LATAM: Foreign Investors Survey 2017 agriculture( Bolivia and Cuba); Food( Bolivia) electricity and automotive( Mexico); Telecommunications( Bolivia, Dominican Republic, Honduras, Nicaragua); Technology( Chile); Energy( Bolivia); Renewable energies( Central America); Trade and manufacturing( Guatemala); Insurance( Bolivia); Acquisition of companies with local operation( El Salvador).
Some political risks contained...
Respondents transmit messages of tranquility regarding the political stability of the Region, although zero risk does not exist. The exception is Venezuela and, as for Cuba,“ in the current situation, political risks tend to be significantly reduced,” says Juan José Cigarrán Magán, Partner of Cigarrán & Asociados.
Countries where there is no political risk at the moment, according to the respondents, are Chile, Colombia, Costa Rica, Honduras, Panama, Paraguay, Dominican Republic and Uruguay.
In the case of Chile, Daniela Pardo, Associate, and Marco Salgado, Partner of Bahamondez, Álvarez and Zegers, explain that“ although in Chile there are large processes of legislative reform in several aspects( especially taxation, which can directly affect foreign investment), Chile presents itself as a country with a political consensus on macroeconomic policies and on foreign investment in particular... which is protected and encouraged institutionally.”
In Costa Rica, instead of political risk, one can speak of political inactivity given the current conjuncture. At the moment, there is no political risk in Honduras, which is under a right-wing government from 2014 to 2018. However, it is now possible to re-elect the same president several times and it still has not been decided how many times.
In Panama, José Agustín Preciado, Partner of Fabrega, Molino, Mulino, mentions that there exists a“ stable democracy in which there is a balanced economic activity” and“ where the State proposes programs of investments and public management that favor the intervention of foreign investors in favor of the country’ s growth.”
The Dominican Republic also has no risks since, as Juan Alcalde, Partner of OMG, explains that, after the elections in May 2016, President Danilo Medina of the Dominican Liberation Party renewed his mandate for another four years, while the ruling party consolidated its already large majority in the Chamber of Deputies and the Senate.
As for Uruguay, Santiago Fontana, Partner of Ferrere, explains that there is“ definitely no” risk. It is a country that“ has always maintained a solid democracy and a respect for the institutions. Even in the toughest economic phase since the return to democracy in 2002, all parties came together to find a joint solution and supported the then-president, Jorge Batlle. All Presidents since 1985 have been actors with a long tradition within the system of political parties, one of the oldest systems in the world, with two traditional parties that have 180 years of life.”
In the list of countries with mitigated political risks, Peru enjoys this situation of political calm since the election of President Pedro Pablo Kuczynski in 2016. According to Alexandra Valdivia, Partner of Flores Nano & Soto,“ at the corporate level, given the well-known trajectory of the current president and the technical group that accompanies him, I think there is also a sense of tranquility in the social, economic and political areas.”
“ In Peru, at the corporate level, given the well-known history of the current president and the technical group that accompanies him, I believe there is also a sense of tranquility in the social, economic and political areas.”
ALEXANDRA VALDIVIA, PARTNER FLORES NANO & SOTO
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