Written by guest blogger, Rebecca Dossantos from the Biz Latin Hub Group.
Latin America is often considered the final frontier for many British exporters, who are more accustomed to finding easier pickings closer to home and in English-speaking countries. However, huge potential waivers in the face of economic uncertainty in the Latin American region – Between 2011 and 2015 Britain built up a trade surplus with South America, and in 2015 the UK exported £7 billion in goods and services to Latin America.
A very British history…
Most British entrepreneurs are still unaware of the historic links and goodwill that exist between Latin America and Britain. After the end of the Napoleonic Wars, many a British soldier took-up arms with the libertadores to ply their trade in the battles of independence from Spanish and Portuguese colonial rule. In 1808, Latin America represented 40% of British exports.
The good times continued as the Brits were integral in the growth of rail networks around the region, particularly in Argentina and Brazil, with Welsh farmers taking their expertise to the mountains of Patagonia on the promise of a new and better life. Agricultural products were once negotiated on the docks of Guayaquil in Ecuador in Pounds Sterling, whilst Latin American governments predominantly sought finance from British Banks.
Despite the great expanses of the region and the geographic and cultural diversity, brand Britain has rarely been in such a privileged position in Latin America. Thanks to the London Olympics and a resurgent Royal family in the global public eye, the hungry consumer market and growing middle-class of Central and South America is more aware than ever of the history, prestige and quality of British goods and services. Brexit has also sparked a renewed drive for British businesses to engage in Latin America in order to strength the countries global presence and power. British entrepreneurs are hoping to capitalise on enthusiasm stoked by the Rio Olympic Games, for example, forty UK companies won contracts worth in excess of £150m to supply goods and services for last year's Olympic and Paralympic Games.
Why should Latin America be important to me?
Latin America consists of an impressive:
- 19 countries
- 14.1 % of the earth’s surface
- GDP of $5.294 trillion in 2015
- A combined population of 645 million (speaking either Spanish or Portuguese)
Since the turn of the century, steady growth and sound economic policies across the majority of the region have lifted more than 70 million people lifted out of poverty, with 50 million people joining the middle class between 2003 and 2011. For the first time ever, the number of people belonging to the middle class surpassed the number of the poor. According to the World Bank, Latin America middle class hit a historic high and in the past decade, the middle class in Latin America grew 50%, and now represents 30% of the population.
Diverse areas of opportunity
One of greatest opportunities in Latin America is mining. Undeniably, Latin America continues to grow as an attractive destination for mining investment and exploration. The region covers one-sixth of the Earth and conveniently produces an extraordinary amount of the three most important metals: iron ore, copper, and gold. According to the Australian Trade and Investment Commission
, Peru is the world’s second biggest producer of silver, third biggest producer of copper and zinc, fourth biggest of tin and lead, and finally the sixth biggest in gold. Mining is the driving sector of Peru’s economy and it is open to foreign investment (there are currently over 10 billion USD of FDI in the mining sector).
Another mineral in popular demand due to the recent technological advancements in electric battery cars, and lighter longer lasting batteries for our future iPhone is Lithium. Growing demand will see an increase in investor interest in Chile, Argentina, and Bolivia, which claim the world’s largest reserves of the mineral. Over the past decade mining investment has grown significantly and Latin America remains a hub for the global mineral industry. This region’s economy is heavily reliant on mining activity; for instance, in 2015 the mining sector represented 13% of all of Latin Americas GDP.
But the opportunities do not stop just in Peru and other mineral rich countries in Latin America. The growing, young middle class represents huge growth opportunities not only in consumer goods but also in services that underpin the growing middle-class, such as banking, insurance, healthcare, and social infrastructure. The increasingly globalised Latin consumer is attracting the arrival of many new British products and brands to the market, from Miss Selfridges in Santiago to the iconic Aston Martin on the streets of Sao Paolo, Burberry’s in Bogotá or London Pride beer in Lima!
Indeed, many of the needs of Latin American nations as they move from emerging markets to global players reflect the strengths of UK plc’s export offer: infrastructure, finance, insurance, pharmaceuticals, mining, engineering, security, environment, energy including renewables.
So what support is available to me?
The prospects of doing business in Latin America are more promising than ever and the team at Biz Latin Hub
is ready to help you take advantage of the UK opportunities in the region. We are a market leader in helping companies and individuals to live and do business in Latin America by providing a full suite of Market Entry Support and Back Office Services including, Market Investigation, Accounting, and Legal and Immigration services.
If you are planning on establishing a business in Latin America, please get in touch with our experienced local and expatriate experts who are dedicated to assisting our clients in navigating their way through the complexities of the Latin American business environment! With offices in Colombia, Peru, Chile, Mexico, Panama, Argentina, and Belize, we have an unparalleled reach across the LATAM region, and are well positioned to help companies enter and operate within the Latin American market-place, by providing multi-lingual services that are Reliable, Economic and Tailored to meet the client needs. For more information, please contact [email protected]