Latin American countries are still a significant market area for Finnish products and solutions, although the countries are currently being hit hard by the corona Pandemic. Millions of people are living in the area. The market is large and will recover in the coming years. The countries are friendly towards new companies, especially European. Free trade agreements will open up new business opportunities for Finnish companies. The companies should cooperate, to have the opportunity to provide products and solutions for mega-projects.

Brazil is expected to recover from the corona Pandemic faster than other countries in the region.

The corona pandemic has hit Brazil hard. Restrictions vary widely due to the Pandemic situation in different parts of the country. The country has been involved in the development of various vaccines and Brazil is among the first to receive it first.

In Brazil, institutions are strong compared to many neighboring countries. President Jair Bolsonaro continues to enjoy the popularity of the citizens. Due to the corona pandemic, Brazil has embarked on a social plan that includes the country’s lower class will receive around € 100 in monthly support for the duration of the pandemic. The support is significant, as the average salary is EUR 150 per month. We will see what will happen when the support is phased out on 1.1.2021, according to the current plan.

Brazil has embarked on an ambitious reform program in 2019. The aim is to make pension, tax, and administrative reforms, as well as a privatization program, and to open the country to foreign competition. The EU-Mercosur Association Agreement was swiftly completed. We are now monitoring how fast the reforms are progressing, as the corona Pandemic has slowed their implementation.

Brazil’s economy is believed to be growing faster than its less developed neighbors countries. Brazil offers business opportunities in the mining, education, and health, and water and sanitation sectors. Pulp and paper mills are being renovated and investments are being made in digitalization. The 5G auction will be held in 2021, summarizes Ambassador Jouko Leinonen.

Mexico benefits from free trade agreements

Mexico is projected to rise to the world’s top ten economies in 2030. The corona Pandemic will slow its planned entry. The government programs has not been changed despite the Pandemic. The government believes that getting out of the crisis will happen by saving, launching mega-projects (airports, train borders, dry canal, internet network), enhancing employment Dynamics, and eradicating corruption.

Mexico has concluded 14 free trade agreements, which are the pillars of the country’s foreign trade. The Nafta, US, Canada, and Mexico agreement, the USMCA, which aims for freer and fairer trade, which came into force in July 2020. The EU-Mexico trade agreement is being finalized. It is expected to be signed in early 2021. Mexico offers business opportunities in the Mining, bio, education, health, and energy sectors. The treatment and utilization of waste and the demand for defense materials are also business opportunities in Mexico, says Ambassador Päivi Pohjanheimo.

Chile will vote on a new Constitution on 25 October 2020

Chile has been considered the most prosperous and stable country in Latin America. Social unrest began in late 2019. The corona Pandemic has given the unrest a break. 25 of October will be held a referendum on the drafting of a new Constitution, which has different opinions among people. Wealthy people don’t see anything to change in the constitution, while the middle class and the poor hope to have the support of the society. The country’s business-friendly atmosphere is likely to be maintained even of the changes.

Support packages have been agreed on for economic recovery. Their value has risen to $ 29 billion. Money has been given to speeding up investment, SMEs, and those who have lost their jobs.

The Mining industry has developed positively despite the pandemic. The forest industry, in which Finnish companies have a solid place as exporters of machinery and equipment, is a large-scale business. There is also a demand for innovation cooperation. The 5G auction started in August 2020. The digital leap is in progress. Circular economy solutions and digitalization are welcome. Chile is also investing in carbon neutrality. The country provides a wide range of lithium which is needed in the battery industry. Chile has the potential to create green hydrogen with the cheapest solar and wind power in the world. Chile has made 29 free trade agreements. An association agreement between the EU and Chile is in force, which is being reformed, says Ambassador Eija Rotinen.

Argentina, Uruguay and Paraguay – despite the challenges is going forward

In Argentina, President Fernández, who took office in 2019, represents center-left politics. The troubled economy has continued to suffer from the corona pandemic. In August 2020, a debt settlement agreement was signed with private international creditors, which will significantly ease the debt repayment. The agreement provides an opportunity for economic growth, infrastructure development, and macroeconomic rehabilitation. The next step is to reach an agreement to restructure the IMF’s $ 57 billion loan.

The direction of the economy determines what kind of business opportunities open up for Finnish companies in Argentina. Import licensing and currency problems have slowed activity in a number of areas recently. There are business opportunities in agriculture and forestry, mining, and manufacturing, as well as in the bio and circular economy, digitalization, education, and the energy sector. Argentina has the opportunity to develop into an internet hub in the region.

Paraguay is a small and open economy whose economy has remained on a growth trajectory. The bioeconomy and the telecom sector offer business opportunities for Finnish companies. IDB (Inter-American Development Bank) and other international financial institutions support SMEs and promote projects in Paraguay. Particular efforts are being made to digitize.

Uruguay is an institutionally and democratically stable, relatively non-corrupt state where foreign investment is protected. Finns are active in the forestry and bio-economy sectors, incl. wood construction, but also in telecommunications, infrastructure, and education.

One of the most successful training projects is the ongoing co-operation between Häme University of Applied Sciences and a local national secondary education provider to reform vocational training in the forest sector. In July 2019, the Government of Uruguay and UPM signed an investment agreement for a new pulp mill project in Paso de los Toros, Central Uruguay. According to the information received by the embassy, ​​the construction of the new factory and related infrastructure projects are progressing well, despite the corona pandemic, says Ambassador Kirsi Vanamo-Santacruz.

In Peru, digital development plays a significant role

Peru is one of the countries hardest hit by the corona pandemic. The economic situation is slowly improving and economic activity is increasing. Society is very unequal. Nearly 75 percent of the population earns their living in not official work areas. Health care and education systems need major reforms.

