Uruguay is most prosperous Latin American country

06 August 2018 Consultancy.lat

Uruguay has been named Latin America and the Caribbean’s most prosperous country in 2018. According to a study by the Boston Consulting Group – the Sustainable Economic Development Assessment – Uruguay is the best at turning economic prosperity into citizen wellbeing.

Placing 41st out of 152 in the ranking, Uruguay is the highest Latin American country on the list topped by Norway. The Sustainable Economic Development Assessment (SEDA) measures wellbeing in ten dimensions split across three categories; economics, investments and sustainability. 

For the economic category, each country is given a score based on three factors. Firstly GDP per-capita – the usual basis to determine a country’s prosperity – is included, followed by economic stability (rate of inflation versus GDP volatility) and employment statistics (rate of unemployment/underemployment). 

Uruguay has always been a relatively prosperous nation in the scheme of the Americas. Driven largely by beef, wool, crops and dairy products, the country’s economy has been growing due to increasingly trade-focused governments since the dictatorship during the 1970s. Although Uruguay felt a brief period of economic turbulence at the beginning of the century, based on instability in Argentina and Brazil, the country has since returned to a system of shared wealth. 

The Boston Consulting Group’s Sustainable Economic Development Assessment of Latin America

Investments is also split across three categories in the SEDA ranking; health, education and infrastructure. A high level of health care can be attributed to both access to healthcare as well as healthcare outcomes. Education is measured across the same duel success factors whilst the infrastructure dimension focuses on basics including power and water to information and communications technology.

Having quintupled its GDP since 2003 after a recession wiped $13 billion off the national income, Uruguay has now reached a nominal GDP of $53 billion. Spread across its three and a half million people, this equates to roughly $24,000 per-capita. Whilst Uruguay is not the most prosperous in terms of GDP in Latin America or the Caribbean (with those honours going to Panama and Trinidad & Tobago respectively), the wealth has been shared across the entire society.

This is the basis of the investments category and is also the heart of the SEDA ranking. The report states that, ‘a country’s wealth has a pervasive impact on many of the factors that contribute to wellbeing. We focus therefore on the performance of countries in converting the wealth they do have into wellbeing.”

The Boston Consulting Group’s SEDA criterion across ten dimensions

The sustainability category combines the most criterion and is perhaps what sets the consulting firm’s SEDA report aside from other wealth and prosperity rankings. Spread across four separate dimensions including equality, civil society, governance and environment, when combined, these dimensions cover some of the basic civil liberties which are constitutionally enshrined in the majority of prosperous nations.

Uruguay has historically had a strong framework of democratic governance. The country has upheld its commitments to human rights whilst furthering its civil inclusion agenda – gender equality is a factor of the civil society dimension – and has also implemented a strong regime of civil liberties. 

In contrast to the rest of Latin America, Uruguay’s score of 64.2 was only closely met by Chile, which scored 62.6. Several Caribbean island nations also scored highly in the index, including Barbados, The Bahamas and Trinidad & Tobago, while for mainland Central America, Costa Rica had the highest SEDA score with 58.9.

SEDA scores across the wealth-to-wellbeing coefficient

Overall, Uruguay’s score was higher represented than the majority of Latin America and was situated in the upper-middle quartile of the ranking. Surrounded by Kuwait, Bahrain, Greece and Saudi Arabia, Uruguay is proof in Latin America that countries with similar levels of wealth can have different levels of wellbeing.

When measured against the gross national income, a country’s SEDA score can prove that a lesser economy can provide a better wellbeing for its citizens through infrastructure and sustainable economic investments. This also, in turn, affects a country’s ability to respond to economic crisis and promotes a virtuous cycle of economic growth.

The authors of the Boston Consulting Group report state that, “Our findings mean that countries that focus on enhancing wellbeing not only raise the standard of living of their citizens but also set their country up for stronger and more resilient economic growth.” 

“Countries can – and should – aim to achieve the twin objectives of sustainable economic growth and improved well-being. SEDA can be a valuable tool as governments undertake this journey, shedding light on the impact of past policy decisions and informing strategies for the future,” the firm concludes.

Top consulting firms in Brazil for restructuring and turnaround

23 January 2019 Consultancy.lat

A new analysis of surveys among clients on track record / engagement satisfaction and management consultants on reputation has identified Brazil’s top consulting firms for restructuring and turnaround services. 

