What are some of the risks of doing business in Latin America? There are the bigger, global issues such as cybersecurity/data fraud and terrorist attacks. Then there are the more local Latin American problems, such as political and economic structural risks. What are the key risks in Latin America? The top risk is failure of national governance, followed by unemployment issues, fiscal crises, profound social instability and energy price shock.
Corruption
Latin American countries are infamous for having a lot of corruption in politics and in business. Some countries, like Brazil, Mexico and Venezuela, are known worldwide for corruption in these sectors. Every time a leader in a country changes, expect new/different policies and regulations affecting local and foreign investment– and leaders change often!
High Unemployment Numbers
Another problem with Latin American countries is high unemployment. Either people aren’t working or they’re getting paid “under the table.” Many countries also deal with debt crises and bad/unstable fiscal policies which negatively affect people.
Social Instability
Social instability is also a problem. There are some haves and a lot of have-nots. It’s harder to be successful in Latin America when it seems like certain people get all the perks and the rest get the shaft. Poverty and inequality can lead to disruption.
Energy Price Shocks
Then there’s energy price shock, which basically means you might be shocked at how high energy prices are in certain Latin American countries– perhaps too costly for you to make a profit there.
Using a Latin American Risk Assessor
All areas of the world have their risks for doing business– even the brightest and best ones have some issues. That said, if you want to do business in Latin America and need some guidance, including professional risk assessment, don’t hesitate to contact SMG Consulting Services of Pembroke Pines, Florida. You can also email info@smgconsultingservices.com.
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