Across Latin America, economic stress grows by the day. Brazil is battling speculators and trying to calm frightened investors who could touch off a disastrous slide in the real. In Mexico, high rates are pinching consumers as the economy slows. Depressed commodity prices are squeezing Venezuela and Chile, while gloom deepens among corporations that have seen their market value drop by half.
Latin America is now the front line of the global financial crisis. But as the problems mount, talented leaders are stepping up to the challenge. Many of the region's managers, financiers, entrepreneurs, and opinion makers have spent their careers steeped in tumult, be it the debt crisis of the 1980s or the hyperinflation of the early 1990s. Their skills will again be tested as growth slumps to 2% or lower next year from last year's 5.1%. There is even a touch of hubris in their attitudes. "In Latin America, volatile environments have made the survivors very agile...and much better businesspeople," says LoreNzo Zambrano Trevino, chief executive of Cemex, Latin AmericA's biggest multinational. "We're much better prepared than the Asians are," he adds.
Executives like Zambrano are betting that the region will survive this latest bout of uncertainty with relatively few scars. In recent years, Latin countries have dropped trade barriers and privatized key industries. Companies have forged alliances with international partners to gain access to new markets. The best companies are leaner, and the best managers are outward-looking, with little need for government help.
BUSINESS WEEK has targeted 25 members of this new elite. Many are young. Many studied abroad and are on top of the same management trends as their U.S. and European rivals. They know how to deal with foreign investors, who are impressed by their open management styles and healthier disclosure policies. That could keep the money lines open to them, even as credit tightens across the region. A number of our elite are women who are rising to positions of power, bringing a new vision of business' role in bridging the gap between rich and poor.
Some of the managers BUSINESS WEEK has chosen are leading newly minted multinationals. They first crossed Latin borders to expand in countries where cultures are similar, and then ventured overseas to areas as diverse as the U.S. and Asia. Other managers, such as Dionisio Garza Medina, CEO of steel and petrochemicals producer Alfa, have boosted exports. They are meeting competition by streamlining, improving quality, and creating joint ventures with foreign partners.
CONQUISTADORS. Our entrepreneurs are striving to be leaders in cutting-edge techniques and products. That's a change from the region's tradition of using second-tier technology and hand-me-down goods. Mexican biotechnology entrepreneUr Alfonso Romo Garza is a major player in the world market for disease-resistant seeds, for example. "We're seeing a new kind of conquistador, a reversal of roles where now the Latin American is conquering new markets by producing goods and services that satisfy international demand," says Jaime Alonso Gomez, director of the graduate business school at the Instituto Technologico de Estudios Superiores de Monterrey in Mexico.
Meanwhile, Latin America's financial pros are holding their own against foreign banks that flocked to the region when times were good. Now, some of the foreigners are pulling back, and local investment bankers may recapture market shares. Highfliers such as Paulo Ferraz, chief executive of Brazilian investment bank Bozano Simonsen, are angling to grab more business.
Even opinion makers such as Argentine journalist Jorge Fontevecchia are creating successful businesses. Fontevecchia, who has risked his life to stamp out corruption through investigative reporting, now runs the profitable magazine Noticias. Such businesses are growing rapidly as the region's young democracies demand more objective sources of information.
Still, as Latin America has opened up, business leaders have come to understand that imprOving the region's skewed distribution of wealth will likely require more than market reforms. Eager to preserve public support for liberalized economies, companies are trying philanthropy, from building schools in Brazil to distributing food supplements to malnourished children in Mexico. "People are realizing that wealth isn't necessarily going to trickle down, so we are seeing businesspeople assuming a greater responsibility for social issues," says Manuel Arango Arias, a businessman who founded the Mexican Center for Philanthropy. With such vision, combined with their management skills, Latin America's business elite may well see the region through its current upheaval.