Doing Business in Central and South America

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Doing Business in Central and South America

• Berkeley City College
• Fall 2007
• Instructor Marino

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Geographic Orientation

• 15 of the worlds land area
• gt300 million people
• South America
• Central America
• Principal markets Brazil, Argentina, Chile

http//www.ilike2learn.com/ilike2learn/Caribbean.h
tml http//www.ilike2learn.com/ilike2learn/Sameric
a.html
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City Population in LA
http//siteresources.worldbank.org/DATASTATISTICS/
Resources/lac_wdi.pdf
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Economic Risk Analysis
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Latin Americas Economic Timeline

• 1492-1950 Government Regulated Markets,
  Colonialism and Its Institutional Legacy
• 1930s-1980 Import-substitution industrialization
  (ISI)
• 1981-1992 The Lost Decade, debt crisis, and the
  tequila effect
• 1992- Present Commitment to open markets, free
  trade, and free capital flows

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Forces Shaping The Business System Today

• Dollarization
• Privatization
• Convergence of common and civil law in the tax
  arena
• Decreased corruption
• Regionalism

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Economic Growth

• Pulling out of stagnation
• In 2004, economies grew at an average rate of
  5.9, the fastest rate since 1981
• Reduction of foreign debt
• Tame inflation
• Demand from China and India increased prices for
  Latin America's commodity exports
• Low interest rates in rich countries push
  investors to seek rewards in emerging markets
• Poverty dragging growth

Source The Economist. Improving on the Latin
Rate of Growth, May 26th, 06.
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Private Investment in Infrastructure
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Leading Economic Indicators
Source Population and GDP data - International
Monetary Fund, World Economics Outlook Database,
April 007 (denotes estimate)
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Rise of Regionalism in Latin America
Source The Economist, Oct. 4, 07. Commerce
Between Friends and Foes.
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Brazil in Focus

• Most populous and industrialized
• Democratic
• Language Portuguese
• Cachaca
• 55 of Latin Americas GDP
• Strong FDI growth

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Argentina

• 2nd largest country in South America
• Highly literate population
• Tango, wine, beef, and Borges
• Last economic crisis in 2002 fixed exchange
  rate abandoned
• Strong exports, mainly to Brazil

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Chile

• Role model for economic reform
• Exports 40 of GDP
• Fine wines
• FDI in mining and utilities

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Colombia

• Bogotas crime rate is low compared to other
  world capitals
• 2nd most populous country
• Oil, coal, and coffee
• Recovering economy
• US main trading partner
• Gabriel Garcia Marquez

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Costa Rica

• Vacation paradise
• Large expat community
• English is widely understood
• Most democratic

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Problems of Doing Business in the Region