In working, living and traveling in Latin America over the past 20 years, I have observed five basic business myths often touted by Americans regarding Latin America. These points deserve some discussion.
Myth 1: Latin America is an economic backwater and does not represent a viable market for American traders.
Latin America recorded 1.52 trillion dollars of GDP in 2002. While small compared to the US GDP, I have seen both importers and exporters succeed when pursuing business ventures with the region. The trick is to find your niche. Do Latin Americans want what you are selling? Remember that people from this region have the same appetites for new consumer goods that we do, only they are not prepared to pay two or three times what they cost us here to acquire. We must strive to match our costs with individual country tariff structures and transportation costs to deliver goods at reasonable prices to the consumer. If you are importing from Latin America as I do with my company, Southern Wine Group, make sure you have a product that is not widely available already in the United States. Having wines that compete favorably both in terms of price and quality with other wines in the US market has made my business a success.
Myth 2: Latin Americans are corrupt and cannot be trusted in managerial positions.
We have proved finally inside the United States that a few unscrupulous companies can change our reputation for being honorable in our business practices. My clients inside Argentina have gone from saying “We wish we were more like the United States” with regards to business practices to saying, “See, the United States does the same things it accuses us of doing.” Just as companies like Enron, Tyco, and Arthur Andersen may not represent our individual business ethics, Latin America’s mixed history of business and governmental abuses do not speak for all business people of that region. Anyone who truly looks, will find honest and capable people to work with in Latin America.
Myth 3: Latin Americans come from inferior schools and therefore do not have the skills necessary to work with companies from the United States.
As the United States faces the challenge of keeping our schools competitive within a tightened budgetary climate, Latin American countries are showing that they can produce intelligent, well-trained professionals capable of competing with their U.S. counterparts and capable of working with America’s best companies. Just as some U.S. high-tech companies are showing a new preference for Indians trained in the prestigious technical universities of that country, countries such as Brazil, Mexico, Argentina and Chile are producing graduates who are very competitive with our best and brightest as well.
Myth 4: Latin American governments are unpredictable. One is ill advised to own property or other assets in Latin America.
Latin America is becoming more democratic. As it does so, traditions for orderly transfers of power, rule of law, and the protection of property rights are becoming more entrenched. It is important to understand the local specific laws concerning the property you wish to acquire. It is equally important to work with contracts written by local attorneys. However, with due diligence and careful decision-making, one may feel reasonably protected these days when purchasing an asset in Latin America.
Myth 5: Latin Americans are limited by old world traditions that prevent them from being as entrepreneurial as their U.S. counterparts.
One needn’t travel far inside the region to realize that entrepreneurship is not a characteristic unique to the United States. It is unique to human beings. Where there is a general frustration with the status quo and the legal structure to permit independent businesses you will see entrepreneurship thrive. The United States’ economic boom of the 90’s helped to pique the interests of people around the world towards independent and creative economic activity. Latin America has been no exception.
In conclusion, in this modern era of global business, be prepared to encounter Latin Americans with professional skills, education, ethics, and entrepreneurial drive comparable to the most skilled and successful business people of this country.
Kirk Ermisch is a new business professor at COCC. He founded the first American winery in Argentina and brings a wealth of experience in international trade. Information: email@example.com.