Narayan AmmachchiThe economies of the Pacific Alliance are growing like never before, thanks to an endless demand for mineral resources around the world. According to a report in Mercopress, the Alliance – comprised of Chile, Peru, Colombia and Mexico – accounted for more than 50% of foreign trade in Latin America in 2012.
Last year, they imported goods worth $551 billion and earned $556 billion in exports, with mineral and energy sources contributing greatly to this sudden spurt in foreign trade. The Pacific Alliance countries also accounted for 26% of all foreign direct investment that flowed into Latin America last year, Mercopress reported.
While some countries are benefiting from a huge number of free trade agreements, others, like Mexico, are seeing their economic reforms yield high dividends. Chile has trade agreements with over sixty countries, while Colombia and Mexico have agreements with 30 and 40 countries respectively.
Though the global economy grew by an average of just 3.2% last year, the Alliance members reported more than 5% growth. Furthermore, their gross domestic product (GDP) made up about 35% of the region’s total output.
Latin America and the Caribbean set a record in foreign direct investment (FDI) last year (6.7% more than in 2011), despite international conditions characterized by shrinking FDI flows worldwide.
Chile, for example, received more than $9 billion in FDI in the first quarter of this year, an increase of 87% from the $4.87 billion received in the previous three months. Moreover, more than five billions dollars flowed into the country in March, the highest monthly foreign investment in the past 16 months, according to the Central Bank.
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