Latin America steps up

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Latin America is a region attracting attention from the world's major investors. With many important industries and a flourishing trade and import–export market, Latin America is fast becoming an economy to be reckoned with, as well as a serious player on the major events stage.

Latin America comprises the three regions of Central America, South America, and the Caribbean. Central America is usually defined as seven nations–Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama–and may occasionally include Mexico's southernmost region. Geo–politically however, Mexico is considered to be part of North America. Central America has an area of 524, 000 square km, or almost 0. 1% of the Earth's surface. As of 2009, its population was estimated at nearly 42m. It has a density of 79 people per square km or 206 people per square mile. Meanwhile, South America, the world's fourth largest continent, comprises around 371m people living in 12 nations–Argentina , Bolivia , Brazil , Chile , Colombia , Ecuador , Guyana , Paraguay , Peru , Suriname , Uruguay , and Venezuela. The continent extends 7, 640 km from Punta Gallinas, Colombia, in the north to Cape Horn, Chile, in the south. At its broadest point, near where it is crossed by the equator, the continent extends 5, 300 km from east to west. South America is connected to North America by the Isthmus of Panama. According to leading law firms in the US, 2010 promises to be a year of economic progress and new business opportunities in Latin America. US trade with Latin American countries totals some $600bn a year, and the region's role in the overall global economy is gaining ground. Designated one of UK Trade and Investment's High Growth Markets, the UK is Brazil's 15th largest supplier, with a 1. 9% market share. Brazil is the UK's most important trading partner in Latin America, with UK exports of goods valued at £523m in 2008, an increase of 50% on 2007. Bilateral trade between Brazil and the UK increased 38% to over £4bn in 2008. Meanwhile, the UK is Argentina's 14th largest supplier. In 2008 estimated UK exports to Argentina were £307m, and grew by 35% on 2007 figures. Bi–lateral trade in 2008 reached $1. 5bn (a 23% increase on 2007). China now does more than $100bn in trade with Central and South American countries–up 20 times from just a decade ago. At the same time, China is also making substantial sovereign wealth investments in the region's energy resources, as well as other infrastructure. Regional opportunity"Latin America has successfully weathered the economic storms of the past year, " said JosÉ Luis Vittor, partner in the global law firm McDermott Will & Emery, which sponsored a two–day Latin America Forum in the US in December 2009, bringing together some of the top players in the legal and business community to focus on outlook, policy, and opportunities in Latin American markets. "Because Latin America has been largely insulated from the impact of the global recession in the past two years, there should be even more opportunities for such economic development in the coming year, " said Vittor, who co–ordinated the Forum programme. Investment strengthChina isn't the only country taking interest in Latin America. Korea, Vietnam, Russia and India are among many other countries now targeting the region as an investment and development target. Intra–regional outbound investment from Brazil and Mexico is also a growing force. The conventional and renewable energy sectors also give Latin America opportunities to gain new ground, especially with many countries now enacting new regulations with mandates to boost renewable energy resources in their local energy matrix. "Latin American countries must demonstrate to foreign investors that the region as a whole is very sensitive to political change, " said Vittor. "Over the long run, Latin America is an attractive place for foreign capital–even though certain countries may still have some political risk. "The public–private partnership process is moving forward at a faster pace in Latin America than in the US and countries in the region still require private investment as there is a growing demand for infrastructure development and investment in the Americas. Country outlooksOn a country–by–country basis, Forum participants identified notable strength in 14 of the region's largest national economies. These were among the outlooks offered: Argentina: The strongest growth in Argentina is anticipated in the energy and agribusiness sectors. Cross border transactions are increasing with Brazil, Chile and Peru. The financial market could experience changes due to expiration of the Central Bank chairman's term and potential funding needs from the public sector. However, there are actions at the institutional level, such as the departure of the chair of the Argentinean SEC and a number of increasing disputes between the government and the business sector, that could further derail the investment interest in that market. Brazil's economy is solidly growing, with good activity in the energy sector and strength in mergers and acquisitions. All sectors are open to private and foreign investors, but there is speculation that a change is possible in the media sector. Brazil is very active in the region and is currently the largest investor in Venezuela. The new oil and gas regime submitted to Congress is expected to be approved by March 2010. Early approval in the House of Representatives is anticipated, but the prospects for legislation in the Senate are more uncertain. Those opposed to the bills are promising additional debate on key provisions. However, in spite of resistance in the Senate, approval of the bills is expected. Chile is considered a very reliable economic jurisdiction, and anticipated elections are not poised to affect either the economic and legal system or the treatment of foreign investment. Renewable energy opportunities are also expected to grow, as legislation in Chile requires that at least 5% of electricity used come from renewable energy. Colombia's trend is to foster free markets and private participation; there is little concern over nationalisation, and the country has a stable legal framework as the government forges new relationships with Central American and Caribbean markets. One of the largest foreign investment destinations of the US in Latin America takes place in Colombia. These factors provide momentum for approval of the US–Colombia Free Trade Agreement but there are still some hurdles within the US Congress expected to be cleared in 2010. Mexico's growth areas include merger and acquisition activity, project finance and infrastructure development, with asset prices creating excellent investment targets and business opportunities for private equity funds or for investors in general. Peru expects strong economic growth in 2010, making it one of the region's most sustainable economies–aided by a banking system that is one of the most solid in the world. "The exchange of information and opinion among Forum participants offered a unique and valuable portrait of the entire region, " Vittor concluded. "All the ideas shared confirm that, among the growth regions of the world, there are few that present greater opportunities than Central and South America. "

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