Latin America investment climate uncertain due to presidential elections, bankers say | VailDaily.com
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Latin America investment climate uncertain due to presidential elections, bankers say

BELO HORIZONTE, Brazil – Presidential elections in seven Latin American countries this year have investors jittery over prospects that new leaders might undermine the region’s economic gains, leading international bankers said Tuesday.”There are political, market and economic concerns with the upcoming elections,” said William R. Rhodes, president and chief executive officer of Citigroup Inc.’s Citibank NA banking unit, to reporters at the Inter-American Development Bank’s annual meeting.Rhodes and Roberto Setubal, chairman of Brazil’s Banco Itau SA, said most governments in the region have adopted prudent fiscal policies, allowing economies to flourish amid an overall political tilt to the left.But they said investors should be cautious ahead of elections this year in Brazil, Colombia, Ecuador, Mexico, Nicaragua, Peru and Venezuela.While most presidential candidates appear to support orthodox monetary policies aimed at slow, sustainable growth and lower inflation, changes in fiscal policy could send investors fleeing to safer markets, Rhodes and Setubal said.”We’re sort of putting out a notice here that there’s been a lot of progress here and we want to continue to see it,” Rhodes said.Rising interest rates in the United States and Europe also might lure away investors who had sought higher rates in emerging markets.In sessions focusing on individual economies, Colombian and Uruguayan officials reported their nations are seeing solid growth with low rates of inflation and unemployment.Colombia “is seeing a clear recovery” from a 2000-2003 recession, said the country’s Finance Minister Alberto Carrasquilla. “The growth is quite robust.”Uruguayan Finance Minister Danilo Astori said his country is experiencing an export boom after a financial crisis from 2001 to 2003 that was largely a spillover from troubles in its much larger neighbors, Argentina and Brazil. Uruguay is on track to grow 5 percent this year, Astori said.The streets of Belo Horizonte were calm Tuesday after violent protests during the event’s opening on Monday seriously injured a police officer and three demonstrators.About 300 protesters opposed to the bank’s loans for big infrastructure projects and privatizations gathered at a city plaza Tuesday morning miles from the site of the IDB meeting in a vast convention center, but there were no reports of conflicts.Bolivian President Evo Morales returned home after calling for the bank to forgive his nation’s $1.6 billion IDB debt. A proposed debt-relief package that will be considered this year by the bank would also favor Guyana, Haiti, Honduras and Nicaragua.But Latin America’s two biggest powerhouses – Brazil and Mexico – are balking at supporting the U.S.-backed write-off unless rich nations foot the bill.”The proposal should be paid for dollar by dollar by the countries that have put it forward,” said Mexican Finance Minister Francisco Gil Diaz.The bank is owned by its member countries, mainly from the Western Hemisphere, but also including European nations, plus Japan, Israel and South Korea.Delegates at the IDB meeting are discussing how to improve the region’s crumbling infrastructure, boost economies, promote regional integration and improve living standards in a region where governments have largely failed to eliminate a deep economic divide between a rich elite and masses of poor.Vail, Colorado


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