Up until three years ago Brazil was the vacuum cleaner of the region. It was the ‘B’ in Brics, it had very high interest rates and was growing at about 5%,” says Mario Bergara, Uruguay’s economy and finance minister. “From 2011 they have stopped growing at that rate, and interest rates went down from about 12% to 7% and some of the capital that had previously been going to Brazil started to look around at neighbouring countries. There was a significant change for us in terms of capital inflows from that point.”
Uruguay is not the only country benefitting from a new era of international investment in Latin America.
“I couldn’t agree more,” says Mauricio Cardénas, Colombia’s minister of finance, to the hypothesis put to him that international investors are increasingly differentiating between Latin American countries.
The trend has been evolving slowly but steadily over recent years and the near-end to the US’s policy of quantitative easing has begun to see liquidity in the region pooling into the safer buckets of risk.
