LATIN AMERICA STRATEGIC PEST  ANALYSIS  2012
Upcoming SlideShare
Loading in...5
×
 

LATIN AMERICA STRATEGIC PEST ANALYSIS 2012

on

  • 1,974 views

Latin America Strategic PEST Analysis - 2012 ...

Latin America Strategic PEST Analysis - 2012

LATIN AMERICA Up dated PEST ANALYSIS.

Very useful information to include in any of your reports on the Latam region.

I. Introduction
II. Regional P.E.S.T. Outlook
III. Countries
i. México.
ii. Panamá.
iii. Venezuela
iv. Costa Rica
v. Colombia
vi. Perú
vii. Chile
viii. Brazil
ix. Uruguay
x. Argentina

Statistics

Views

Total Views
1,974
Views on SlideShare
1,929
Embed Views
45

Actions

Likes
1
Downloads
33
Comments
0

1 Embed 45

http://www.slashdocs.com 45

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

LATIN AMERICA STRATEGIC PEST  ANALYSIS  2012 LATIN AMERICA STRATEGIC PEST ANALYSIS 2012 Document Transcript

  • www.hd-cg.com HD LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS 2012© April 2012 P age |1H D
  • LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - I. INTRODUCTION Latin America has come of age as a region of relative political and social stability that is attracting ever-greater attention in a global context of financial and economic crises in the more developed world. This is despite the many challenges that the region continues to face in its efforts to attain development while consolidating and expanding social achievements. It is in this scenario that former Brazilian President Luiz Inácio Lula da Silva has been fond of repeating that “this is Latin America´s decade”, and international economic indicators would seem to bear this out. According to preliminary World Bank statistics, overall economic growth in Latin America and the Caribbean will be 4.1% in 2012, above the world average of 3.6% respectively. The region’s relative stability, maturing markets and more dynamic growth compared to developed nations has also made it an attractive place for investments from those parts of the world. Thus, the dynamic in the region has gradually shifted toward investments with a more long-term vision and involving greater transfer of technology and knowledge. This growth in all areas, both commercial as well as in terms of public services, is naturally reflected in the rising use of new technologies of all types, which are reaching the region at ever-faster paces, practically eliminating the delays in uptake that used to characterize such progress. This is especially so with Information and Communication Technologies (ICTs), as they allow countries and enterprises to “leapfrog” into the new world economy without the tremendous capital expenses that would have been required in the past. However, it should also be noted that this development is not happening at an even pace throughout the region and that, in fact, the larger and relatively more sophisticated markets of South America and Mexico have clearly broken away from the pack.© April 2012 P age |2
  • LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - II. REGIONAL OUTLOOK The economic outlook for Latin America shows a relatively positive picture for the coming years, there is anyway some uncertainty linked to the actual slowdown in Europe and the United States, both important trading partners. However, in some commodity-exporting countries such as Chile and Brazil, where economic growth is forecasted to reach 5.1% and 2.4%, respectively, in 2012 some signals of overheating with inflationary pressures have already started to accrue and are becoming increasingly worrisome in the region. In terms of competitiveness, many countries have experienced significant improvements. Mexico, Peru, Bolivia, and Brazil register the largest improvements, while Panama, Ecuador, Argentina, Barbados, and Uruguay have seen more moderate progress. The rest of the countries in the region have either remained stable like Colombia, or have slightly declined. In order to keep the positive momentum going, Latin America will need to address some of the persistent challenges that constrain its competitiveness. While the region is vast and heterogeneous as a whole, four main key challenges that affect each country differently can be highlighted:  Weak institutions with high costs associated and lack of physical security  Poor development of infrastructure  Inefficient allocation of production and human resources; and, increasingly  Lack in innovation vis-à-vis more developed, but also emerging, economies Addressing these challenges in the next decade will be crucial to ensure the economic and social progress of the following countries that lead the region: i. Mexico has one of the highest improvements in the region. The country’s efforts to boost competition and its regulatory improvements that facilitate entrepreneurial dynamism are contributing to an improvement of the business environment. This development, coupled with the country’s traditional competitive strengths such as its large internal market size, fairly good transport© April 2012 P age |3
  • LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - infrastructure, macroeconomic policies, and strong levels of technological adoption have led Mexico to improve its competitive edge. However, the country still suffers from organized crime; security concerns. Adopting and implementing policies to boost ICT, energy, and retailing, along with additional reforms to render the labour market more efficient are still needed to increase the efficiency of the Mexican economy. The current overall poor quality of the educational system, insufficient company spending in R&D, and limited innovation capacity can jeopardize the future ability of the country to compete internationally in higher value-added sectors. ii. Panama, has remained relatively stable in most competitiveness drivers. Overall, it benefits from important strengths in its efficient financial market, solid transport infrastructures, and very good technological adoption, especially through FDI. Except these advantages, the country still faces important weaknesses in terms of education. Panama also struggles with rigidities in its labour market, low levels of public trust of politicians, insufficient judicial independence, and favouritism in the decisions of government officials a situation that has deteriorated in the past years. iii. Venezuela continues to fall because of quality of the country’s public institutions. This dismal showing, coupled with severe weaknesses in its markets efficiency and deterioration in the macroeconomic stability have led the country to feature at the bottom of the region and among the least competitive countries in the world. Despite being at the forefront in its tertiary education enrolment rate, the overall quality of the educational system is weak. This, added to a lack of sophisticated businesses and poor innovation potential, critically constrain the competitiveness performance of the country.© April 2012 P age |4
  • LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - iv. Costa Rica, is suffering of the macroeconomic imbalances seen in its high budget deficit and inflation and a scarcity of financial resources for the private sector. With fairly nice forecasts of around 4.5% GDP growth rates for the coming years, the country still depicts a strong overall position in the region thanks to its friendly trade policies, with low tariffs, few constraints on FDI, and its strong educational system. Costa Rica presents strong levels of technological adoption with many companies in high-tech industries, as well as solid business sophistication and innovation. All these factors can generate significant benefits. v. Colombia experiences an improvement based on its competitive strengths clustered around a stable macroeconomic environment; an improving educational system with a high level of enrolment and a large domestic market. On the other hand, despite the sustained efforts of the government to improve social pacification and eradicate organized crime, security concerns remain very high on the list of factors dragging down its competitive potential. In addition, improved regulation to foster domestic competition and facilitate a more efficient allocation of resources, as well as further investments to improve the transport infrastructure, are needed. vi. Peru improved its macroeconomic stability and strengthened its competitive edge thanks to a better control of inflation, a reduction of the government deficit, coupled with a friendlier environment for entrepreneurship. The country still faces a number of important challenges to solve as a weak public institutional environment, an educational system in need of higher quality, and the very low level of innovation. The impressive economic outlook for the next years, with GDP growth rates forecast of 6% in 2012 thanks to high mineral prices, provides a good opportunity to undertake the necessary investments and reforms to address its pending competitive limitations.© April 2012 P age |5
  • LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - vii. Chile: remains the most competitive economy in the region. Early measures to open and liberalize its markets by introducing high levels of domestic and foreign competition, a relatively flexible labour market, and one of the most sophisticated and efficient financial markets have also helped the country to maintain its long- term growth prospects in the past decades. As Chile moves quickly toward higher levels of rent and the next stage of development, companies with low investment in R&D and a weak capacity for innovation act in an innovation environment characterized by relatively low-quality scientific research institutions and weak university-industry collaboration in R&D. Making sufficient progress on this front is the major challenge that Chile will face in the next decade. viii. Brazil benefits from several competitive strengths, including one of the world’s largest internal markets and a sophisticated business environment. Moreover, the country has one of the most efficient financial markets and one of the highest rates of technological adoption and innovation in the region. On a less positive note, Brazil still suffers from weaknesses that hinder its capacity to fulfil its tremendous competitive potential. The lagging qualities of its overall infrastructure despite its Growth Acceleration Programme (PAC), its macroeconomic imbalances, the poor overall quality of its educational system, the rigidities in its labour market, and insufficient progress to boost competition are areas of increasing concern. ix. Uruguay leverages its traditional competitiveness strengths thanks to its transparent and well-functioning public institutions, its high rates of education enrolment and its stable policies that encourage FDI. However, despite this progress, inflationary pressures and the reduction of the national savings could bring significant macroeconomic distress if not properly tackled. Moreover, as Uruguay keeps growing and moves steadily toward a higher stage of© April 2012 P age |6
  • LATIN AMERICA STRATEGIC P.E.S.T ANALYSIS - 2012 - development, policies to increase domestic competition that would incentivize higher business-sector investment in R&D and innovation capacity will become increasingly important. x. Argentina is getting more and more unstable. The extraordinary competitive potential of the country that benefits from a large domestic market size and a population that has a high level of education remains unfulfilled because of both a lack of trust in its institutions and the large inefficiencies in its allocation of goods, as well as labour and financial resources. Excessive red tape that benefits the expansion of the informal economy and high barriers to trade bring a lack of confidence in the financial system. The progressive deterioration of the country’s macroeconomic stability and a two-digit inflation rate, casts additional worrisome uncertainties about the sustainability of its economic growth. Unless these weaknesses are addressed, this situation could lead the economy back into the erratic fluctuations of the past, characterized by high expansionary periods followed by deep recessions. ________________________________ Leave your questions and comments to: herve@delhumeau.com© April 2012 P age |7