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British businesses should look beyond Brazil as Latin America offers PPP opportunities

UK construction firms are guilty of not looking beyond Brazil when they consider Latin America.

While the Brazilian economy may be fragile, the Pacific Alliance governments (Chile, Colombia, Mexico and Peru) in particular have performed well economically in the last decade.

In Colombia, despite a fall in the oil price, the IMF estimates 2016 growth will still reach 2.7 per cent – second among all Latin American countries (behind Peru at 3.3 per cent).

Construction is growing at more than 10 per cent per year.

Misguided view

The indifference of British business towards Latin America lies in false perceptions.

The first is that the Spanish have the continent sewn up – yet the success of Germany shows this is far from the case. Just 1.4 per cent of British exports go to the region, compared with 6.5 per cent of Germany’s. Latin America is, in fact, an anglophile continent.

“Out of fashion in the UK, PPP is thriving in Colombia. Private investment in infrastructure has tripled since 2010” 

The long history of many British companies is respected, and they have a reputation for fairness and high quality.

Second, outdated attitudes persist: “To too many at home, Latin America remains a mysterious continent of comic-opera revolutions and debtor governments.” So said the British ambassador to Brazil in 1954, yet those attitudes remain today.

PPP hotspot

It is in public-private partnerships that significant opportunities lie for British expertise.

Out of fashion in the UK, PPP is thriving in Colombia. Private investment in infrastructure has tripled since 2010. The highways sector is developing on an unprecedented scale: between now and 2021, USD $17bn will be invested in the country’s Fourth Generation highways.

There are also opportunities for involvement in the development of ports, airports and railways.

Moreover, regions within Colombia are largely autonomous in their economic and development policy, so projects rarely become the political footballs that they do in the UK.

McBains Cooper, for example, has embarked on a number of PPP projects in Colombia, providing consultancy services for the development of social housing projects, inter-modal stations, museums and libraries, airports, roads, hospitals, schools and government buildings. The opportunity is there for others to do the same.

Latin America’s relationship with the rest of the world is in flux. There is ample scope for partnerships with British business that could be of significant profit to both sides.

But unless we continue to remain open-minded and explore new markets, we will continue to miss out compared with our competitors.

Santiago Klein is the international director of McBains Cooper

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