LatAm e-News, July 11, 2016
Thursday June 23, 6/23, might be considered one of the new milestones in contemporary life following, though each with their own characteristics and with no intentions to compare their importance and magnitude, 9/11, subprime mortgages crisis (which became evident with the declaration of the bankruptcy of Lehman Brothers, 09/15/08), and why not mention 9/29.
That day in 2008, President Bush was clear that the United States was in a state of panic about the financial situation resulting from the mess caused by the «subprimes” and at the gates of a possible major recession. It was then that after arduous negotiations he submitted to Congress a rescue plan to overcome the situation. The plan was to inject 700 billion dollars for the purchase of «troubled mortgage-related assets» (the famous «subprime») and pull away these “supposed» assets from accounts of the banks involved until the situation was overcome. The American Congress flatly rejected the plan that Monday 29 September 2008, which caused a quick drop of all stock exchanges worldwide. The Dow Jones index fell 777 points (!!!), the largest drop in history.
For a moment, it was thought it was the end, or at least the beginning of a long dark period that many predicted could outdo the impact of the Great Depression or «crisis of 29,» which lasted from 1930 to the early 40s. Undoubtedly, the longest crisis in time and practically of global reach.
In this context, with the crisis of subprime mortgages, on the day of Congress refusal to President Bush, the day that all investments seemed to crush and despair began to eat away again the whole world, in that precise context SAHIC was launching its first conference to the industry.
That Monday 29 September 2008, in Buenos Aires, knowing what had happened in Washington, 350 participants from 16 countries were immersed in 2 days of meetings and discussions tailored to meet the business opportunities in the world of hotels and tourism in South America.
The opening of the session aiming at having the investors´ vision was introduced by me with a defiant comment about talking about the present situation, in that context that very day.
Reality responded faster than expected. Investments occurred throughout the region. New markets welcomed players and projects that had been a dream for years and suddenly began to come true. Just a tip of the iceberg that during all the last years the region began to let show to confirm not only its size but, as soon as it surfaced, others apparently smaller began to emerge .
SAHIC had its most difficult time in 2009. The event was planned in Rio de Janeiro. The effects of the subprimes were felt mainly in the region during that 2009, while Brazil began to experience a period of very strong growth that led its currency to appreciate as almost any other in the world.
Everyone wanted to do business in Brazil and everyone knew how expensive and difficult it was. SAHIC too, but the conference started then and here we are, close to its ninth edition in Guayaquil on 25, 26 and 27 September and close to announce of course the tenth edition of SAHIC South America as well as the new projects running after the recent partnership signed with the renowned Bench Events, responsible for large investment events in Europe, Africa and the Middle East and one of the founders of the renowned Berlin Forum, IHIF – International Hotel Investment Forum.
Most analysts begin to inform us about everything that comes from Brexit of June 23, about the impact this decision will have on the global economic – financial activity and, in particular, about the impact it will have on Latin America.
Brexit, the LATAM hotels industry and SAHICIt is enough to mention the recent article by Andrés Oppenheimer, Argentine journalist and writer living in the USA for years, which was considered by Foreign Policy magazine as one of «the 50 most influential Latin American intellectuals.» His article «The Brexit, bad news for Latin America,» published in the Nuevo Herald on June 29 merely mention what most analysts almost all over the world are announcing from the day after the vote where British defined their exit from the European Union. Apart from referring to, among others, the implications of the Brexit will have on investments in the region, it argues that the main and most dangerous impact would be the political one, referring to the danger of protectionist and anti-globalization demagogues finding the fertile ground to try to impose their ideas against free trade.
With all respect for Oppenheimer, I believe that being based in the northern hemisphere, with the full impact of the «first world» and the main emerging countries, even when a major concern in Latin America may not allow to see well this forest and recognize the different tree species that compose it.
Unlike the United States and major European economies, Latin America knows a lot about demagoguery, populism and herbs of similar species. The supposed «boom cycles» under those regimes are very well known in these lands. They have been clearly suffered by Latin American citizens, especially by the poorer ones under «promising veranitos (summers)» that deluded with endless parties that eventually had to be paid while the undeclared coffers of the leaders who pushed those saving acts grew so exponentially.
Latin America is in a process of transformation, it does not suffer from bloody wars or religious or incomprehensible ethnic conflicts. It has many issues to solve, but in general terms there is no place for Brexits. The process that Latin America is starting to experience in some cases, while in others it is being strengthened, is exactly the opposite.
Latin America is mainly a land of opportunities, as ever, open to the world offering what it is and especially what it will become.
Latin America is sorry about the decision of Brexit. I would say that, as few, it can understand the crisis that leads to the leaders who carry out their flag to be now not willing to take responsibility for what they have done, making their country, and specially their people, poorer, for the sake of a party that someone finally, sooner rather than later, will have to pay, the same citizens who today claim to release the reproach of the globalization they refused when they decided to exit from the EU.
Latin America wishes the best to the UK, to the countries that make it up and mainly to its people.
With the care of the case, with the teachings out of mistakes, Latin America opens as a source of opportunities in a growth process following the leading countries that have demonstrated that the free market with clear government policies is the way leading to growth. New players are joining, who have turned around and are now aligned with that scheme.
The next few years will be years of great opportunities for most countries in the region, while Brexit is a reality that nobody knows how it will end.
After the boreal summer that is already here, SAHIC will be a great opportunity to assess the situation and especially to know what ‘s coming.