National Competitiveness and Response to COVID-19: The Political Factor in Mexico and Brazil

Emerging markets face a challenging recovery from the COVID-19 pandemic. Although most nations strive to improve their competitiveness to escape from the economic downturn caused by the pandemic, the results may be different from the expectations of these governments. In this chapter, we analyze competitiveness in Mexico and Brazil. We attempt to go beyond the interpretation of results collected in well-known reports, such as the Global Economic Index, to demonstrate the need for further analysis in those countries where political factors may carry a non-comparable weight. We use the DD-Based 9-Factor Model, which considers the impact of politics in public policymaking. We compare Mexico and Brazil, as both nations are undergoing substantial political change, with personal leadership and geopolitical impact unmatched in the region. International managers should be aware of the impact of strong leadership upon public policy and national competitiveness. Those findings are no novelty in Latin America, a region where the political dimension may turn the table on investors without warning. Indeed, political factors should not be adequately addressed by competitiveness benchmarks in those nations where the rule of man may replace the rule of law.