With caution, Latin America practices eye in 2022

Political shifts and social turmoil can hinder investment in the region. However, infrastructure and technology remain bright spots.

FREMONT CA:Politics are on the minds of lawyers working in Latin America, where several significant economies are toying with leftist populism as the COVID-19 pandemic exacerbates social dissatisfaction.

Peru chose a leftist populist as president in July, and Chile did the same in December. Left-wing politicians are also strong competitors for the presidency in Brazil and Colombia, where elections are scheduled for 2022, while Mexico is three years into a six-year populist drive to restructure the economy. The quantity of legal work coming out of the region in 2022 will rely on country-specific factors. This includes political uncertainties, economic issues, and any future pandemic resurgence.

In the last month, the number of IPOs reduced, and there was broader hesitancy from the US and a few international investors, who are continuing to evaluate the relative risks in Latin America.

Infrastructure, energy, and technology—particularly fintech and agtech—are areas that could deliver work in the coming year. Law firms may also see opportunities to serve technology companies as a breeding ground for entrepreneurs in a region.

Latin American families strive to expand their assets and geographic exposure as the political and economic uncertainty outspread across the religion could stoke mergers and acquisitions.

Compliance work is also on the rise as US President Joe Biden's administration works to discourage corruption, particularly in Central America, as part of efforts to minimize the number of political and economic refugees seeking safety in the US. There could also be an increase in prosecutions in the context of corruption in Latin America.

High-ranking Department of Justice officials signified that the administration has appealed for more resources to investigate and prosecute corruption-related problems, where Latin America is the prime focus. The creation of the Department of Justice's Anticorruption Task Force, as well as its decision to establish a tip line to lend a hand to stand against corruption in Central America, the organization is indicating to the Northern Triangle countries of El Salvador, Guatemala, and Honduras that the government is committed to fighting corruption, human smuggling, and trafficking in the region.

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