Latin America has been a region that has been presenting an upturn for several years. The various economic agreements that have been made with different countries, the incursion into new production sectors, and its geographical location, among others, have allowed it to become a region of interest for companies from all over the world to make significant investments.
According to the annual Doing Business indicator, an exercise of The World Bank that measures how national regulations favour or restrict business activity and the practice of property rights, Latin America obtained a score of 59.1 in 2021. Representing a growth compared to the 58.8 rating of 2020, in 2021, Chile (72.6), Mexico (72.4) and Colombia (70.1) occupy the first three places, followed by Peru (68.7), Uruguay (61.5), Brazil (59.1), Paraguay (59.1) and Ecuador (57.7).
However, the COVID-19 pandemic, the economic crisis and the recession, and various regulatory actions have drawn a new panorama that must be taken into account by its inhabitants to become stronger. The region's countries are working hard to overcome the pandemic and implement new models of economic recovery.
Sustainability
The transition to a green economy will steal Latin America's limelight in the coming years. This transformation represents an opportunity for development with equity and the generation of new green jobs in Latin America.
Aligned with the United Nations Global Compact and the Sustainable Development Goals (SDG), set for 2030, Latin American countries and their business sector have been accelerating their transition toward a green and sustainable economy, focused on protecting the environment and communities that comprise it.
Studies by the Global Commission on the Economy and Climate indicate that bold and effective climate action could generate at least USD 26 trillion in accumulative economic benefits by 2030. Data from the Inter-American Development Bank (IDB) and the International Labor Organization (ILO) show that, by this date, the decarbonization of the economy can generate 15 million net jobs and drive economic growth of more than 1% per year.
Undoubtedly, this vision brings fundamental challenges to the business sector associated with transforming its processes. The measures may imply substantial changes in their business strategies. Still, they become opportunities for developing new technologies that contribute to the continuity and sustainability of companies, an Essential point for access to green bonds. These bonds are destined to finance or refinance green projects, that is, investment in sustainable and socially responsible assets in areas as diverse as renewable energy, energy efficiency, clean transport or accountable waste management. The IDB expects Latin America and the Caribbean to quadruple their share of the global green bond market by 2024, from 2% to 8%.
Latin America is a region with significant sources of oil, and the polluting emissions from its extraction have decreased due to the transition to more environmentally friendly solutions, as is the case of the production and application of electric motors. In Latin America, the sale of battery electric vehicles (BEV) has increased in recent years. Colombia is one of the region's leaders in this type of vehicle registration, with almost 1,300 units in 2021, demonstrating the transformation towards innovative models.
Digital Transformation
According to a report by the EY firm, 57% of companies in Latin America have increased their investments in digital transformation. The industries that did it the most are fishing, health, manufacturing, logistics and transportation, education, consumption and retail, banking and insurance and automotive.
These technological advances indirectly push the region's growth in several sectors. For example, technologies such as Artificial Intelligence have boosted governance frameworks. Policies based on ethical principles have been implemented to adopt data governance frameworks and algorithms supported by regulatory frameworks. It has also impulsed a new workforce creation to add value to the region's labour force and contribute to economic and social development.
Parallel with this, the Blockchain revolution in Latin America has already reached 77.1 million dollars of investment in Blockchain technology during 2020, and sustained growth of 45% is projected until 2023. Fascinating figures, especially for entrepreneurs who have been eager to develop payments through the Blockchain (systems that are cheaper to use and offer a refuge from the instability of some regional currencies).
Job security
According to the global recruitment agency Deel, the regions with the most contract workers receiving payments in cryptocurrencies include Latin America (LATAM). Which accounts for 67% of all cryptocurrency wage withdrawals globally, followed by Europe, Middle East and Africa (EMEA) with 24%. North America 7% and Asia-Pacific 2%
Thanks to these tools coordination, Latin America tops the list of regions that hire contract workers with 161 per cent; in contrast, Asia Pacific ranks second with 159 per cent, according to a study entitled "Report on the State of the global contracting 2022", carried out by Deel.
In Latin America, the national growth in the region's economies is evidence. It is estimated in 2022 an economic growth for Panama (6.3%), the Dominican Republic (5.3%), Venezuela (5%), Colombia (4.8%), Guatemala (4.2%), Honduras (4.1%), Uruguay (3.9%), Costa Rica (3.7%) and Bolivia (3.5%), an opportunity for entrepreneurs and investors interested in the impulse and future projection.