Political Risk Advisory Briefing: Latin America May 2020

Our Latest Political Risk Advisory Briefing from KCS Group Europe focuses on Latin America.

Although the trigger in each country is different, the mixture of stagnating living standards, elevated levels of unemployment, weak institutions and ongoing corruption which are common to many countries in the region, certainly provide fertile ground for further social unrest and political instability during 2020. These provide challenges for the business environment, which must cope with widespread social, economic and political problems while attempting to remain ‘above the fray’ and to cope with what can be rapid changes in government, the economy and security.

If there is an overarching theme of the current Latin American malaise, it is that a single issue can very quickly act as a springboard: the miniscule Chilean rise in fares that saw protests explode, or the Peruvian anti-corruption efforts that led to mass demonstrations over industrial and economic inequality. Businesses should therefore be prepared and take a widescreen view of cultural affairs: what can seem at first to be restricted to one ‘avenue’ can soon spiral to encompass an entire country, and nothing can be ignored. Given the gradual reduction in international interest in the assorted Latin American problems over the past months, it is to be hoped that the international business community, which relies upon Latin America just as much as it is itself relied upon, will play a major role in ensuring that all matters are resolved peacefully and equitably. Anything less, and a series of already difficult markets risk becoming too dangerous.

Based on selected Grey Area Dynamics:

Venezuela has a High risk rating of 5
Bolivia has a Very Possible risk rating of 4
Chile has a Possible risk rating of 3
Peru has a Possible risk rating of 3

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