THE EYES of the world are turning to Brazil as “the beautiful game” returns to its spiritual home next month. This is an exciting time for all the teams involved ahead of the World Cup, but also one filled with major challenges and opportunities – a situation not dissimilar to that facing Latin America as a whole.
I cannot claim to be a football expert, but I do know from personal experience – having worked extensively in the region – that Latin America has come a long way in recent years. Brazil, for example, has lifted 35m people out of poverty over the last decade, while unemployment in Uruguay has dropped to 6 per cent – approaching full employment.
This progress was evident during a recent business visit. Nevertheless, Latin America, like the UK, cannot afford to stand still if it is to maintain and improve its competitive position. Policymakers across the region must work hard to introduce the structural reforms needed to increase growth, tackle inflation, boost productivity, and meet rising social expectations.
Of course, the UK and Latin America have historically had a close relationship. But for too long we took our eyes off the ball, allowing other countries – such as the US and Germany – to steal a march across the region. This has slowly started to change but we still have a long way to go.
There are immense opportunities for British exporters across a range of sectors, including: infrastructure, energy, education, listings, legal services and insurance. Some markets such as Brazil are more complex than others, but there will be a growing demand for basic financial services products as the middle classes grow. For example, over half of all cars in Brazil are uninsured, while a similarly high proportion of Mexico’s economy is informal – effectively operating outside the tax system. Meanwhile, as Latin American firms internationalise, they will need access to the innovative long-term financing that the City can offer.
Infrastructure is another area where the UK can share global best practice across the range of services required throughout a project’s lifecycle. British expertise in delivering bespoke solutions through PPP or other financing models can help support ambitious investment plans across the region in transport, energy, housing and healthcare.
As an energy lawyer, I know that keeping the lights on in the face of fast growing urban populations is one of the greatest global challenges. The Mexican government’s energy reforms, for example, confront this challenge head on, by attempting to stimulate job creation and growth by attracting private sector investment into the industry and boosting production. Uruguay and Brazil are also seeking to increase renewable energy output in order improve the security and sustainability of supply by diversifying the overall mix. UK firms, including SMEs, can successfully compete in this market.
Only one team can win the World Cup this year, and on current form Brazil, Mexico and even Uruguay probably have better chances of lifting the trophy than England. We may be rivals on the pitch, but off it we can deliver mutual economic successes together through closer partnership.
Fiona Woolf is lord mayor of London.