State measures to revive the economy have been extensive. Companies have received grants and guarantees. Public infrastructure investment has been opened up to increase employment. The country’s macroeconomic situation remains relatively good, its debt is relatively low and its foreign exchange reserves are large.

Peru crashes or stands on the mining industry. More than 60 percent of foreign exchange earnings come from the mining sector. Copper reserves are very large. The country also produces silver, gold, lead, molybdenum and tin. There is $ 57 billion worth of new mining projects. The exports of agricultural products are growing strongly. Fishing is also still an important sector.

Politics has been broken in recent years. Elections will be held in Peru in April 2021. Hopefully, through them, a common vision will be found on how to meet future challenges. Efforts need to be made to improve public health and education to increase productivity. The goal must be a digital leap, both in public services and in the private sector, especially in the mining industry. Digital solutions and the cybersecurity that supports them offer Finnish companies extensive business opportunities in Peru emphasizes Ambassador Jukka Pietikäinen.

Elections will be held in Bolivia in October 2020 and in Ecuador from early 2021. When the political direction is known in both countries, the political turmoil will subside and attention will shift to the economy. The countries are rich in a variety of natural resources. Finnish companies can find business opportunities in the mining industry, the energy industry, and the Telecom sector.

In the Caribbean, the focus must be on precision products

The Caribbean covers more than 20 countries and autonomous regions where different languages ​​are spoken. The countries of the Eastern Caribbean are the most dependent on tourism. The traveling ambassador Pertti Ikonen manages 15 countries in the region.

Restrictions on entry due to the corona pandemic have been lifted and countries are gradually opening up. Five elections have been held in the region and, as a rule, they have gone well. The USA is the largest exporter in the region. Finland’s exports to the region are smaller than imports.

Digitalization is a cross-cutting issue. They want to switch from oil to other forms of energy. Circular economy solutions are being searched. Meteorology plays a major role in predicting the arrival of hurricanes. Tourism and education are being developed.

In Cuba, private entrepreneurship is currently allowed to a limited extent. Sanctions imposed by the US make trade more difficult because it is a trade embargo. A new idea for tourism is the idea of ​​bringing company workers to Cuba to do telework and guarantee them good wifi connections.

The Dominican Republic has received a $ 100 million bank loan from the World Bank to survive the corona pandemic and help the private sector to recover in order to create new jobs. In addition, the country has received a $ 250 million loan to rehabilitate the health care sector.

New oil discoveries have been made in Guyana. The country’s GDP is expected to grow 50 percent despite the pandemic this year. In Jamaica, the design of the Bamboo Pulp Project is progressing and the Port of Kingston is undergoing renovation. The energy sector offers new business opportunities in Jamaica. Power plants are being built. The World Bank has granted a 100 million bank loan to the health sector. In Suriname, there are opportunities in the gas and oil sectors.

Companies should monitor the World Bank and IDB projects to finance new business opportunities. For example, six small islands in the region have received $ 100 million from the World Bank to develop digitalization, and IDB has various training projects, says Ikonen, the traveling ambassador.

In 2019, Colombia was the first Latin American country to publish a national circular economy strategy

Pandemics, recession, and unemployment, as well as a social movement, pose challenges to decades of stable development.

Colombia has provided a  40 billion euros aid package, which is not just about improving employment or increasing investment. One point in the package is, for example, clean growth. In addition, efforts are being made to reduce poverty. Despite the pandemic, large mega-projects such as infrastructure projects are being pursued. 4 billion euros will be invested in renewable energies in the next few years.

There are business opportunities for Finnish companies, especially in the circular economy, including renewable energy, biofuels, and smart electricity grids, digital solutions extensively, including education and virtual learning, the start-up sector, the defense sector, and in the future the forest sector.

Billions of investments are required in Colombia’s digital leap, and Finnish companies are active in the market, says Ambassador Jarmo Kuuttila.

Panama is investing heavily in growth after the corona pandemic.

Cooperation is important in participating in large projects and identifying business opportunities

Finnish companies operate in, for example, the paper industry, healthcare, mining, the telecom, energy and digital sectors in Latin America. There are already 180 Finnish subsidiaries in the area, and several hundred companies operate through local representatives.

Brazil and Mexico are the most industrialized countries. They produce, among other things, aircraft, cars, electronics, healthcare equipment, products from the chemical and pulp and paper industries, as well as food and beverages, cement and construction materials.

Mining is an important sector for the whole region. The industry is undergoing a major digital transformation. Automation, robotics, artificial intelligence, control systems, process control and water use and wastewater management are current areas of development.

In the energy sector, the transition to renewable energy, smart urban solutions, district heating and cooling, industrial energy efficiency, electric vehicles and the utilization of waste in energy production offer business opportunities. Several Latin American countries are investing in digitalization to develop, for example, distance healthcare, distance education, e-government and other smart solutions in various industries. Several countries will compete for the construction of 5G networks in the coming years. In Chile, a tender is already underway. Cybersecurity is also an interesting sector in the region.

In Latin American business culture, building strong and confidential relationships with the other party is important. The seller must be able to communicate his value proposition in a concrete way – in addition to the technical features, references to the benefits achieved by other customers as well as the training provided to users and maintenance and other services are essential.

Cooperation between Finnish companies, the development of joint offerings, and the building of relationships with local actors will be even more important in the future so that we can get involved in large projects and find new business opportunities, says Heidi Virta from Business Finland.

Anne Hatanpää, Secretary-General, Finnish-Latin American Trade Association.