Executives of multinational companies could be excused for wondering what to make of Latin America as a place to do business today. On the upside, they see sound economic growth, increasing opportunities to serve a maturing consumer base, and a world-class commodity sector. On the downside, Latin America’s growth is much slower than Asia’s, and companies must deal with political uncertainties, regulatory constraints, and infrastructure shortcomings. The following questions and answers address some of the current concerns of executives working in the region or considering investments there.

To what extent should multinational companies be concerned about the recent political movement to the Left, particularly in Bolivia and Venezuela?

Care is needed to characterize the political shift in Latin America correctly. The continent-wide free-market measures of the 1990s were often not applied as successfully as might have been hoped. They failed to generate sufficient investment, while consumers found that they were not always the direct beneficiaries of the changes.

After the 2001–02 economic downturn, there was a backlash against the “neoliberal” reforms of the previous decade and a movement to restore the protectionist...