Financial crisis... how some South American countries may do better than expected

Six months ago when commodity prices where at record high's it seemed as if South America was entering a golden age of prosperity. Or at least that they where on track. Of course many analysts and “experts” predicted there would be trouble if prices fell back down to reality. None the less, it seemed that surging demand from Asia and the lack of investment in supply capacity throughout the 80's and 90's would be sufficient to keep the prices of various commodities up.

I was personally of the camp which believed prices had come up a bit too fast, but where no less going to stay well above what they where in the late 90's and early 2000's. In the long-run I still believe this will be the case, however the recent global financial has proved me horribly wrong in the short-term.

It does however seem that one thing has been made clear from the recent crisis. At least some of the countries in South America have become better at managing their financial systems and internal economies. Many nations saved, paid off their international debt and invested wisely. Other's didn't and will pay the price (Argentina I mean you).

Here's some recent news worth taking a look at from the past week.

Peru – MTC 2009 budget proposal exceeds $1 billion

Last week Peru's transport and communication minister Veronica Zavala presented congress with a 3.3 billion sol ($1.07) budget proposal. The money according to BNAmerica's will be allocated to various segments of the transport sector. This includes highways, roads, airports, trains and the communication sector.


Peru – Luis Valdivieso, Peru's Minister of Economy and Finances has prepared 49 investment projects aimed to cushion Peru during the financial crisis

Andina.com reports that the Minister of the Economy and finances believes these 49 projects are aimed to keep Peru growing between six and seven percent for the next year.

“We won't allow any reduction in the public spending, consistent with a growth between six and seven percent. To face a possible reduction of fiscal income due to a loss of international markets, if necessary, there is a number of projects ready to fulfill this goal,” stated Luis Valdivieso.


Uruguay confident of weathering financial crisis reports the Financial Times

Interestingly enough, little old Uruguay seems in good position to weather the financial crisis, while it's bigger neighbor, Argentina, does not. The government seems confident that Uruguay can get through this crisis, even if Argentina continues to edge towards economic upheaval, as evident by the countries recent seizure of private pension funds, the governments horrible handling of recent protests and generally scaring away international investors...