Latin Business Chronicle: The New Latin America presents many opportunities ( also for Europe) - By R. Viswanathan
The New Latin America presents many opportunities ( also for Europe) - By R. Viswanathan
One would have expected the Latin American economies to come crashing down as a fall-out of the historical crisis in the united States and Europe. Not a single bank or financial institution went bust in the region while the United States and Europe faced collapse of companies and banks with turnover of more than that of the GDP of many of the Latin American countries.
None of the Latin American countries have gone to the IMF for rescue, even as some East Europaen countries have done so. While Iceland, situated far from the epicenter (USA) of the financial earthquake collapsed and had to seek rescue from Russia, none of the Latin American countries, which are in the proximity of the earthquake zone have suffered serious damage. There has been no panic summit meetings or rescue packages or nationalization of banks in Latin America.
In their October report the ECLAC (UN Economic Commission for Latin America and Caribbean) noted: "The economic slowdown and financial crisis in the United States will have a relatively modest impact on the Latin America and the Caribbean region in 2008, except for its exports. Compared to previous shocks in the United States economy and the world at large, Latin America and the Caribbean(LAC) is much less vulnerable than in the past, with a current account surplus, sounder public finances, a lower level and better profiles of public and external debt, and larger international financial reserves. Considering the severity of the global shocks, LAC economies are, on average, weathering the crisis significantly better than in the past." Despite the financial crisis, the region’s economic growth is projected to be 4.6 percent in 2008 and around 3.6 percent in 2009. Argentina's GDP will show a growth of 6.5 percent in 2008 and 3.6 percent in 2009. Brazil´s growth in 2008 is projected to be 5.2 percent in 2008 and 3.5 percent in 2009 while Mexico will have lower growth of 2.1 percent in 2008 and 1.8 percent in 2009. The growth of the region is sustained by a strong domestic demand. When the US sneezes the Latin American Region does not catch a cold anymore.
Labels: EU, Latin America, Trade and Development, US
