LatAm Winners & Losers
In Latin America Business 2011: Best and Worst, the Latin Business Chronicle showcases a few winners and a few losers as they relate to Latin American business. In this passage, we choose to only highlight the best of this past year!
Dilma Rousseff and Ollanta Humala, both receive high marks in 2011 for their leadership, pragmatic styles and the economic surges experienced in Brazil and Peru respectively. Rousseff is in her first year as President, following the very popular presidency of Lula who was credited for initiating Brazil’s comeback strategy. She has already managed to surprise recent critics and is being recognized for:
- Boosting public efficiency through cost-cutting measures
- Privatizing airport terminals in anticipation of the 2014 World Cup and 2016 Summer Olympics
- Taking an aggressive stand against corruption
- Expediting the ousting of six of her ministers amidst corruption scandals
- And, controversially, maintaining a protectionist stance, propped-up by burdensome tax regulations (the worst in Latin America).
FDI fuels internal development
Humala, another adopter of Lula’s moderate doctrines, has also been praised for Peru’s continued success in attracting Foreign Direct Investment. And, despite his challenges in the Peruvian mining arena, Humala has scored big points this year from his country’s business community for placing three pro-business officials in his cabinet. Ultimately, his success can be attributed to his implementation of pragmatic economic policies while increasing spending on social reforms.
Free Trade Agreements - key to integration and growth
On the FTA (Federal Trade Agreement) front, two Latin American trading pacts stand out in 2011. First, the signing of The Colombia and Panama FTA’s, began as uphill battles, originally being turned down by the Bush Administration. However, Obama, urged and counseled by William Daly, his new Chief of Staff, signed both agreements on Columbus Day of this year. Colombia is actually the 4th largest, and Panama the 13th largest trading partner to the US in Latin America.
Finally, in Central America, the CAFTA (Central American Free Trade Agreement), which originally included El Salvador, Guatemala, Honduras, and Nicaragua, and later added Costa Rica and the Dominican Republic has just celebrated its 5th birthday. This smaller scale trading agreement has been successful in:
- Originally enabling Central America to have a competitive advantage over Colombia, Peru and Panama – countries that had to wait for their free trade agreements with the US
- Helping Central America reach an FTA with the European Union
- Positioning Central America as an attractive region for US and foreign investment
- Allowing member countries to benefit from cheaper prices on US goods
What it means to you
Overwhelmed by the foreign names and intricacies of this vast Latin American market? You have two choices. Wait for customers to beg for your product, or tackle the market head-on. You know the latter makes sense, but we know it feels pretty daunting. Let Consilium Global Business Advisors help. Contact us today to discuss how our deep experience in all Latin American countries can accrue to your business advantage.