DON’T LET HUGO Chavez fool you: The past few years have actually been a golden era for economic management in Latin America. Though a small cluster of countries (led by Chavez’s Venezuela) have, to varying degrees, embraced destructive populism and done real harm to their business climate, the broader trend has been toward responsible fiscal policies, trade expansion, and market-friendly reforms. Partly for that reason, and partly because they have benefited from soaring commodity prices, Latin American economies are relatively well-positioned to weather the current U.S. slump.
As Alfredo Coutino, senior economist for Latin America at Moody’s Economy.com, said recently, “the region is expected to remain as one of the most attractive markets this year, thanks to its high probability of decoupling from the U.S. recessionary cycle. This is possible because of the region’s healthy macroeconomic situation, which is allowing local governments to use their savings to implement countercyclical measures to mitigate the negative effects of the U.S. downturn.”
