A Year of Elections in Latin America: Navigating Political Cycles, Seizing Long-term Opportunity
Around 4.2 billion people will go to the polls in 2024, in what many are calling the biggest electoral year in history.[1] This includes pivotal processes in both the United States and for the European Parliament, which will have major global impact. Six, or maybe five,[2] general elections will take place in Latin America.[3]
Companies in the region know that elections matter. This year’s results will weigh heavily on the regulatory and business environment – and thus it is always tempting to focus on horserace dynamics. However, looking beyond political cycles to identify opportunities should be the priority. Longer-arch analysis can be helpful.
The current context is shaped by a “pink tide” that in many cases came at the expense of traditional parties – one of Latin America’s historic swings between left and right.[4] Individual elections do have cross-border implications, as strong connections exist between national authorities and political systems. Yet, regional political trends are by no means homogeneous, as proven late last year by right-of-center wins in Argentina and Ecuador.[5]
2024 Latin American General Elections
- February 4 – El Salvador
- May 5 – Panama
- May 19 – Dominican Republic
- June 2 – Mexico
- October 27, November 24 – Uruguay
- TBD – Venezuela
Get our 2024 Latin America Insights in your inbox – Subscribe Now
The Case Against Short-termism in Corporate Strategies
The importance of strong stakeholder engagement strategies to navigate shifts in local politics is real. So is the need to not lose track of long-term strategies and goals.
Corporate focus on reacting to emerging trends and short-fuse issues is justified. The importance of strong stakeholder engagement strategies to navigate shifts in local politics is real. So is the need to not lose track of long-term strategies and goals. After all, very few investment projects are undertaken with a view to only achieving immediate gain.
Socio-economic fundamentals move much more slowly than political cycles. As business strategies are set, and inevitably adjusted, companies need to continue to look at the underlying structure of the economy, infrastructure and human resources. It is also key that they recognize, and leverage, policy anchors such as the USMCA, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and even the MERCOSUR treaties. And, perhaps more importantly, they should be wary of overlooking legitimate social aspirations. These include development, sustainability and inclusion.
An unattributed Argentinean phrase is that if you travel abroad for twenty days you will come back to find all has changed, but if you are away for twenty years you’ll conclude that nothing has.[6] This is meant in jest, of course, but it holds a kernel of truth about the region. The private sector needs to adapt to quick shifts in their operating landscape, many times driven by electoral politics. In most cases, they must do so while finding a way to steady the course. In that way, they can not only survive, but thrive.
In Focus: Mexico Election
A highly polarized electoral process will come to an end when nearly 100 million Mexicans vote on June 2, 2024.[7] The presidency will be in play, with the top contestants being women[8] and the candidate of the ruling coalition so far consistently ahead in the polls.[9] Congress will also be up for grabs, with a supermajority that allows for constitutional change a potential ultimate prize.
The stakes are high, and the contending visions are indeed very different. Voters will choose between a “second floor”[10] of the current state-centric project and the return of a pro-business approach.[11] Yet, again, the outcome will not by itself change the core characteristics of the world’s 12th largest economy.[12] Not surprisingly, both camps are highlighting the importance of continued industrial, export-led growth under the USMCA,[13] and promising to redouble efforts to nearshore production to North America from Asia.[14] Both also are underscoring the need for renewable energies[15] – in the sole G20 country yet to adopt a net-zero target.[16]
A traditional top-down approach to stakeholder management no longer seems to make sense. Stakeholders must be mapped and core social concerns identified.
Our Takeaway
Companies would seem to agree that major opportunities exist. Foreign Direct Investment into Mexico hit a record high last year.[17] Of note, around 92 percent came from incumbent companies, with reinvestment of profits driving an overwhelming 76 percent.
However, this does not mean corporates are always clear on how to best push forward – more so in a year of elections. A traditional top-down approach to stakeholder management no longer seems to make sense. President López Obrador has said more than once that “public affairs are more and more public,”[18] and in that vein has played out policy and regulatory matters in open view.[19] In such a scenario, which is likely here to stay, to mitigate risk and advance projects, stakeholders must be mapped and core social concerns identified.[20] After all, as has been said by practitioners[21] and leading experts[22] alike, companies can indeed deliver on both profit and purpose.
