by Florent Michel, Managing Partner, Latina Finance & Co
Managing treasury and financing operations in Latin America remains more complicated than in many other places in the world. This is mainly due to cumbersome financial regulations, tax burden and lack of regional integration. On the South American continent, however, three countries offer a friendlier environment than others for treasurers to manage cash, liquidity, foreign exchange risks and cross-border transactions. They are Chile, Peru and Uruguay.
Those three countries are at very different stages of development. Chile is clearly one apart with its AA rating and its OECD membership (Chile and Mexico are the only Latam members). As a result of more budgetary discipline, a boom in commodities exports and very strong foreign direct investments, Peru for its part has registered an unprecedented growth in the last four years, making it a true economic miracle. Finally Uruguay, recovering from the 2001 Argentinean crisis, even if still dependent on its neighbour, is managing a strong economic growth with great pragmatism. Chile, Peru and Uruguay will have registered 6% growth in 2011.