Regress AL in security and stability; Asia advances

Latin American road networks fail to meet growing commercial demands because they are insufficient, obsolete and do not receive maintenance, to which cargo theft is added, Economist Impact stated in a study on supply chain relocation (nearshoring), prepared with support from JP Morgan.

Investing in basic infrastructure is a first step for Latin America to become an attractive hub and attract foreign direct investment (FDI) that previously went to China.

The same applies to energy infrastructure, air and sea ports, roads, information technology and communications, the analysis adds.

The document points out that Latin America must improve its business environment with more political stability and security, in order to quickly capitalize on the potential generated by changes in supply chains. Other regions have also identified these opportunities and are actively competing, particularly Asia.

It is crucial that the region invest in itself and set a standard for companies that are also interested in doing so.concludes the signature.

Railways, key

When it comes to goods transported by rail, Mexico leads regional rivals such as Chile, Brazil and Argentina, and even entire regions such as East Asia and the Pacific, the Middle East, North Africa and South Africa. Asia.

Mexico has a very sophisticated freight railway network that connects with the United States and Canada, but the passenger railway network is very limited. Expanding the railway network is a priority for President Andrés Manuel López Obrador.

While greater public investment may be an opportunity, it could also become a double-edged sword for investors. Recently, the Mexican government confiscated part of a railway line considered of public utility and transferred it to a government entity that is building a line through the Isthmus of Tehuantepec (separates the Pacific Ocean and the Gulf of Mexico). Political stability and respect for the rule of law is an important component of companies’ calculations and its absence could hinder investmentsargued Economist and JP Morgan.