Latin America Becoming Investment Target

Posted by adaniels in Uncategorized on December 8, 2011

Investing in Latin America used to be a risky proposition. Now, according to the New York Times, that reputation is changing somewhat, with various investment advisors touting it as a land of opportunity.

Paul Sullivan of the Times notes that while some investors are pulling money out, companies like General Electric and Halliburton are increasing their business in the region. “What happened? Can it be that Latin America is now a solid investment, as the middle class in many of the countries increasingly becomes a driving force?” he writes. “Or is the region’s cycle of booms and busts set to repeat itself?”

Brazil, in particular, is growing – it recently overtook Italy as the world’s seventh-largest economy. Francisco Alzuru of Hansberger Global Investors tells the Times that Latin American countries like Brazil have learned from past economic struggles.  “This time, they have growth from the benefit of sound macroeconomic policy,” Alzuru said. “I don’t want to imply that Latin America is risk-free and we can invest with our eyes closed. But from a macroeconomic perspective, the boom and bust should be better managed.”

Sullivan, who used to work in Latin America, says that when he lived there, “Latin America’s economies were hard to tell apart.” But he says that now, the countries in the region “present as many opportunities and pitfalls as any other investment,” and notes that there are positives and negatives in investing in places like Brazil, Mexico and Venezuela.

Written by Lisa Swan

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