New year, new start. Well, kind of. It’s still summer here inSouth America and a lot of people are still on holiday. It’s also Carnival next month, so let’s say we’ll start the year in March, ok?
Timing aside, what will 2015 bring for South America and what developments should you keep a close eye on? Focusing this time on the Southern Cone, this is my watchlist for British exporters:
1- Brazil: expect delays
Tough times for Brazil’s economy. Still lots of potential, but lots of challenges for the new (old) government this year, too, not only from the global context but also from internal problems such as corruption. Import restrictions don’t seem to be easing up at all. Thinking long-term and having a healthy cash flow are crucial here.
2- Argentina: bumpy road ahead
Economic , political and financial crisis. High inflation, corruption and intimidation scandals, shortage of basic goods (you’ve probably heard about the tampon shortage by now) and huge import restrictions. Nothing new. But there’s hope. Many think that the October elections could mark a new start South America’s second largest economy. As I said, one to watch. Can’t promise much yet.
3- Chile: are we there yet?
South America’s Perfect Peter economy (if you’ve read Horrid Henry, you’ll know what I mean) suffered a bit of a hitch last year. Can the new Bachelet government deliver stability , attract (or not scare away) investors (in infrastructure, mining and energy, for example) and cope with volatile commodity prices?
Chile is still an attractive economy for UK exporters, given its medium size, its Free Trade Agreement with the EU and its general ease of doing business. May it long stay that way.
4- Uruguay: beyond Mujica
Uruguay is kind of on standby as I write. As I said before, it’s summer, January is our holiday month par excellence, and we also have Carnival to look forward to. However, business resumes in March and we will have a new government from then (elected back in October/November, but they take their time here, you see).
Sorry, no more Mujica, but expect continuity, stability, respect for the law, a small but well-off market and some sound economic policies. A country that is attracting investors interested in the rest of Mercosur… and those just interested in Suarez’s land, too.
5- Paraguay: speeding up
Paraguay has been one of the fastest growing Latin American economies in the last three years, albeit starting from a very low base. I hear that Asuncion is no longer the under-developed capital city it used to be, and I have seen it featured in more and more lifestyle magazines later. But beyond the hype, what can Paraguay deliver for your business? If you work in agriculture/agribusiness or logistics, I’d say there are plenty of opportunities here. For other products and services, let’s wait and see…
We will look a bit more North next time, looking at Peru, Colombia and Ecuador – with a glimpse of Venezuela and Bolivia, too. So watch this space or sign up to our newsletter!