…but with only a third of the population”. Megainvestor Marcelo Claure believes Latin America could be in for its best years in a long time. Above all, the largest economies will drag the region along with them.
by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung
The 52-year-old Marcelo Claure from Bolivia has a legendary reputation as an investor in Latin America. At the beginning of his career, he sold used cell phones from the U.S. to his home country. Later, he headed the legendary startup investment fund Softbank: alongside its founder Masayoshi Son, he was one of the world’s most powerful startup investors for years.
After parting ways last year, he has refocused on Latin America. On Harry Stebbing’s podcast recently, he explained why he thinks the continent’s future is so bright. They are illuminating insights.
Claure believes Latin America is being underestimated right now. “Latin America’s GDP is twice the size of India’s – but with one-third the population.”
For him, Latin America is so interesting as an investment location because there are more opportunities than capital, he said. “Everywhere else it’s the other way around: there’s more capital than investment opportunities – which drives up valuations.”
For example, a quarter of the world’s fintechs are located in Latin America. Brazil in particular has a highly developed financial market capable of handling complex financial transactions. The success of the online bank Nubank shows this.
Claure is confident about the future of the two most important markets in Latin America – Mexico and Brazil.
There are two reasons for this: “Nearshoring, or supply chain diversification, and the region’s rich raw material deposits form the basis for Latin America’s future economic stability and dynamism.”
Brazil, like Argentina, Chile and Peru, is benefiting from the global energy revolution. The region is the most important exporter of the ores and metals needed for e-mobility.
Mexico and Central America, in turn, would benefit above all from nearshoring and trigger a long-lasting growth spurt there. More and more corporations are relocating their production to Mexico. This gives them access to the large North American free trade zone USMCA.
What happens in Brazil and Mexico will determine the economic performance of the entire region: Together, the two economies account for around two-thirds of Latin America’s economic power and more than half of its population.
In a nutshell, it can be said that when these economies grow, they pull all the states in the entire region along with them. The reverse is not true.
But Claure also sees positive signs in chronic crisis states like Argentina, such as the skilled workforce there and the country’s potential in the technology sector. Some of the most successful former startups are now global corporations, such as the online retailer Mercado Libre or the software developer Globant.
For the Bolivian, Latin America is therefore facing its best decade in a long time. It is to be hoped that his previously proven instinct for investment will apply this time as well.