[1] Joe Mathews, “Opinion: 2024 will be the biggest voting year in world history. Can democracy survive it?,” Los Angeles Times (December 28, 2023), https://www.latimes.com/opinion/story/2023-12-28/democracy-election-authoritarianism-voting
[2] Florantonia Singer, “Maduro plays the game of confusion with his 2024 presidential run,” El Pais (January 3, 2024), https://english.elpais.com/international/2024-01-03/maduro-plays-the-game-of-confusion-with-his-2024-presidential-run.html
[3] “Global Elections Calendar,” NDI (last accessed January 19, 2024), https://www.ndi.org/elections-calendar
[4] Isabel Woodford, Carlos Vargas and Gabriel Araujo, “Latin America’s new ‘pink tide’ gains pace as Colombia shifts left; Brazil up next,” Reuters (June 23, 2023), https://www.reuters.com/world/americas/latin-americas-new-pink-tide-gains-pace-colombia-shifts-left-brazil-up-next-2022-06-22/
[5] Natalie Alcoba, “Year of the underdog: How ‘outsiders’ upended Latin America’s elections,” Aljazeera (December 30, 2023), https://www.aljazeera.com/news/2023/12/30/year-of-the-underdog-how-outsiders-upended-latin-americas-elections
[6] Dr. Hugo D. Valderrama, “’En 20 días todo cambia, en 20 años todo sigue igual’, ¿optimismo argentino?,” El Litoral (July 26, 2020), https://www.ellitoral.com/salud/20-dias-cambia-20-anos-sigue-igual-optimismo-argentino_0_DjKuW2sNiF.html
[7] “Nominal List and Electoral Registry Statistics,” Instituto Nacional Electoral (last accessed January 19, 2024), https://www.ine.mx/credencial/estadisticas-lista-nominal-padron-electoral/
[8] Rafael Romo, “The women vying to become Mexico’s next president,” CNN (October 4, 2023), https://edition.cnn.com/2023/10/04/americas/mexico-presidential-election-sheinbaum-galvez-intl-latam/index.html
[9] Carin Zissis, “Poll Tracker: Mexico’s 2024 Presidential Vote,” AS/COA (January 18, 2024), https://www.as-coa.org/articles/poll-tracker-mexicos-2024-presidential-vote
[10] Sergio García, “Lizett Arroyo: ‘Cuando Claudia Sheinbaum llegue a la presidencia se garantiza el segundo piso y la continuidad de la 4T’,” El Heraldo de Mexico (January 19, 2024), https://heraldodemexico.com.mx/elecciones/2024/1/19/lizett-arroyo-cuando-claudia-sheinbaum-llegue-la-presidencia-se-garantiza-el-segundo-piso-la-continuidad-de-la-4t-570959.html
[11] Fabiola Sánchez, “As a child, she sold street tamales; a senator now, she’s shaking up Mexico’s presidential race,” AP (July 20, 2023), https://apnews.com/article/mexico-politics-xochitl-galvez-andres-manuel-lopez-obrador-present-politics-30ed04316ff56de326754d13b8cef1dd
[12] “Mexico is now the 12th largest economy in the world,” Mexico News Daily (December 22, 2023), https://mexiconewsdaily.com/business/mexico-is-now-the-12th-largest-economy-in-the-world/
[13] Rafael Bernal, “Mexico’s opposition vows to restore order to US relationship,” The Hill (December 28, 2023), https://thehill.com/latino/4362946-mexico-opposition-us-relationship-election/
[14] Maria Elena Vizcaino, “Nearshoring Must Fuel Mexico Development, Sheinbaum Ally Says,” Bloomberg (September 19, 2023), https://www.bloomberg.com/news/articles/2023-09-19/nearshoring-must-fuel-mexico-development-sheinbaum-ally-says
[15] Thomas Graham, “Mexico’s ruling party picks climate scientist for presidential run,” Climate Home News (July 9, 2023), https://www.climatechangenews.com/2023/09/07/mexico-elections-claudia-sheinbaum-xochitl-galvez/
[16] “Mexico,” Climate Action Tracker (last accessed January 19, 2024), https://climateactiontracker.org/countries/mexico/
[17] “Foreign direct investment in Mexico hits record high,” Mexico News Daily (November 10, 2023), https://mexiconewsdaily.com/business/foreign-direct-investment-record-high-2023/
[18] “Stenographic version. Press conference of President Andrés Manuel López Obrador on March 30, 2023,” Presidency of the Republic (March 30, 2023), https://www.gob.mx/presidencia/articulos/version-estenografica-conferencia-de-prensa-del-presidente-andres-manuel-lopez-obrador-del-30-de-marzo-de-2023?idiom=es
[19] Anne Vigna, “Mexico’s presidential morning routine has reshaped politics and media,” Le Monde (updated July 8, 2023), https://www.lemonde.fr/en/international/article/2023/05/24/mexico-s-presidential-morning-routine-has-reshaped-politics-and-media_6027862_4.html#
[20] Ximena Mejía, “Claudia Sheinbaum mantendrá las ‘mañaneras’ si gana la Presidencia en 2024,” Excelsior (December 28, 2023), https://www.excelsior.com.mx/nacional/claudia-sheinbaum-mantendra-las-mananeras-si-gana-la-presidencia-en-2024/1627513
[21] “Larry Fink at BlackRock: Linking Purpose to Profit,” Cold Call Episode 184, Harvard Business Review (September 20, 2022), https://hbr.org/podcast/2022/09/larry-fink-at-blackrock-linking-purpose-to-profit
[22] Alex Edmans, “How great companies deliver both purpose and profit,” investESG (April 28, 2023), https://investesg.eu/2023/04/28/how-great-companies-deliver-both-purpose-and-profit-alex-edmans/
Damián Martínez Tagüeña
Managing Director, Mexico Public Affairs
Damián Martínez Tagüeña is a Managing Director in FTI Consulting’s Strategic Communications segment, based in Mexico City. Damián advises companies on complex public affairs and regulatory issues, as well as on reputational crises and disputes. Prior to joining FTI Consulting, Damián served in the Mexican diplomatic corps for nearly 20 years, most recently as Chief of Staff of the Deputy Secretary of Foreign Relations.
For further information regarding this insight, please contact Damián at [email protected].
Related Insights
About Our Latin America Practice
FTI Consulting advises companies doing business across Latin America to navigate the stakeholder dynamics around high profile corporate events, from transactions and market entry to crisis, disputes and litigation. We help clients anticipate critical political, policy and reputational risks and effectively overcome them, unlocking long term opportunity. Our Latin America practice works in a coordinated manner through our offices in Mexico City, Bogotá, and São Paulo, as well as with our teams in Washington D.C., Brussels, Madrid, Houston, Miami, and other important hubs. Through our vast network of strategic partners, we have coverage on all Latin American countries.
Washington D.C. | Houston | Mexico City | Bogotá | São Paulo
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals. ©2024 FTI Consulting, Inc. All rights reserved. www.fticonsulting.com |
