Department of Foreign Affairs and Trade

Regions’ GDPs Similar, LA Per Capita Income Higher 

0

200

400

600

800

1 000

1 200

US

$ b

illio

ns

0

2 000

4 000

6 000

8 000

10 000

12 000

US

$

GDP (LHS) GDP per capita (RHS)

Average Income = US$2 986 Average Income = US$5 393

Australian Trade and FDI with East Asia Dominates Latin America, 2000

0

20000

40000

60000

80000

100000

120000

East Asia Latin America

Trade FDI

Can Latin American Trade Ever Challenge East Asian ?

DistanceDistance

Trade AgreementsTrade Agreements

Commodity ExportersCommodity Exporters

-5

0

5

10

15

20

China Philippines Thailand Rep. Korea Malaysia Indonesia Argentina Mexico Chile Brazil

Per c

ent

Exports to Latin America Growing Faster than to East Asia, 1990-2000 

Brazil

• Inflation beaten• Deficit low • FDI open, strong inflows• Trade opening• Privatisation succeeding• Flexible exchange rate• Growth increasing• Contagion, power threats

• NAFTA driving growth and reform• Fundamentals good • FDI open • Growth high• Infrastructure, banks weak• US downturn a threat

Mexico

Chile

• FDI and trade very open• Sound macro policy• Flexible labour markets• High transparency• Strong banking system• Privatisation success• Highest growth in LA

Argentina

• Inflation beaten• FDI open• Trade opening• Rigid exchange rate• Fiscal deficit problem• 3 year recession • Good long term prospects

Business Environment ?Business Environment ?

improving, Chile leads

labour markets still rigid

banking systems weak

transparency still poor

Business Opportunities ?Business Opportunities ?

Commodities

Niche manufactures

Services, tourism,

education

Investment, mining, agribusiness