Experts Recommend Spanish Businesses Prioritize Security, Sustainability and Political Stability When Choosing a Country to Do Business | Atalayar

Experts brought together by the Spanish Club of Exporters and Investors and Iberglobal to analyze the effects of the new global geopolitical strategy on the internationalization of companies recommended that Spanish companies operating abroad prioritize security, sustainability and political stability when choosing which countries to do business with in this time of extreme complexity.

“The world is becoming more and more complex and companies must be aware that major international changes have a significant impact on their daily activities”, said Enrique Fanjul, managing partner of Iberglobal, during an online conference that also included the participation of Tomás González, managing partner of the expansion department of Idom; Ricardo Santamaría, Director of Country Risk and Debt Management at CESCE, and Antonio Bonet, President of the Spanish Exporters and Investors Club.

Enrique Fanjul added that the great geopolitical conditioning factor that weighs on the decisions of internationalized companies today is the division of the world into two large rival blocs: “On the one hand, the democratic Western countries, whose greatest representatives are the United States and the countries of the EU; and on the other, the authoritarian bloc with China, as its greatest representative, and with support from Russia.

Experts agreed that this situation will further aggravate the breakdown of value chains that international trade has experienced since the start of the pandemic. In this regard, Tomás González, managing partner of the expansion department of Idom, pointed out that in this context of uncertainty “there will be an increase in costs in the supply chains”, among other reasons, due to the possible choice of closer suppliers and because many companies will need to increase their inventory levels to guard against possible disruptions. He also stressed that companies will need to analyze how to effectively pass on this price increase to their customers, “to avoid negative effects on their profit and loss accounts”.

Ricardo Santamaría, director of country risk and debt management at CESCE, expressed the same view, stating that “Europe should adopt a somewhat more independent position vis-à-vis these blocs in order to increase its level of self-sufficiency”to avoid being affected by problems such as those that have recently occurred in the international context.

In his opinion, geopolitics “has always been a conditioning factor” for internationalized Spanish companies”, although he acknowledged that the situation had changed due to two factors: “The problems have materialized in a greater geopolitical risk and much closer to home, especially since the beginning of the war in Ukraine, and the perception of these risks by companies and governments is now more important”.

Security, sustainability and political stability

Speakers from the Exporters Club agreed that given the current complex situation, companies must set their international objectives taking into account the security of the countries with which they maintain relations, their sustainability and their political stability. “The purely economic factor will take a back seat when it comes to setting strategic objectives,” said Ricardo Santamaría.

For its part, Enrique Fanjul predicted that the new situation will have a negative effect on trade flows and stressed that companies and administrations will have to develop intelligence systems in order to adapt with agility to current situations.

India, a new major player in global growth

CESCE’s Director of Country Risk and Debt Management also highlighted India’s growth in recent years: “It’s a country that’s going to take over from China in global growth, so we have to go there. pay close attention”. Ricardo Santamaría warned that in a few years the Indian giant would become the third economic power in the world, leaving behind Germany and Japan, because “India has a large young population, which continues to grow, in addition to to have become a leader in certain sectors such as IT services,” he stressed. He added that India “is going to become a key player in this geopolitical disruption, particularly because of its ability to maintain both trade and diplomatic relations” with the two blocs, while maintaining its own position on international affairs.