The North and South American economy is dominated by the world’s largest economy, the United States of America, however these other countries are also growing rapidly. This growth can be attributed to the huge natural resource base in the Americas, coupled with ethnical diversity and human capital. One common aspect in the Latin countries is their production of narcotics for export to the United States of America. This however, encourages crime which eventually impedes with business and politics. Latin America attracts huge bond investments due to the high interest rates but also suffer the risk of currency problems due to instability. The region boosts an energetic population, growing middle class, relatively low debt and dynamic economic expansion.
Major countries making up this region include Chile, Mexico, Colombia and Peru. Chile which is ruled by a republican type of government specializes in the fishing, mining and wine industries. The economy of Chile suffered greatly after the 1973 military coup but has since stabilized though the tension still remains between the government and military The earthquake that rocked the country in 2010 damaged cities and copper mines setting back the industry a great deal, but the government was well equipped to deal with disaster providing relief aid to the needy and rebuild. Colombia’s economy is based on agriculture, metals, petroleum and textiles. Political turmoil has been a huge challenge to its economic growth. This has however been boosted by the new constitution which helped stabilize the political scene, though drug trafficking and warring between two political sects remains. Colombia is rich in natural resources, hence presenting plenty of opportunities and budding growth, despite the huge risk associated.
Mexico, on the other hand, is a federal republic majoring in food and beverages, iron and steel production and motor vehicle production. Given its political stability, strong economic growth, having the USA as its main trading cohort, and the fact that it joined the North American Free Trade Agreement with the United States and Canada, it is astonishing that Mexico is still an emerging economy. This can be attributed to drug dealings and corruption, obscuring the growth of legitimate businesses and discouraging tourism. Finally Peru which is run by a constitutional government majors in fishing, textiles and mining. The country faces huge growth impediments. Nevertheless, it is in a pole position to grow as result of its rich resource base, transport infrastructure, water sources and energy production.
Colombia and Peru have shown incredibly fast growth as a result of stability of their currencies, they have also got their inflation rates under control and their credit ratings are also strong. Brazil, Chile and Mexico enjoy strong diversified trade, vibrant securities market, as well as, better credit ratings. Nevertheless, these countries no longer reveal the basic nature of ‘emerging markets’.
In addition, Colombia and Peru are currently the most preferred prospects by investors surveying the region. However, their prospects are accompanied by numerous risks. Both economies were greatly boosted by the commodities boom in the past decade. Potential fall in metal and energy prices facing the global market are a major risk to the two economies. Nonetheless, the countries are anchored on strong economic pillars that can withstand an economic slump. Particularly, Peru’s success is grounded on privatization of public corporations and elimination of investment barriers.