Latin America Driving Toward Sustainable Business Advantage

Like many other regions impacted by the global economic crisis, investors and business executives across Latin America have been forced to recalculate expectations of return on investment and corporate earnings.

Brazil, the largest of the Latin American economies, finds that the sheer size of its markets exposes them uniquely to the global economic currents, yet paradoxically, Brazil also finds its business growth engines somewhat insulated from the same challenges. While the full extent to which Brazil will feel the ripple effect of the global recession remains to be seen, there remains some confidence that its proactive economic steps will put the country on the road to economic growth perhaps sooner than some of its neighbors in the region.

The road to economic recovery and sustainable prosperity in Mexico will require it to decide how best to stimulate its national economy in the face of the global recession, to address the devaluation of the peso, and to balance its dependency on manufacturing exports to the United States.

The political, social and labor dynamics in the oil-rich economy of Venezuela have created an atmosphere in which enterprise management has to devote a great deal of energy and resources to adapt to the crises and potential crises created every day by political decisions and behaviors.

Like many of its neighbors in Latin American, Peru has experienced a number of crises in the last two decades. But unlike some of them, it has also witnessed steady GDP growth above 5% per year since 2002, having posted a 9% gain in 2008.

The economic ripple effects of the global financial crisis have reached Chile, where they are driving increased unemployment, reducing the corporation valuation and moving business leaders to suspend significant business decisions until the extent of its impact is fully understood. The focus, clearly, is on the bottom line.

One of the primary drivers of future economic development and expansion is the quality and depth of Latin America's labor force, including its senior management leaders, on whose shoulders rest both the responsibility and accountability for driving business performance in large regional and multinational companies.