October
10, 2004
From
La Pampa to the Orinoco river
(El País) - "During
the nineties, the perception of risk in
Latin American countries benefited from
prudent macroeconomic policies, which
made Spanish firms perceive the area as
their natural expansion market. In 2001
the crisis of Argentina and, to a lesser
extent, the exhaustion of privatizations,
provoked a reduction of 21% in direct
Spanish investments in Latin American.
(…)
In 2004, Latin America
has given good signals of recovery and
its main economies have shown a positive
path, obtaining its fundamental impulse
from external elements. The under valuation
of currencies, the global recuperation
and the revalorization of raw materials
have been the starting point for the
growth phase, which has translated into
internal demand. (…)
It is always dangerous
to generalise, especially in the Latin
American region, where every country
has different socio-economic and political
contexts. For this reason, the situations
in Argentina and Venezuela are peculiar.
(…)
The common point is constituted
by the fact that both economies have
seen a major recession. However, the
causal elements of the crisis are deeply
different. On one side they were of
economic nature (the suspension of debts
payments and the devaluation of the
currency in the case of Argentina),
while on the other side they were essentially
political (serious political confrontation
in the Venezuelan case).
The relations with
international markets have gone through
difficult moments, but in Venezuela
the current situation is perceived in
a much more positive way by international
investors. The premium for Country Risk
has fallen to its lowest point since
1998, and now the rate is the same as
Brazil (450 basic points of differential
with the United States reference). The
referendum against Chávez has
helped this perception as well as the
rise in oil prices has contributed to
improve the solvency of public finances
(…)".
