Towards a new Spanish and European economic strategy in Latin America
The Spanish Institute for Strategic Studies released an analysis by economist Ramón Casilda on Spain's new international economic policy towards Latin America for the 21st century. According to the author, Spain should position itself as a strategic hub for the entry of Latin American companies and investments into Europe, and from Europe into Latin America (LA), constituting an important 'geostrategic' resource for the European Union (EU). The EU has lost influence in LA to China in recent years and Spain should lead this new strategy, taking advantage of its relevant presence in the region in key sectors (banking, insurance, electricity, energy and telecommunications, among others), as well as the growing flow of investment from LA to Spain.
Main conclusions of the analysis:
- Latin America (LA) and Spain are strategic partners due to historical, cultural and linguistic ties:
- Spain is the largest European investor in LA, and the second in importance only behind the United States, with an investment of 133,073 million euros in 2020, out of which the financial sector represents 29%, telecommunications 10%, energy 9% and oil and natural gas 8%.
- LA investment in Spain is growing in importance, reaching 48,631 million euros in 2020, out of which 58% comes from Mexico.
- The current macroeconomic, social and political context represents an opportunity to strengthen Spain's and the EU's ties with LA:
- China has burst strongly into the region, which has led to a decline in relations between the EU and LA and a loss of influence in the region.
- Spain should lead a new economic policy with LA, positioning itself as a strategic hub for the entry of companies and investments from Latin America to Europe, and from Europe to Latin America, constituting an important 'geostrategic' resource for the European Union.
- This new strategy should allow Spain to "align" its economic weight with its influence, in line with the importance of its investments.
- Spain's Presidency of the EU in the second half of 2023 could provide a boost in this direction.
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