WHY LATIN AMERICA Latin America in the world map… | … North America seems to be larger,
Source: Worldmapper © Copyright SASI Group (University of Sheffield) and Mark Newman (University of Michigan). Income per capita in the region is similar to the world average.
More than 300 million of latinamericans have acquired a middle class standard with an approximate income of USD$ 20.000 per year. This represent from 50% to 60% of the regional population. (Our Time, Raul Rivera, p. 135) World Poverty
Source: Worldmapper © Copyright SASI Group (University of Sheffield) and Mark Newman (University of Michigan). The region has important hydrological resources. Colombia is positioned as the first country with more water resources per km2
Source: Worldmapper © Copyright SASI Group (University of Sheffield) and Mark Newman (University of Michigan). The region has the most important biological production capacity
Bio-Capacity: crops, plain, forest and fishing.
Source: Worldmapper © Copyright SASI Group (University of Sheffield) and Mark Newman (University of Michigan). GDP 2011 (USD Billions)
Brazil 2,518
Mexico 1,185
Argentina 435
Colombia 321
Venezuela 310
Chile 243
Peru 168
Ecuador 65 Colombia´s GPD growth vs the Wolrd´s GPD 2002 - 2011
GPD growth: Colombia vs. World (%) 8
6.9 6.7 5.9 6 5.3 4.7 3.9 4 4 3.5
2.5 1.7 2
0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-2
-4
**Colombian growth Jan-Jun 2012: 4.9% CIVETS: an opportunity for diversification
Colombia Indonesia Vietnam Egypt Turkey South Africa
CIVE TS CIVETS economies will have important GPD growth Leaders in the wolrd - Michael Geoghegan, market Global M&A Heat Chart
Based on mergermarket companies for sale intelligence:
*US million.
*Merger Market. M&A Round-up for 2012 Global M&A Overview
*Merger Market. M&A Round-up for 2012 Global M&A Overview
*Merger Market. M&A Round-up for 2012 Global M&A Overview
Private Equity Buyouts
Asia-Pacific (excl Japan) saw US$ 27.9bn-worth of buyout deals, sliding 28.9% on 2011 (US$ 39.3bn). 2012 was the second highest year for buyouts in the region since 2007 (US$ 49bn).
*Merger Market. M&A Round-up for 2012 Latin American M&A Overview
América Móvil (Mexico) acquires Carso Global Telecom SAB (99.4%). Deal value: US$ 28 billion.
Telefónica SA acquires Brasilcel NV (50% stake). Deal value: US$ 9 billion.
*Merger Market. Latam M&A Round-up for 2012 Latin American M&A Overview
*Merger Market. Latam M&A Round-up for 2012 Latin American M&A Overview Industry Analysis
2010 2011 2012
Latin American M&A Sector Breakdown 2010 Deal Value
Latin American M&A Sector Breakdown 2010 Deal Count
*Merger Market. Latam M&A Round-up for 2012 M&A in the Pacific Alliance
Colombia M&A Europe Chile M&A Europe M&A US M&A US
*ISI Emerging Markets M&A in the Pacific Alliance
Mexico M&A Europe Peru M&A Europe M&A US M&A US
*ISI Emerging Markets Foreign Investment Pacific Alliance
Mexico Mexico 2010: US$ -623 million 2010: US$ 478 million 2011: US$ 80 million 2011: US$ 0 2012: US$ -1.6 million 2012: US$ 0
Colombia
Colombia 2010: US$ 279 million 2011: US$ 3,877 million 2012: US$ 0 Peru 2010: US$ 10.7 million 2011: US$ 19 million 2012: US$ 120 million Peru 2010: US$ 57 million Chile 2010: US$ 20 million 2011: US$ 15 million 2011: US$ 650 million 2012: US$ 224 million 2012: US$ 3,074 million
*www.banrep.com * Foreign Investment Committee. Foreign Investment Pacific Alliance
Mexico Colombia 2010: US$ 464 million 2010: US$ 13 million Mexico 2011: US$ 464 million 2011: US$ 205 million 2012: US$ 476 million 2012: US$ 12 million
Colombia 2010: US$ 1,048 million 2011: US$ 1,057 million Peru 2012: US$ 1,093 million 2010: US$ 1.7 million Peru 2011: US$ 0.3 million 2012: US$ 3 million Chile 2010: US$ 1,347 million 2011: US$ 1,381 million Chile 2012: US$ 1,389 million 2010: US$ 73 million 2011: US$ 55 million 2012: US$ 28 million
* www.economia.gob.mx *www.proinversion.gob.pe Multi-Latins in the Pacific Alliance
*ISI Emerging Markets Banks
Mexico Colombia
Peru
00 Chile
*ISI Emerging Markets Mila News
Market Total Total Currents Capitalization Volume Issuers Mila Intermediaries in Mila Negotiated March 2013 To report operations Markets Markets through Mila infrastructure. March 2013 (US March 2013 Million) (Us Million)
*Mila News. April 2013. Ease on doing business
Rank on the ease of doing business
In the rank that qualifies country as policy makers, Chile stands at 37, Peru at 43, Colombia at 45 and Mexico stands at 48.
