UNASUR Allays Fears

Finance ministers and other high ranking officials from the Union of South American Nations (UNASUR) trading group of South American nations announced August 5th that the group is attempting to build confidence ahead of any possible apparent crisis. Luis Miguel Castila, the Peruvian Finance Minister stated that the group’s meeting Friday should bolster investor’s confidence. and that countries in the groups are managing their economies well, and are trying to increase integration in order to confront any global economic challenges. “I think that it is a signal that should provide confidence to the rest of the world among a scenario [sic] of uncertainty,” the finance minister stated stated.

The meeting comes during a week of sharp declines in Latin American stock exchanges due to foreign concerns about the health of the U.S. and European economies. The biggest drops occurred on Thursday as the Lima Stock Exchange’s broad General Index ended 5.56% lower, Colombia’s Colcap index dropping 3.04%, Chile’s blue-chip Ipsa index falling 3.9%, and Brazil’s Bovespa stock index plummeting 4.9%. This was in direct correlation to deep hits in the U.S. financial markets. Castilla stated that Peru will be relatively untouched in the event of economic crises originating in Europe or the U.S. “We have very strong fundamentals,” he said, echoing “famous last words” of financiers everywhere. In recent years, Peru’s economy has been growing at tremendous rates. In 2010, the country’s GDP grew by an impressive 8.8% and it is expected to grow by about 6.5% this year. This economic miracle was due in no small part to foreign direct investment, and partnership in UNASUR. Castilla added that Peru is seeking further integration with all of Latin America. “What we want is a deep integration with the entire region, not only South America but also looking at other important partners like Mexico and countries in Central America and the Caribbean,” he said.

The officials from UNASUR will meet again Aug. 12 in Argentina. The purpose of the meeting is to discuss new methods of cooperation and integration. “We have regional trade that is important, but it is something that we have to deepen … in order to not be affected by a crisis abroad,” Argentinian Economy Minister Amado Boudou said. UNASUR is a political alliance made up of every nation in South America except French Guiana.

Posted by Mary Hoffman on Aug 6 2011. Filed under Global Finance, Headlines. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry