Governments pursuing populist policies are the biggest worry for CEOs with large business operations in Latin America, according to PwC’s latest CEO survey.
As many as 55% of business leaders surveyed believe that populism will hurt the growth prospect of their organization, while 45% of CEOs said they are concerned about sub-standard basic infrastructure.
Increasing tax burden, over regulation, and terrorism are the third, fourth, and the fifth major concerns, respectively, according to the report, which was released on the sidelines of the World Economic Forum in Davos, Switzerland.
In all emerging economies across the world, ‘social instability’ is the new worry, but, while protectionism is one of the major concerns in North America, Western Europe, and Asia-Pacific, it is not an issue at all in Latin America.
“Episodes of anti-globalization come and go as political points of view change. But today we operate in a connected world. Even the most inward-looking governments cannot block how people talk on their cellphones,” says Bernardo Vargas Gibsone, President and CEO of ISA, Latin American infrastructure conglomerate.
Unlike their counterparts in Europe and Asia, ‘availability of key skills’ and ‘speed of technological change’ are not a matter of concern for CEOs in Latin America, according to the report.
Each region reports a different mix of threats as the most concerning, but one general global observation is that CEOs across the world are increasingly anxious about broader societal threats — such as geopolitical uncertainty, terrorism, and climate change — rather than direct business risks, such as changing consumer behavior or new market entrants.
They all recognize that GDP growth alone cannot be a yardstick for measuring prosperity, with many CEOs calling for the consideration of multifaceted metrics for measuring economic success, such as quality of life. “This is particularly true in Latin America,” says the report.