It was a dramatic 2010 for Chile. A devastating earthquake – registering an 8.8 on the Richter scale (for purposes of comparison, the earthquake that caused such widespread destruction in Haiti measured 7.2) – killed more than 500 people and left the government with a clean-up bill in excess of $30bn. “We lost 16% of our [economic] output in three minutes,” says finance minister Felipe Larrain.


But in the latter half of the year, Chileans, and a mesmerised global audience, cheered the rescue of 33 miners trapped after a shaft explosion. The coverage also did Chile’s global reputation no harm as it showed the country to be both competent and clever in the way it went about the risky rescue operation. The government intends to capitalise on its moment in the spotlight while stressing that support is still needed for the post-earthquake reconstruction effort.

“There is a lot of business [to do] related to the re-construction effort and many companies in construction want to participate in the re-construction of the country," says Mr Larrain.

For its part, the government says it is making continued enhancements to an investment environment already considered one of Latin America’s safest and focusing on areas where it can compete while not trying to be all things to all investors. “We are working heavily on issues such as education and job training to get our workforce trained and capable of doing jobs – this is important as we have an 8.3% unemployment rate,” says Mr Larrain.  

“We understand our internal market. We are not Brazil. We are a country of 17 million people, a $200bn economy, maybe a little more with the exchange rate appreciating… But we are a serious country and we have by far the best ranked institutions in Latin America. People that go to Chile know what to expect.”


Colombia’s minister of finance and public credit, Juan Carlos Echeverry, is very conscious that his country does not enjoy such a glowing global brand and is still playing catch up with regional rivals after finally emerging from decades of conflict.

“We are starting with a promising situation in at least two ways. First, we will have a boom in commodities, in the production of oil, coal and gold. We want to save a big part of this boom in a sovereign wealth fund,” he says. “The second growth story is based on sectors that have been lagging, such as agri-business. In the past 20 years all big Latin American countries have had a big boom in agri-business – Brazil in exports, Chile in wine, for example. The only big economy in Latin America that has not had a big boom is Colombia, [and this is] due to war – now the country is under rule of law, 80% of our land is back to business and now we can design agri-business.”

He cites this sector, along with housing (there is a need for 1.5 million new units) and mining, as central to Colombia achieving the 6% annual GDP growth needed for the next decade to help the country catch up with more successful neighbours. “We have a growth story that is solid and a fiscal and mining boom story that are solid,” he says.

The administration of which he is a part, ushered in with the election earlier in 2010 of president Juan Manuel Santos – himself a former minister of finance – is, Mr Echeverry insists, “pro-business, pro-markets, pro-employment and pro-growth”, which will “have sound management of the economy, orthodox fiscal management and monetary management and independence”. Yet, he adds: “We have to play the game and we are only in the first five minutes.”


Mexico, meanwhile, is in danger of being branded the new version of the bad old Colombia, thanks to a spate of high-profile gangland killings and an increasingly deadly drug war. But finance minister Ernesto Cordero urges a calm focus on the big picture, which includes a fundamentally sound investment environment.  

“Mexico is facing a problem that has been growing for the past two years and now we are facing it with an absolute clarity and transparency and we are taking the correct decisions. The problem is happening in very particular parts of the country and does not reflect the reality of the whole country,” he says.

“Mexico, overall, is still a good destination for investment – the markets will tell you that. We have just been able to issue a bond for 100 years for the Mexican economy at a very good rate – 6.1%. FDI keeps flowing to Mexico. We have been able to generate more than 700, 000 jobs from January to September this year. Mexico keeps being a very attractive place for investment.”

Not only that, Mexico has gained from a structural perspective in terms of competitiveness, especially as an exporter, Mr Cordero says. “We are definitely a very, very strong country with respect to our capacity to do exports and are very comfortable with how Mexico is performing in that regard.

"Because of all the very important investment in public infrastructure that we have been doing in the past – highways, port, airports – now we are in a better position to take advantage of our geographical location. Mexico is really now beginning to be a logistics platform for exports,” he says. 

“Also, I think that it should be expected there is a convergence in the wages in the manufacturing sectors all over the world so the competitive advantage that China has in the past is vanishing right now. If you consider in the past three years, the Mexican peso [has been] depreciating in real terms with respect to the currencies of our competitors – China and Brazil – and that provides us with an important impulse for exports.”


The attractiveness of Peru’s FDI offering lies in the basis of its constitution, according to minister of economy and finance Ismael Benavides Ferreyros. 

“The Peruvian constitution allows for equal treatment for local domestic and foreign investment and for free movement of goods and currency. That is the underpinning of everything. The equal treatment is also present in the laws that regulate each sector, be it mining, fishing [or other industries]. The other aspects are free financial markets, with no restrictions for movement of funds in and out of the country. It’s open – maybe the most open system in South America, probably more so than even Chile,” he says.

“The other thing is the free-trade agreements we have been signing with a number of countries, which allow for investment protection between them, and a number of covenants relating to investment between [these countries] and Peru and vice versa – the US, the EU, China and so on. We have also investment protection treaties and we are active in [removing] double tax for companies investing in Peru.”

Companies that are particularly welcome to make use of these advantages are those in key sectors which are underdeveloped and ripe for more foreign investment than they currently receive – and at the top of the list is mining. “Peru is a big mining country with lots of iron ore deposits, and we were only exploiting 10% to 12% of our potential,” says Mr Ferreyros. “We are the world’s largest silver producer and sixth largest gold producer and one of the biggest copper producers. There’s big potential there, as well as in gas and other related businesses such as petro chemicals and generation of hydro-electricity. Water and sewage treatment concessions: that’s also quite active. We have $2.5bn of new concessions in the pipeline for 2011.”

Trinidad and Tobago

Like many finance ministries worldwide, Trinidad and Tobago’s has been busy putting out fires since the onset of the global recession. But finance minister Winston Dookeran was happy to report while at the IMF-World Bank meetings that his country's government’s policies “have put the macro situation back on track”.

“We have been facing a fiscal challenge but we are containing it and our macro indicators are very solid at this point in time,” he says.  

While shoring up the public finances, Trinidad and Tobago's government is also embarking on a programme to be in a better position to tempt foreign capital in by improving the country’s performance in the World Bank’s Ease of Doing Business index. “We have been talking to the international finance corporations to work with us on a very detailed programme of action to remove a lot of obstacles that are in the way of business investment – not only foreign business investments but local business investments,” says Mr Dookeran. One top priority for reform is the customs procedures, which were identified as a major inhibitor for doing business in Trinidad and Tobago.

Few key tenants of the country's economy appear have been untouched by the reform drives, with the finance minister expanding upon the list which includes new measures for improving exploration of oil and gas, new tax measures and a widening of the range of investment that can be sourced from pension funds as well as a liberalisation of free-zone laws.

But Mr Dookeran adds that he knows good legislation will only get a country so far in a highly competitive global FDI market. So he will go, as he says, “knocking on the doors of all those who might be interested” in investing: “We take the view that policy alone is not sufficient in today’s world and that you have really got to go into the boardrooms.”