Latin America Could Be Among the Winners in ‘New World Order’, BlackRock CEO Says

In analyzing the current global political and economic panorama, Larry Fink offered some forecasts of who could best take advantage of the context generated by the war in Ukraine

Larry Fink, CEO of BlackRock, said the response by companies to the war in Ukraine has been the best demonstration of shareholder capitalism.
By Bloomberg Línea
April 05, 2022 | 06:00 PM

Bloomberg Línea — More than 40 days have passed since the beginning of Russia’s invasion of Ukraine, during which the global economy has suffered significant twists and turns as a result of the numerous sanctions imposed on Russia, the exit of multiple companies from that country, and the willingness of Europe to end its dependence on Russian fossil fuels, a combination of facts that, according to Larry Fink, CEO of BlackRock Inc. (BLK), have ushered in a “new world order”.

However, the geopolitical conflict could benefit those who focus on new businesses, and Latin America has the potential to be one of the “winning” regions, Fink said Monday during the Latin American Virtual Forum 2022, organized by BlackRock, the world’s largest asset manager.

“If Brazil, Mexico and Colombia focus” and open for business, “we’re going to see more companies closer to the demand for nearshoring or onshoring”, Fink said.

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In particular, he said, Mexico, with its proximity to the United States, would be “enormously benefited” by working toward that goal.

He also estimated that Europe will be better off by decreasing its dependence on Russia, and turning to other energy sources, which will lead to a reconfiguration of supply chains.

Fink said he does not believe that there will be a “very long recession at a global level, or in Europe”, as there are fiscal stimuli that are about to be introduced.

However, he said that for markets that are trying to develop, “having access to capital can be critical”.

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Fink also talked about “shareholder capitalism,” which is how he defined the decision of a number of companies to leave Russia once the country invaded Ukraine. He said that as a result, “these companies are going to be better off,” because they acted by listening to their employees and customers.

“This is not based on sanctions, it’s based on behaviors. Leaders who could not justify having business in that country at that time. It’s a key point, to call on governments around the world to see what the power of shareholder capitalism is. More and more companies are reevaluating their dependencies,” Fink said.