Latin American Economic Forecast and Relations with Spain: Challenges and Opportunities

Predicting the evolution of any economy is a risky task, because economic mechanisms respond not only to present realities, but also to future expectations, which may or may not materialize. Therefore, forecasting the behavior, not of just any economy, but specifically of the Latin American economy, is risky because the initial assumptions are complex and multiple, as well as their movements and effects. However, we can start by saying that the Latin American economy remains on a path of low growth and has not yet taken off or soared. This situation is not unrelated to the context of the global economy. To promote prosperity, it is necessary to take into account crucial factors that make it possible, such as public policies, innovative capacity, productivity, intraregional and extraregional trade, which represent the challenges that almost all economies will have to face, albeit to varying degrees and at different times. Latin America must enter the path to prosperity and compete successfully in demanding international markets by adopting coherent and integrated strategies. Furthermore, it must confront major economic and technological transformations, where the terms sustainable and inclusive become significantly important. All this, amidst climate change and the transition to clean energies that will intensify the demand for natural resources, of which the region possesses a quarter of the tropical forests, a third of the freshwater, and half of the planet's biodiversity. The reading that Latin America must make is that it inevitably has to leverage its advantageous geographical position and vast natural resources to make a qualitative leap towards processes framed in a culture of permanent innovation, supported by policies for systemic competitiveness that enhance the framework of an innovative, competitive, and sustainable growth model. Multilatinas, from a broad and diverse perspective, must continue their international expansion by leveraging all advantages, such as those offered by Spain as the "most natural market", given the historical, linguistic, and cultural ties, supported by a significant network of economic, commercial, and financial relationships, largely woven by Spanish companies present in Latin American markets (The Multilatinas. The new Ibero-American multinationals, CEAPI). Multilatinas will feel very comfortable in Spain, as it is home to important Ibero-American organizations, forming part of Spain's commitment to establish itself as a business and investment hub, with truly positive and competitive differentiating positions that facilitate access to markets in Europe, North Africa, and the Middle East. To enhance bilateral links and relationships, Spain must assume its role as an "articulating" country and the most effective bridge to develop commercial networks that increase exports, promote investments, and enhance scientific and technological capacities within an agenda of important global issues such as migrations, supply chains, technological gaps, energy transition, and climate change. This bidirectional path of "coming and going", that is, moving in both directions, makes a lot of sense. It is evident that Spanish companies have already done so towards Latin America, and continue to do so. Now it is up to the multilatinas to undertake expansion towards Spain, which is widely perceived with an increasingly intense arrival, led primarily by Mexican companies followed by Argentine, Brazilian, and Colombian companies. In 2023, Latin America positioned itself as the fourth largest investor in Spain with a stock of $47.743 billion, and considering investments in Foreign Securities Holding Entities (ETVE), the volume would amount to €66.883 billion, representing 11% of the total investment received by Spain. This significant investment volume is distributed among twenty countries that form a thriving business community comprising more than 600 companies and 47,000 direct jobs (VI Global Latam Report 2024). It seems that multilatinas, in future perspectives, will have to face challenges and opportunities that will undoubtedly test their organization, where market evolution, along with management quality, good corporate governance, innovation models, combined with talent in terms of promotion and retention, represent key factors to assess their capabilities, both to address challenges and to seize opportunities. Multilatinas, without a doubt, represent one of the most relevant topics in Latin America. Consequently, they must compete successfully in the global economy, but also achieve a "soft power", that is, a persuasive weight in international relations, which generally uses economic and cultural influence for the benefit of countries and therefore the region as a whole, which has just launched its "global brand", an initiative led by CAF-Development Bank for Latin America and the Caribbean. Overcoming challenges and seizing opportunities to create more favorable conditions that benefit and drive sustainable and inclusive growth in Latin America is the most effective contribution of multilatinas and their leaders. Companies and leaders that face risks, but at the same time, must capture the opportunities offered by Ibero-America in the new multipolar world. As can be inferred, the task at hand is not only challenging due to the anticipated outcomes, but also because of the high strategic value of the region that must inevitably be capitalized on.