For some commentators, two events this week have highlighted the ascendency of the political left in Latin America. The first was the return of Venezuelan President Hugo Chavez to his country after months spent battling illness in Cuba. The second was the re-election of Rafael Correa in Ecuador. These events have unnerved some investors, who are wary of further regulation, taxation, and even expropriation of assets.
Yet GlobeScan’s data suggest that, in the wider region, business is generally more popular than government. In Chile and Peru, though global companies are less well perceived, national companies are more trusted than government, and in both Brazil and Mexico the government suffers from a striking deficit in trust compared to business.
Also at odds with the view of the region as “anti-business” is Latin Americans’ strong trust in the free market: 46 percent of Mexicans, 59 percent of Brazilians and 62 percent of Peruvians express some degree of agreement with the statement “the free market is the best system on which to base the future of the world.”
Regional trust in business and the free market economy could be seen as consistent with strong support for capitalism, but South Americans are very concerned about economic inequality. No less than 81 percent of Brazilians see inequality as a major problem, along with 63 percent of Mexicans (a country with a right-wing government) and 52 percent of Peruvians. Similar proportions believe that the wealthy do not deserve their riches. It is likely from this concern over inequality that left-of-centre governments derive some of their support.
The fact that business remains trusted in many parts of Latin America suggests that companies should be wary of characterizing the region as “anti-business.” However, corporate engagement with local communities, and substantial programs to address inequality, are sensible strategies to ensure public support is retained in the long run. This is especially so for global companies, who need to work harder than their local peers to convince people they are working in society’s interests.
Finding from the GlobeScan Radar, Wave 2, 2012
This post was written by former GlobeScan Research Director, Sam Mountford.