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In all of the emerging markets inflation has declined to one digit and the days of super inflation in Latin America are gone. The majority of the countries have considerably reduced their debt.
In all of the emerging markets inflation has declined to one digit and the days of super inflation in Latin America are gone. The majority of the countries have considerably reduced their debt.
The level of total public debt in terms of percentage of GNP (at 38%) are now less than half the level of the developed economies (89%). The improvement in the commercial balances demonstrates that the balances of payments for current accounts are in a surplus situation, unlike many developed countries. For example, China has more than 1 Billion dollars in reserves. This would be enough cash available to buy all of the Brazilian economy and still have enough to buy Chile. The economies of the emerging markets in the entire world have attained a better improvement of their basic economies. Although China is the leader in this sector there is a question if it extends beyond China or the emerging Asian region. If 10 years ago someone had said that Latin America would be a net creditor, no one would have believed it. In any case, economies such as Mexico, Brazil and Argentina have shown in a fantastic change of position. The least risk justifies a new classification. And it’s unheard that the volatility of the emerging markets has been reduced in the last years. Still, in spite of the rise of 300%, the markets continue quoting with a discount. In reality, it has not produced a new classification, because the high level of growth of benefits in the region has remained at the same level as the growth in the market. The emerging markets capacity to sustain their own growth is due to the improvement of the structure. In the past, it was known that these economies were weak and volatile, characterized by hyperinflation crisis, debt and monetary crisis. It is no longer so. The global economic indicators are more sensitive to the events of the emerging markets. Which as a whole are growing at a rate double the industrialized economies and represent more often a larger portion of commerce and global investment; these realities should be reflected in the international financial institutions and economies, In the framework as well as government structure now that their future confidence of the institutions require also that the government structures evolve to reflect the new global realities. The investment climate in Latin America is changing in a positive manner to attract foreign capital. The recent information from the Economic Commission of Latin America and the Caribbean (ECLAC) reveals that the direct foreign investment grew considerably in the last 3 years. The United States being the largest investor of the region with 32% of the funds, due to the reduction of the European investment especially Spain. In South America the increase of foreign funds was 48%. South America Followed by Mexico and the Caribbean with an increase of 43%. Chile bettered any historic record and Central America remains more or less consistent, but still with a level relatively high of foreign investment in the last 10 years. The report Doing Business 2008 of the World Bank emphasizes that different countries in Latin America such as Columbia stand out on a world level, because of their reforms towards doing business regarding areas such as easing foreign trade, improving investment protection and decrease of fiscal load. It is important to realize that famous investment experts recommend Latin America, such as the Taiwanese Vice President Annette Lu who recently made a call to the high tech industry in Taiwan to invest in Latin America to reduce the risk of high concentration f investments in China. The Vice President moved the Taiwanese businesses to not allow “the Chinese Authorities” to control them and to move their investments to Latin America to reduce risk. In the same way the Italian Government told the national businesses to invest in infrastructure in Latin America, still they consider this opportunity to strengthen the path in regional integration.
It is clear today that there is a phenomenon growing of interest in investment in Latin America, due to the optimistic attitude towards the foreign investors, the low cost and the abundance of raw materials.
Today is a great opportunity to do business with Latin America.
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