Latin America Data Watch: The region‘s investment moment

Research evidence excerpt

Latin America Data Watch: The region‘s investment moment

mented and prospective capital commit- of law and restrictions on private ownership of projects—par-

ments across the four economies could approach US$250- ticularly in the energy sector—are also likely to weigh on pri-

300bn over the next decade, heavily concentrated in mining, vate-sector participation.

hydrocarbons, and related energy infrastructure. Argentina

Brazil occupies a somewhat different position within this

and Chile appear to offer the most credible near-term upside.

regional narrative. Unlike its neighbors, the country is not

In both cases, the key reforms have already cleared their prin-

entering a new reform cycle from a low base. Much of its

cipal legislative hurdles and are supported by documented,

structural adjustment has already taken place over the past

project-level investment pipelines. Argentina's investment

decade, including labor-market reform, financial-sector mod-

story is increasingly shifting from stabilization toward execu-

ernization, and the 2019 pension overhaul. In our view, these

tion, as a large stock of announced projects in mining, energy,

measures contributed to the economy's repeated growth out-

and infrastructure moves closer to deployment. Chile com-

performance over recent years, improving resource allocation,

bines one of the world's most attractive copper-related invest-

deepening financial intermediation, and helping establish a

ment opportunities with reforms specifically designed to

higher supply-side baseline than many observers had assumed

address the permitting and regulatory bottlenecks that have

prior to the reform cycle. More recently, however, reform

historically constrained project implementation. Peru's min-