Francisco Bracamonte
Tax Partner, Kreston BSG, Mexico
Francisco’s academic background spans degrees in Law and Public Accounting and two master’s degrees in Business and Tax Law. He participated in the High Business Management Program at IESDE Business School. An expert in legal and tax matters, with special attention to international taxation. He advises national and multinational companies with extensive experience in wealth, succession consulting, and business restructuring operations. He has been a professor of tax matters for over 20 years. He is an active member of the College of Public Accountants of the State of Puebla, the International Fiscal Association, and the tax commission of Coparmex. He regularly contributes to various national publications specialising in tax matters, regularly participates in specialised radio programs, and has taken part in international congresses on tax issues. In 2003, he was certified through examination by the Mexican Institute of Public Accountants, A.C. (IMCP), with recognition for obtaining the highest score nationwide. He is currently a member of the board of directors of Kreston Global and the Regional Director of Kreston Latin America.
Latin America’s elections in 2024: An overview
March 6, 2024
The outcomes of Latin America’s elections in 2024 will have implications for the business environment in each country, influenced by the anticipated policy directions and governance styles of the leading candidates or incumbent parties. This year, six countries in Latin America will change presidents: Mexico, Panama, Uruguay, Venezuela, the Dominican Republic, and El Salvador. Francisco Bracamonte, Tax Partner at Kreston BSG, Mexico, shares his thoughts on the changes to expect.
Latin America’s elections in 2024: El Salvador
The only election that has taken place so far is in El Salvador, where despite the constitution prohibiting reelection, the current president Nayib Bukele was reelected. This country has had some success in reducing criminality but with serious questions regarding respect for human rights.
Latin America’s elections in 2024: Mexico
The rest of the countries will have elections during the remainder of the year. Mexico, the most populated country among them, will hold elections. The competition is between the candidate of the governing party (left-populist) and the candidate of the opposition alliance (centre-right).
Although it is expected that Mexico will benefit from the nearshoring process, receiving additional investments relocated from China, the depth and speed of these investments will depend on the election results. The business climate in Mexico will be tied to the election outcome because both options have different focuses in important areas. For example, the governing party aims to limit private investment in energy, particularly green energy, while the opposition proposes continuing the policy of an open and competitive energy market.
Anti-incumbent wave
In general, elections in Latin America will share some characteristics:
a) disillusionment with democracy, particularly with traditional parties.
b) the rise of populist candidates offering easy but inefficient solutions.
c) weakening of the rule of law, ranging from Venezuela, which will not have free elections, to hybrids like Mexico and El Salvador, which have relatively free elections but with many questionable practices.
d) increased polarization and lack of open dialogue between different political groups; e) illegal money and corruption.
Latin America business opportunities
Despite these challenges, Latin America will present investment opportunities for multinational companies:
a) Low labour costs with a medium level of education and every day more people speaking English.
b) Except for Venezuela, most countries recognise the necessity of private investment for development and poverty reduction.
c) Minimal differences in language and culture among countries, allowing Latin America to be considered as one region for investment purposes.
d) A tendency toward low inflation and interest rates, which will accelerate GDP growth in the coming years; e) significant mineral resources and key raw materials.
There are not expected to be significant changes in the investment climate that multinational companies need to consider. Mexico will continue to be a natural destination for certain investments, particularly in automotive and other industries strongly tied to US production chains. Similarly, other countries will serve as natural markets for specific industries, such as semiconductors, software programming, mining, agriculture, etc.
Political stability
Overall, significant political instability is not predicted, except for Venezuela, which has not received foreign investment for some years now. There are forecasts of social mobilizations following the inequitable elections and possibly more international sanctions.
In conclusion, Latin America is not expected to undergo major changes in the business environment, except in the event that the opposition takes power in Mexico and implements changes to energy and mining policies, which could open the door to new private investments.
If you would like to speak to one of our experts on investing in Latin America, please get in touch.
