Latin America Rising

Move over, Venezuela, Argentina and Brazil. Mercosur and Andean: there’s a new kid on the block:

Amid all the bad news in the region, the presidents of Chile, Colombia, Mexico, and Peru met with little fanfare in Cartagena last week to seal an economic pact launched in 2012. They call their project the Pacific Alliance, and it will soon include Costa Rica and possibly several other countries. The four founding members are the most successful economies in Latin America; they boast the region’s highest economic-growth rates and lowest inflation rates. Together, they represent 36 percent of the region’s economy, 50 percent of its international trade, and 41 percent of all incoming foreign investment. If the Alliance were a country, it would be the world’s eighth-largest economy and seventh-largest exporter. Its members lead the lists of the most competitive economies in Latin America and those where it’s easiest to do business. Given that trade among the four countries is currently a mere 4 percent of their total trade, the potential to expand trade and investment flows is huge.

This is not only good news for these countries. It may well help reverse the direction of economic policy in Venezuela.

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