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Sunday, October 30, 2011

Global economic difficulties could ripple to Latin America

Speakers at Friday’s Latin Trade Symposium were optimistic about the region’s prospects but said the difficult global economy could cloud the outlook
Despite a favorable jolt to stock markets when the Euro Zone bailout was expanded, the financial crisis is likely to persist and could have a ripple effect in Latin America, speakers said Friday at a Latin Trade conference.

Latin America, helped by China’s huge appetite for commodities, weathered the 2009 global recession far better than many analysts expected, and many Latin leaders say this time around the region is better prepared for a global slowdown.

But the keynote speaker at the Latin Trade Symposium held at Miami’s Four Seasons Hotel said despite brisk growth in a number of South American economies, the global outlook is still uncertain and demand from China could slow. The conference and the Bravo Business Awards were organized by Latin Trade magazine.

“I think Latin American should not lull itself into security because it made it through the last crisis,” there will be little impact if European problems spread, said Mark Malloch-Brown, a former British minister of state and the chairman of the global affairs practice at FTI Consulting.

“This time China is significantly more vulnerable” said Malloch-Brown. “It’s a much more tricky and difficult global situation.”

The European Union struck a deal Thursday to stem economic turmoil in Europe,. But Malloch-Brown said, “The deal is temporary. Within a matter of months, I suspect we’ll have another euro crisis.”

President Leonel Fernández of the Dominican Republic said that not all Latin America shared equally in the boomlet of the past few years. “Our region in recent times has been divided in two — above Panama and below Panama,” he said. Countries to the south whose economies are more linked to China and other Asian countries have fared better.

Fernández said that in recent years countries such as the Dominican Republic have suffered from the spiraling prices of imported oil and food commodities. He pointed out that from 2006 to 2008 alone the price of rice rose 127 percent; wheat, 136 percent; corn, 125 percent; and soybeans, 107 percent.

He cited various reasons for the run-up in food and oil prices, but said speculation in commodities futures markets is a major culprit. The Dominican Republic has presented a UN resolution aimed at reducing price volatility and financial speculation on commodities, Fernández said.

Fernández received a BRAVO lifetime achievement award later Friday, joining an elite group of regional business executives who also were honored.

Despite the challenges, speakers said opportunities still abound in Latin America. “As I travel abroad, it seems like the entire world is fascinated by Latin America,” said Alvaro Diago, the InterContinental Hotels chief operating officer for Latin American and the Caribbean.

                                                                                                                        Miami herald news

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