again and it is imperative that Latin America prepares for that phase.

What is the economic outlook over the coming years for Latin America?

It seems that Latin American economies will slow down but generally will escape severe recessions. Regional gross domestic product growth is projected to dip as low as 0.8% in 2009.

And according to the International Labor Organization, more than 2 million workers could lose their jobs. Some observers believe that the worldwide recession will only last this year; if that’s the case, Latin American economies should rebound and start growing again at accelerated rates.

In any case, Latin America governments need to stay focused on priorities such as quality of life, healthcare or education as they will prove the cornerstone for a healthy and durable post-crisis rebound.

How can companies in Latin America leverage the shifts in the global economy to create a competitive advantage?

I believe that for reasons tied to the structure of the financial markets in Latin America, most countries in the region have maintained relatively solid financial systems.

These systems that will help economies take off again as soon as capital flows return.

But I also see a great opportunity for further regional integration as a number of synergies between local economies and companies have grown significantly over the past years. Governments must be courageous and demonstrate leadership by going against natural instincts of preserving their own space. For obvious geographical, cultural and language reasons, Latin America has everything to gain from further integration. That would also be an additional advantage when dealing with other developing regions such as East Asia, where the topic of regional integration is discussed with accrued emphasis.

From a private business standpoint, the space made available could also present growth opportunities for regional companies at a time when multinational corporations need to sell assets at a low price. That way, Latin America companies will be better positioned in the global economy when the crisis is behind us.

One interesting factor is the multiplication of trade and business links over the past few years between Latin American and Asian countries. Brazil and China are a good example of that cooperation and I see that trend as a testimony to the importance of keeping open trade policies in place while further developing education, skills and infrastructure in Latin America. That way, Latin America can really serve not only as a gateway to the North American market but as a large, and integrated economic market of its own.

What are the leadership qualities, skills and personal values needed to take the helm today at the regional level?

There is a strong psychological element to the economic crisis that we must consider.

The perception that conditions can and are improving is just as important as any recovery strategy.

Leaders must be competent in dealing with unseen scenarios as well as convey confidence in their decisions, which must be made quickly and decisively.

And which must be based on proper evaluation of past models used in previous crises and current events. Leaders must not be paralyzed but must act as catalysts, making bold moves now to put us in a better position tomorrow.

As a business person myself, I also believe that business leaders must display a new form of leadership, based on a true understanding of globalization and human capital.

The biggest asset of our societies is people, and intellectual capital. Our responsibility is to make sure that this capital is preserved, and even enhanced, despite the current tensions.

Which key elements would induce a new development cycle in Latin America?

I would start with education. It needs to be promoted as a means to transform societies across the board, to enhance quality of life and give real opportunities to young people in a world marked by global competition. That is the only lasting key to success.

But taxation reform is also important in many Latin American countries. Let’s simplify the structure and sort out imbalances that impede investments. Brazil and Argentina are two good candidates for such measures.

In addition to taxation and educational reform, there is also the need to make governments more accountable and government actions more transparent. There are many examples around the world where people have benefited from such change. It is not a fancy requirement but a prerequisite to better lives for millions of people.

And then there’s the revision of regulatory frameworks and labor legislation that could encourage more business and spur innovation and economic growth.

Businesses need long-term vision and stability to invest. Everything that goes into that direction is a welcomed step.

But again, it is all about making sure that the future generations have the right education and skillset to help them compete find jobs and have quality lives. This is to me the only way out of the crisis, and not only for Latin America.