Latin America & the Caribbean
I am making another tour for business through the region and the general positive attitude expressed and manifested by the locals in each of the countries is wonderfully contagious. Just like the lyrics from the year 2000 song by Chic announced, “Good times… Our new state of mind, these are the good times” Latin American residents from the Tierra del Fuego to the Rio Grande are enjoying a new found confidence for their future. Unlike one first tier country that has been promised hope for the last 24 months, south and much further south of the U.S. border the fruits of pragmatic macro-economic policies and investment practices are being harvested. The average per capita incomes are rising region wide and businesses both small and large are growing. More >
In a rather timely coincidence, during a recent business trip to Bogotá, Newsweek published an interesting and wholly deserved article about Colombia’s growing economic importance and stability. If Newsweek, that repository for Middle America’s news, finds it relevant to discuss this, perhaps finally the veil is being lifted off of the public’s best kept secret – Colombia’s promise as a healthy democratic and economic state. Unlike Brazil that was known as the country with the perennial “economy of the future,” Colombia has been perceived as the country caught in a never-ending hell… not even of its own making. Part of the problem is that too many people continue to associate it with the Colombia of the 80s and 90s, fraught with drug lords and the inherent violence. In addition, this is compounded by the murderous presence of the FARC in the country since the 1950s. More >
One of the areas of development that still lags behind in Latin America is that of Infrastructure. Certainly in all other asset classes there has been tremendous, and in some cases, explosive growth. Unfortunately, the region’s countries have not worked hard enough for infrastructure to keep pace with the office, residential and industrial development demands. The only exception is in the tourism sector that caters to foreigners where they have experienced, until 2009, strong hospitality growth; there, infrastructure is generally proactively planned and implemented. Unfortunately, governments tend to place a higher importance on the comfort of non-native tourists, and the resulting generation of income, than they do on supplying adequate services to their own citizens and taxpaying constituents. One glaring example we can consider is Brazil. If it were not for the fact that it is host to the future Olympic Games and the World Cup in a few years, a significant number of the announced projects would not be occurring. Unfortunately, the other countries in the region do not have the benefit of such useful and motivating impetus. Nor do they seem to have the sufficient foresight and or will to pressure their political systems/populace into such a time consuming and capital investment intensive process… all, perhaps, excluding Panama. Panama is the country that gets it. More >
Now at a little over Mid-Year in the 10th year of the 21st Century, perhaps a little reflection and report on how the region is doing would be appropriate. Overall the majority of the countries in Latin America are recovering well from the Financial Crisis that smacked down the US and European economies. Most are enjoying projected and actual year-on-year growth rates of at least 3.5% to as high as 7.6%. The growth rate for the region as projected by the UN Economic Commission was recently increased to 5.2% from the 4.3% estimated early in 2010. More >
During the 1990s and into the early 2000s retail store expansion across the United States was very aggressive. From Power Centers to Lifestyle Centers, there were sites for everyone. By 2003-2004, many of the larger, more established retailers realized the U.S. marketplace was becoming saturated for new store growth.
While consumer confidence and spending came to a crashing halt in 2007, so too did the rate of retail store expansion in the U.S. Middle Market America retreated from the retail marketplace, spending far few dollars. With the market slow to rebound, retailers that were once reluctant to expand outside of the U.S. are now exploring uncharted markets in search of revenue generating channels to bolster a stagnant/declining U.S. network of stores and customers.
Many retailers chose the natural expansion route south into Mexico, a lucrative market void of an established retail base, or into Canada, a mature much smaller market than Mexico but a market with a significantly higher share of wallet.
International retail expansion is here to stay. Retailers who dipped their toes into the Mexico/Canada markets are now aggressively jumping with both feet into Asia to tap into the rapidly growing markets of China and India, while others are taking the Middle East route (Dubai) as a stepping stone of expansion into Asia.