Latin America Region
Political Uncertainty Governs Major Regions
Changes in regional government are playing a significant role in the fortunes of Latin America for 2019.
Brazil and Mexico started the year in the hands of new populist presidents who commited to revoke decades of consensus policies, aiming to reactivate growth and generate more trust from investors. Argentina faces its elections in 2019 in a recessionary environment.
Colombia, in contrast, is enjoying the sunshine with political stability and continued GDP growth.
In Mexico, the stock traders want to see if president Andrés Manuel López Obrador will turn his campaign promises into a political reality. So far, his decision to resort to referendums to decide on investment projects has led to a depreciation of the peso.
In Brazil, Jair Bolsonaro winked at the markets by choosing Paulo Guedes as his economic advisor, a move which launched the Bovespa Index to historic highs.
Stocks and currencies of the region are heading towards their worst year since 2015, adding to a massive collapse in the emerging markets due to concerns over world trade perspectives and economic slowdown.
Although the increase in commercial tension threatens to generate a greater volatility among risk assets, a projected weakening of the dollar and a pause in the adjustment cycle of the Federal Reserve could be a balm for local markets. The wildcard for 2019 remains the ability of regional leaders to move forward with measures to stimulate growth.
After the biggest recession in its history, Brazil, the largest market in the region, has had a special dynamism, and prospects are quite favorable for the next year. This is mainly due to a government with a liberal economic agenda which announced the privatization of state companies and a reduction of the fiscal deficit.
With the appointment of Paulo Guedes (PHD from the University of Chicago) as the Minister of Economy, the first month of government has been marked by an increase in activity of the stock exchange.
Havik, the Cornerstone office in Brazil, was affected by the recession but is now back to reinforcing C-Suites and high-level positions.
Once the economy is restored, Brazil should become an important hub within Latin America as the headquarters of international companies. To date, the most dynamic sector has been construction.
Peru shows a solid economy, mainly due to the stability of its regulatory framework. Heavy investments in infrastructure and construction have built positive expectations for the economy in 2019.
Chile has shown better growth figures, as a result of a raise in the price of copper, but it will depend a lot on the outcome of the U.S.-China trade war. We continue to attract foreign talent (Spanish, Latin American).
The business model for Boards of Directors has generated a lot of requests from women, and that is a trend throughout the region. In Santiago, we are leading a public-private agenda with other agencies and members of our industry to increase the number of women on boards and in executive positions. This initiative was convened by the Government of Chile through the Ministry of Women and Gender Equity.
Also, as an industry, we are participating in the Gender Parity Index (GPI), initiative that brings together the civil society with the public and private world. Our aim is to increase gender parity in companies by means of Ten Commandments of Good Practices, developed in collaboration with other search firms, companies, foundations and the Government.
Colombia is considered an emerging economy in Latin America. In the past years we have had political stability, a substantial decrease in violence, a healthy commercial balance and a market open to new opportunities, services and products. GDP growth accelerated from 1.8% in 2017 to 2.6% in 2018 and is projected at 3.3% in 2019.
Colombia represents significant opportunities for our Cornerstone International Group member there. New companies are opening up, others are increasing their investment in the country and local players are preparing to compete at the international level.
Industries such as Retail, Mining, Construction and Telecommunications have become more demanding in their search for top talent, seeking professionals able to deal with a changing and evolving market, as well as to develop, motivate and consolidate high performing teams.
