Political Risk Latin America Blog @PolRiskLatam

The smart way to explore Latin America

Posted in News and Articles by politicalrisklatam on August 5, 2010

by Luis Carrillo for Investment Week, August 5th, 2010.

With rising consumption, infrastructure investment and the prospects of higher returns on equity than its peers, perhaps now is the time to look at Latin America.

Changes that have made a difference

First of all, why the turnaround? It is true many investors have been wary given the political and financial crises that hit the region in the 1980s and 90s – but the economic transformation since has created significant investment opportunities.

This change has been driven by a commitment to control inflation and fiscal integrity, and supported by strong commodity prices and demand.

As a result, the country risk premium for Latin American equities has fallen, attracting increased foreign investment to its key markets.

The region has also benefitted from privatisation and deregulation of some sectors, trade liberalisation, a gradual improvement in solvency ratios and a substantial improvement in the structure of sovereign debt dynamics – pragmatism that has benefitted Latin America enormously through the recent crisis. (continue reading…)

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