Socio-political risk in the Latin American construction industry

What is it about?

This paper explores the socio-political risks affecting the construction sector in developing Latin American countries, focusing on how political, legal, economic, social, and cultural factors impact construction projects. The study used qualitative research methods, including semi-structured interviews with key construction professionals such as architects, engineers, and project managers in Brazil, Bolivia, Colombia, and Mexico. Findings revealed various risks stemming from the political, social, and cultural environments. Key political risks include government instability, lack of long-term public sector planning, political dissatisfaction, corruption, bureaucracy, inflation, and logistical challenges. Social and cultural risks involve difficulties in finding skilled, reliable workers, lack of community engagement, unpredictable community demands, crime, gender issues, attitudes toward technology, and inadequate health and safety practices.

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Why is it important?

The research concluded that the political environment poses a greater threat to construction projects than the social environment. The study emphasized the significant impact of political instability and other government-related issues on the successful management and execution of construction projects in the region. To address these risks, the paper recommends that construction companies and professionals develop more formalized plans for managing socio-political risks, enhance community consultations and communication with staff, implement stronger theft prevention measures, and increase health and safety training. Additionally, it highlights the need for greater awareness and preparedness to deal with threats, harassment, and aggression in construction environments. These recommendations aim to mitigate the various risks and improve project outcomes in the Latin American construction sector.