Patrick’s Monday Vista #7- A Dynamic Latin AmericanBloc
Over the years Latin American has witnessed the launch of many regional organisations with mixed outcomes in terms of tangible benefits for the member countries. However, one of the newest international organisation in the region, The Pacific Alliance, has already made significant process towards achieving its stated goals of economic integration, free trade and free movement of people.
The Alliance was launched informally in Lima, Peru on the 28th April 2011 and formally constituted in Antofagasta, Chile on 6th June 2012 by the presidents of its four member states, Mexico, Colombia, Peru and Chile. Together these countries represent 37% of the GDP of the entire Latin American economy and 55% of its exports. They have a combined population of the Pacific Alliance is 215 million and if the Alliance were one single country it would be the 6th largest economy in the world.
What sets the Pacific Alliance apart from other organizations in the region is that it has adopted a dynamically positive and proactive orientation towards trade, business and the attraction of foreign investment to take advantage of the megatrends of globalization to develop and grow their economies, reduce poverty and inequality and secure their place in the global economy. Already they have constituted the largest common stock exchange in the region, the Mercado IntegradoLatinoamericano (MILA), introduced visa free travel and launched joint embassies overseas as well as making significant progress in terms of educational cooperation and export enhancement.
Other Latin American countries with business-oriented economies are in the process of joining the alliance. Costa Rica has already been approved for membership while Panama has observer-candidate status and in due course these countries will become the fifth and sixth members of the Alliance. The countries of the Pacific Alliance enjoy notably higher average growth rates when compared to other Latin American countries – Colombia +4.8%, Peru +3.6%, Mexico +2.4% and Chile +2.0% compared to Brazil +0.3% and Argentina -1.7%.
Looking to the future, there is clear that these countries represent a significant,and heretofore under-exploited,opportunity for trade and investment and they should form an integral part of the internationalization strategy of any business looking to diversify its global activities.