For the last three to four years, Latin America has been considered as one of the booming economies. Indeed, hardly any publication on emerging markets and future economic prospects goes by without mentioning the potential of Brazil, Mexico and several other countries. So does a recent article in The Economist, highlighting the changes in Latin America’s migration patterns, and referring to it as the new New World.
The article argues that Latin America, which has traditionally been in the role of exporting workforce, is becoming increasingly recognized also for importing foreign talent. Today, the LATAM countries attract not only individuals in search of better job prospects, but also enterprises, who look into further global extension, new business opportunities, and economic profits. Naturally, such trends are influenced by the economic recession in developed countries. However, apart from this pushing factor, there is also a pulling force, namely the local expanding economy that creates many new vacancies and opportunities.
As The Economist notes, foreign firms see opportunities in Latin America especially in the service sector, as these developing countries are raising their prosperity and thus a ‘new middle class’ emerges. On the other hand, in spite of high population growth and density, employers have difficulty filling jobs with local people. For example, the numbers reported in the article indicate that within the past eight years a total of 12.5m new formal jobs were created in Brazil, and 71% of companies struggle to fill these vacancies. The main reason for such local skill shortages is that in spite of large employee pools, there are not enough people with the necessary education, knowledge, and experience. Hence, the demands do not match the resources. The future development of education in Latin America will probably decrease this gap, but the current reality is that Mexican and Brazilian students have the same education levels as those from Thailand and Romania. Therefore, in the near future the demand for foreign talent is most likely to remain or even increase.
Unfortunately, even though they are highly in demand, foreigners seem to have difficulties entering the Latin countries. A recent article by Associate Press proclaims that emigrants from Europe face red tape in Latin America. Often entering on tourist visas, job seekers from Spain and Portugal face the hurdles of the bureaucracy in their way. One of the featured personal stories in the article describes the situation of two Spaniards, who entered Chile without a work a visa, and as a result could not get a formal job. At the same time, getting a work visa was impossible without a formal job offer. Sounds like a dead end.
Reflecting on the same topic, The Economist article notes that many governments in Latin America make hiring foreigners difficult. Why so? Well, it is not surprising given that traditionally migration was in the opposite direction. Latin America simply lacks experience in managing immigration as, following the numbers provided in the article, Mexico has less than 1% of foreign-born population while in Brazil it is even lower, at just 0.3%. Certainly, the increasing number of foreigners entering these countries should improve the situation, helping both the foreign job seekers and the Latin countries to thrive.
The emerging and developing countries and Latin America are focused on attracting new foreign investment with historical records, but also are bringing much human capital, specially from Europe: France, Spain, Germany not only see countries like Brazil or Chile, a solution to a specific problem.