International Appeal Fueling Miami Recovery
Written by Marilyn Bowden on May 24, 2012
By Marilyn Bowden
While the situation in Europe bears watching, economists and business leaders say Miami’s international appeal should continue to aid its recovery.
"Miami-Dade’s economy is starting to pick up because of the global component," said J. Antonio Villamil, dean and research professor of economics at St. Thomas University’s School of Business and president of Washington Economics Group.
"With international banking, financing, the best air routes to Latin America and the Caribbean, and tourism, we are the Hong Kong of the Americas."
"Clearly what is happening in Europe is of interest to us here," said Frank R. Nero, president & CEO of The Beacon Council, Miami-Dade County’s official economic development partnership. "The devaluation of the euro vs. the dollar could potentially impact us here in Miami.
"Our chief markets there continue to be Spain, the UK, Italy and France. As for Spain, even though the economy there is very difficult, our level of activity continues to be relatively high. Many are looking for business opportunities here because of the distress there."
David Seleski, president and CEO of Stonegate Bank, said recession in Europe could mean more business for South Florida.
As their own economies falter, he said, wealthy Europeans will pour flight capital into Miami, not only buying condos but investing in businesses here.
"Europeans are not buying European debt; they’re buying American debt," Mr. Seleski said. "They have more confidence in our economy than in their own."
If the crisis in Europe were to implode, said Francisco J. Cerezo, partner and chair of the Latin America practice with law firm Foley & Lardner, the whole country would be affected.
But because Spain is a key player in Latin America, he said, "by association what happens with Spain’s economy will be felt even more acutely in Miami."
Global Spanish companies with Latin American headquarters in Miami-Dade or doing business in Florida wouldn’t necessarily leave, Mr. Cerezo said, "but economic activity could slow."
As for South America, he said, Brazil continues to be very hot, and with the country hosting the World Cup in 2014 and the Olympics in 2016, that should continue for several years.
"New wealth in Brazil has positively impacted South Florida," Mr. Cerezo said. "Colombia is also doing well, and Mexico is still increasing activity through Miami.
"The political and regulatory climate in Venezuela that makes it difficult to do business has translated to a positive in Miami because sophisticated businessmen are coming here and looking for investment opportunities.
"The Dominican Republic is seeing growth, and Panama and Costa Rica are bright spots in Central America."
Economic groups from Latin America have outgrown their national boundaries and are expanding globally, he said — and "because those deals tend to be done in Miami, local financial institutions have a hand in them."
Miami’s ties to Latin America give it a competitive advantage over the rest of the state, Dean Villamil said, due in part to its ability to sell goods and services — legal, medical, accounting, banking — to emerging markets as well as to major trading partners such as Brazil, Colombia, Peru, Panama and Chile.
The third positive factor, Mr. Nero said, is emerging trade with Asia, predicated on the widening of the Panama Canal to accept supertankers and infrastructure work at Port of Miami to be prepared for its reopening.
"That would be direct link for us to Asia," he said, "and if we can see increased flights to Asia, that would clearly be beneficial. One area in which we’re lacking is direct flights to Asia."
Dean Villamil said more investment from Asia will drive the opening of direct flights to and from Asia, "and we do need that.
"China has become a major trading partner on the import side."
There’s an upsurge of interest among Chinese companies in doing business with Latin America, he said. "For example, at St. Thomas University we have close to 100 Chinese students enrolled next fall. They’re coming for an MA in international business with a concentration on America. Other universities are seeing the same trend."
China is a significant consumer of natural resources, Mr. Cerezo said, and is buying into them in Colombia, Chile and elsewhere, which will have a positive economic influence in Latin America, and therefore Miami, for the foreseeable future.
Chinese property conglomerate Dalian Wanda Group’s recent acquisition of US movie chain AMC Entertainment Holdings, he said, signals a new direction in China’s appetite for global commerce.