Latin America 'not undermined by US credit crisis'
Latin American and Caribbean (LAC) economies are remaining relatively unharmed by the financial turmoil hitting the US and other countries, a new report titled What if the United States Sneezed and Latin America Didn't Catch a Cold?, has indicated.
The paper, written on behalf of the American Enterprise Institute of Public Policy Research, has suggested that the region's economies look relatively healthy, which is largely due to reforms and rising commodity prices.
"Within the last four years, Latin American governments have taken advantage of a very favourable global environment," the report comments, referring to the low interest and inflation rates of recent years, as well as high levels of foreign direct investment in the region.
An additional factor which has benefited many LAC nations is the rise in commodity prices, which has allowed governments to achieve fiscal surpluses.
The report concludes: "As a result, Latin America on the whole is better equipped than ever to respond to domestic and international economic fluctuations."
According to the Organisation for Economic Cooperation and Development, Latin America has received a high level of foreign direct investment since the 1990s.
"With some sections of the global economy experiencing negative market speculation due to the US financial situations, it makes a lot of sense to look at markets less exposed to this. Latin America itself has been fairly independent of US financial trends, and of these countries, none stands out as much as Venezuela.
"A massive oil producing nation, isolated from the US financial crisis, this is a truly emerging market. Of particular interest is the tourist industry in the country, with properties on Caracola and Isla Margarita being sold to fuel the demand from both internal and external markets," Matt Legg, Emerging Earth.
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