The MLB, Trade with China, and Ethical Companies
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The MLB’s Latin American players
How does Chinese trade compare with the US?
A ranking of ethical companies
Make sure you check out this week’s comment of the week at the bottom!
During last year’s season, there were 370 players from Latin America on the MLB roster, constituting about 40% of the league. There are 21 different countries represented in the MLB, and Venezuela and the Dominican Republic being the most significant ones after the US. The average number of Latin Americans per team is 12.33. Many players from the region are superstar performers. Here are a few highlights:
Venezuelan Salvador Perez scored 48 home runs for the Kansas City Royals in the 2021 Season, the most out of anyone in the league.
The Puerto Rican shortstop for the New York Mets, Francisco Lindor is currently the highest-paid Latin American player, banking $34M per season. He’s the 6th best-paid player in the league.
From the Dominican Republic, Albert Pujols is currently the active player with the most seasons played.
Ronald Acuña Jr. from Venezuela became the youngest player in baseball history to sign a contract worth at least $100M at age 21.
So, why are LatAm nations so good at it? The Dominican Republic has a rich baseball tradition, with a national league founded in 1890 and plenty of fields and instructors, given that baseball is their national game. The MLB also invests extensively in the country’s baseball infrastructure, with all 30 teams maintaining training academies there.
Venezuela also has an extensive baseball culture, being the country’s most popular sport. Playing baseball at school is a part of pretty much every Venezuelan kid’s childhood; it’s often seen as a way to get out of the country and succeed economically. Sadly, MLB teams recently shut down their academies in the country and no longer send scouts due to crime and the ongoing economic crisis.
China’s economic presence in Latin America has skyrocketed in the past two decades. According to the IMF, Cuba was the only country in the region trading more with China than the US in 1981. Since then, nine different countries have grown their trade relationship with China to surpass that with the US. Suppose we wouldn’t count Mexico, which accounts for 71% of US trade with Latin America. In that case, China is the region’s most dominant trading partner.
Increased trade has also scored China some political points. Through economic influence, China has tightened its grip in Central America and countries worldwide to cut ties with Taiwan and recognize Beijing as the legitimate government of China, according to its “One China” policy. In the past four years, the Dominican Republic, El Salvador, and Panama have cut ties with Taiwan and joined Costa Rica and Nicaragua in favor of siding with China. The notable exception is Paraguay, which remains the only South American nation that maintains ties with Taiwan, a relationship that has been going on for more than six decades.
The United States may no longer dominate the world in terms of goods traded, but that’s not the only way to measure a country’s influence and economic ties with other countries. For instance, software products developed in the USA are the most used worldwide, creating enormous wealth for the country. By far, it accepts the most significant number of foreign workers to go and participate in its economy. It has perhaps the best laws regarding ease of doing business, making it a hub for innovation. Eight out of the ten largest companies by market cap are from the US, all in the technology sector.
What makes a company ‘ethical’? At Latinometrics, we believe that’s tricky to measure and perhaps even tougher to rank. Still, the ranking company Etisphere takes a stab at it every year with its “World’s Most Ethical Companies” list. We found the above five Latin American companies in their ranking for this year. We decided to zoom into the business practices of the top two to understand what earns these companies a spot.
Brazilian beauty brand Natura & Co has appeared on Etisphere’s list for 12 years. Its most recent “Sustainability Vision 2030” focuses on three goals: to address the climate crisis, defend human rights, and embrace circularity and regeneration (or cutting down waste). The company insists on consistent principles across its brands: Avon, Natura, The Body Shop, and Aeso. Its commitment to the environment and human rights doesn’t stop it from making a lot of money; last year, it brought in almost $8B in revenue. If you like its mission, you can buy its stock on the NYSE.
In 2011, Cementos Progreso became the first Guatemalan company to join the United Nation’s Global Compact, a pact to “encourage businesses and firms worldwide to adopt sustainable and socially responsible policies.” The company has had reforestation efforts in Guatemala since 1930 and in 1985 introduced a formal commitment called “Agrobosques,” planting more than 2M trees each year. Employees at the cement plants may run into an iguana or two on their way to their stations; at Cementos Progreso, diverse species of plants and animals live undisturbed — another effort by the company to promote biodiversity.
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Comment of the week, from our Social Media vs GDP per person chart on LinkedIn: