The Latin connection

Starting in the Chilean capital of Santiago on Monday, Pedro Sánchez toured Latin America this week. One imagines that the trip provided welcome relief from apologising for corrupt colleagues and being accused of living in a brothel. As well as issuing the usual warnings about the "threat of the far right", Sánchez was also on a mission to improve economic relations with the region, although it didn't need any encouragement in that respect.

Sánchez must have looked at the floor and coughed awkwardly when Chile's leftist president Gabriel Boric listed corruption as one of the factors that erodes democracy. But the 103% increase in Latin American investment in Spain over the last fifteen years suggests that political instability - and even corruption - is a matter of perspective.

Despite the deadlocks and scandals of the last decade, Spain is the second most-popular destination (behind the US) for Latin American companies, which hold €67 billion in the Iberian country - around 8% of its total foreign investment, according to the Bank of Spain. More than half of this investment comes from Mexico: Carlos Slim, Latin American's richest person, and the Amodio brothers are amongst the Mexican tycoons that have invested in Spain - in the infrastructure firms FCC and Ferrovial and construction behemoth OHLA, respectively.

In June 2024, the Alliance for Ibero-America Business Council held its annual conference in Cartagena de Indias, Columbia. A reporter from El País mingled with the 400 delegates, finding that most Latin Americans saw Spain as a key entry-point for the African and European markets, attractive because of linguistic and cultural similarities and stability. One investor said Spain's problems were "small" compared to most Latin American countries; another saw Madrid as "much safer than any Latin American capital".

The children of many wealthy Latin Americans are now pursuing higher education in Madrid rather than American cities, often staying on to establish businesses in Spain with the family's money (MBA places at the prestigious IE Business School are particularly in demand). Last year, the number of Latin Americans living in the Spanish capital passed the one-million mark, bolstering Madrid's reputation as the "new Miami".

Instability and corruption, like most other things in life, are relative. Because I moved here from a country whose political scandals are embarrassingly tame (didn't Boris Johnson go to a party during the pandemic, or something?), Spain seems like a hive of iniquity; but if you're a Latin American millionaire, riding to work every morning by armoured car, it must look gloriously dull. It wouldn't be surprising if some of the leaders Sánchez met this week envied him for only having a prostitution scandal to worry about.