Companies in Brazil facing financial and operational difficulties, including rapidly deteriorating commercial performance, liquidity concerns, loss of key management / clients or refinancing risk, can according to data sourced by Consultancy.lat best place their faith in ten consulting firms specialized in restructuring, turnaround and crisis management. These ten consultancies are: Alvarez & Marsal, FTI Consulting, G5 Evercore, Moelis & Co, Rothschild, KPMG, Laplace Financas, Pantalica Partners and RK Partners.

When companies fall in financial distress, executives need to move swiftly to stabilize the business, while working towards a more long term strategy for sustainable strategic, operational and financial change. Working alongside debtors, lenders, shareholders and other stakeholders, consultants support with solving short-term liquidity requirements and action-planning to quickly preserve value and address potential risks to stability.

With stabilization in place, broader restructuring plans are designed and executed, including activities that enable cost optimization, operational restructuring, improved cash and working capital management and asset / debt restructuring. In the case of (potential) bankruptcy, restructuring consultants work with shareholders, debtors, creditors, regulators and other insolvency stakeholders on executing the administration or bankruptcy process – the procedures differ per country.

Top consulting firms in Brazil for restructuring and turnaround

In Brazil, the bankruptcy law covers three main proceedings. The first proceeding (‘bankruptcy’) is the actual process of liquidating a company’s assets in order to pay off debts. This involves selling all property and goods to meet the debt’s requirements. The ‘court-ordered restructuring’ proceeding has been put into place to help the company restructure its debts while carrying on its day-to-day operations (only applicable for companies that have been in business for at least two years). The third bankruptcy proceeding, ‘extra-judicial restructuring’, involves a private negotiation between the debtor and the creditor. Restructuring and insolvency consultants typically team up with lawyers to mediate between the two parties – if however no consensus is reached, the judge takes over the process.

Top restructuring consulting firms

Brazil’s list of top consulting for restructuring and turnaround services includes three advisory players that operate globally. Alvarez & Marsal (A&M) is one of the most well-known names in the restructuring landscape, which it for a large part owes much for its key role on the Chapter 11 bankruptcy case of the collapsed banking giant Lehman Brothers. Globally, Alvarez & Marsal has over 3,000 professionals in 50+ offices, including a Latin American presence in Brazil (Rio de Janeiro) and Mexico (Mexico City). Rival FTI Consulting is with a headcount 4,700 employees worldwide larger than A&M. Both consultancies provide a range of management and economic consulting, financial advisory (corporate finance and restructuring) and technology advisory services.

KPMG is one of the Big Four accounting and consulting firms. Its Restructuring & Turnaround practice has over 1,200 professionals worldwide. The Brazilian team operates mainly from the firm’s national hubs in São Paulo, Rio de Janeiro, Recife, Brasília and Belo Horizonte.

Four of the industry’s top players are local Brazilian consultancies. G5 | Evercore is one of Brazil's largest independent financial advisory services firm, operating bases in São Paulo, Rio de Janeiro and Recife. Formerly known as Arion Capital, São Paulo-based Laplace Finanças provides a wide range of financial advisory services to private sector and private equity clients, including restructuring and turnaround. Pantalica Partners, also located in São Paulo, has completed more than 70 restructuring engagements in Brazil with a restructured debt value of over $25 billion since inception in 2014. RK Partners specialises exclusively on turnaround and crisis management offerings, and in recent years played a role in the turnaround of among others Bom Bril, Rossi, Bertin Energia and Property Brasil.

Completing the list of Brazil’s best consulting firms for restructuring and turnaround services are the advisory arms of three international investment banks. New York headquartered Moelis & Company was founded in 2007 and today employs over 750 employees in the Americas, Europe, the Middle East, Asia and Australasia. The company serves the Latin America region through its locales in São Paulo and Mexico City. Lazard and Rothschild rank among the globe’s most prestigious investment banks – they both provides financial advisory and asset management services to corporations, governments and non-profit institutions. Lazard was founded in 1848 in the US, while Rothschild – which is owned by the Rothschild family, one of the wealthiest families in modern world history – was established in 1838 and is currently headquartered in Paris, France.

Related: Consulting market of South America grows 4% to $2.6 billion.