Investment Opportunities In Latin America

By M. Isi Eromosele

Companies worldwide are discovering the enormous potential of the Latin American markets. Succeeding in the new Latin American markets is challenging because of the dramatic changes affecting various aspects of life throughout the region.

Globalization is having a dramatic but positive effect on most economies of this region. So are political changes that have seen democracy flourish in practically all the countries, ushering in economic reforms and deregulation. This has resulted in the dismantling of state monopolies, privatization and deregulation of various components of the infrastructure value chain.

Superb opportunities have emerged from a golden triangle of the Brazilian, Mexican, and Central American markets, which represent two thirds of the region’s market power. Investment opportunities abound in such sectors as consumer, retail, telecommunications, energy, health, and financial services, among others.

With astute planning and well crafted strategies, companies can successfully navigate through the value chain of industries ranging from manufacturing to finance and marketing.

A studied look at some important statistics confirms the presence of great potential market opportunities in Latin America. These include the growing sophisticated new Latin American consumers with increased earning power, changing demographics, changing economics, changing consumption patterns; a projected $1 trillion U.S. Latin market by 2012 and 600 million Latin American consumers.

Additionally, Latin America has some of the fastest growing market segments in the global emerging economies. With the growing use of technology, including the Internet throughout the region, the value chain is transforming planning, control, marketing, distribution, and customer service throughout the Latin American business and market worlds.

The key to business success within this region is to choose the right platform. It is also imperative that companies strive to understand the local cultures and the unique Latin American marketplace. There are dynamic and political forces that are transforming the region, raising its profile in the world economic scene. A spectacular example is the emergence of Brazil as a global economic power in such areas as energy, commodities, finance and manufacturing.

Companies interested in investing in Latin America would need to position their business interests in such a way as to grow and prosper in the flow of the region’s sometimes surprising but positive economic developments. Today, most countries have liberalized their currency controls so that there are few restrictions on currency conversion and capital transfers to and from the region. In March, Brazil largely ended its restrictions on international currency transfers and payments in Real, the local currency.

There are fewer restrictions on foreign investment. Generally, foreign investment is permitted in virtually every sector and there is substantial foreign investment from Spain, Europe, Japan and the U.S. in industries such as banking (particularly by Spanish and US banks), telecommunications and utilities. Restrictions, such as Mexico’s ban on the foreign ownership of oil interests, are rare.

A new and revived Latin America has emerged as an appealing investment environment for companies of various sizes. While there are challenges, the market opportunities and the rewards they offer outweigh those challenges.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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