Top risks for doing business in Latin America

We are all in agreement with the results of the just released Regional Risk for Doing Business Report 2018 of the World Economic Forum in partnership with Zurich. It is clear to all of us that the main risks identified by respondents are an essential part of the general context or environment in which we do business in the region.

However, what's the main risk? In my view, it is the lack of understanding that volatility is part of the environment of this region. Lack of understanding that the region is diverse; each country has its own particularity. The lack of understanding that we need to have a long term view. And how to address this? How to invest in such a context and expect a reasonable return on equity on a reasonable time frame? We do not have all the answers but our experience in the last three-and-a-half years allows us to share some elements that might be of interest and of use for others to follow:

1. Having the right set of local leadership skills, talent and capabilities, with the right mindset and attitude, is key. You cannot simply plug and play Global ways of doing things. Global needs to understand Local and to do that it needs to have the right people in place. And empower them.
2. Understanding that investments need to be looked at with a long term view. Be patient. Build the right set of capabilities first and then invest gradually in growth initiatives, either organically or inorganically, depending on the speed defined.
3. Combining global expertise, knowledge and structure with local know-how, in particular on volatility management. Global and Local need to work together in a collaborative, professional and respectful way.

At Zurich, we have been doing business and servicing customers and distributors in the region for more than 50 years. We know how to manage volatility and uncertainty. We have the right set of capabilities and attitude. With an aligned set of values and professional standards.

The different markets are still developing and are in different stages of maturity. The Rule of Law governs the majority of the countries and although institutions in general are still weaker, there has been a good amount of progress in the last couple of years in terms of maturity and development of society. People (citizens) feel empowered and have come to a much deeper understanding of their role in pushing cultural and transformational change. Brazil and Argentina are examples of this, where the recent cases of corruption are being finally brought to trial and the Judiciary is playing an acting part in bringing all people involved (from politicians to businessmen) to justice.

I believe that the region shows the sufficient level of macro-economic and social framework to continue attracting investments with a long term view. It is indeed a potential growth engine for global companies like ours for several reasons. We are very happy and excited with our operations in the region and the progress of our businesses there, especially with the future potential of our recent acquisitions in several markets. We are confident that the region shows the conditions to support continue investing in capability building and growth initiatives.