*Doing Business 2013. IFC. Starting a new business
Chile Colombia Mexico Peru Has reduced Starting a Requires 6 Requires 5 the time business procedures, 9 procedures, 26 required from requires 7 days and costs days and costs 60 days to 14, procedures, 8 10.1% of 10.6% of the cost from days and costs income per income per 28% of income 4.5% of income capita. capita. per capita to per capita. 8% and procedures from 19 to 9
*Doing Business 2013. IFC. Protecting investors
How strong are investor protections?
Colombia and Peru have a high score indicating stronger protections. Chile stands in the rank 32 and Mexico in the rank 49.
*Doing Business 2013. IFC. Business-friendly regulation
Chile, Peru, Colombia and Mexico are in the top 5 ranking of Latin American countries on the ease of doing business that measures the economies with the most business- friendly regulation.
*Doing Business 2013. IFC. Page 3. Ease of paying taxes
Globally, Chile stands at 36, Peru at 85, Colombia at 99 and Mexico at 107 in the ranking of 185 economies on the ease of paying taxes.
*Doing Business 2013. IFC. Regulatory practices “In 2007 Colombia’s government further institutionalized its commitment to regulatory reform by establishing the Private Council for Competitiveness. The council is made up of business associations and private sector players working closely with the government to promote sound, business friendly regulatory practices”. Peru and Mexico have advanced in regulatory practice as well.
*Doing Business 2013. IFC. Page 27. Regulatory practices Colombia has achieved considerable success in improving business regulation since 2005, along countries such as Georgia, Rwanda, China and Poland. Peru stands at 32 and Mexico at 39 in the global ranking
*Doing Business 2013. IFC. Page 9. Colombia: key principles for foreign investment
Automatic Universality Nature
Equal Stability treatment
Principles
*Doing Business 2013. Chile: key principles for foreign investment
An efficient Important and high level network of of free trade connectivity agreements
The legal Political and transparency Economic and stability Stability for foreign investment Principles
*Foreign Investment Committee Chile Mexico: key principles for foreign investment
Network of Competitive free trade labor costs agreements
Business Large friendly logistics environment platform Principles
*www.promexico.com Peru: key principles for foreign investment
Right to private Right to engage property; in the economic protection against activity of their takings preference
Non-discrimination Freedom of based on the State’s business or ownership of a industry corporation’s equity
Equal legal Freedom of treatment (same foreign and local rights as Peruvian Principles trade investors)
*www.proinversion.gob.pe Colombia: Free Trade Agreements
Colombia has 19 agreements with 59 countries
• Free Trade Agreements
EFTA • • Signed and waiting to Canada • European Union formalize • • Korea • Turkey • In negotiation, • Japan Israel • concluded but not signed. • United States
Cuba Mexico • • Honduras Guatemala • • • •Caribbean Community El Salvador • • Panama Pacific Costa Rica Alliance • Venezuela Ecuador • Can Peru • Bolivia • •Mercosur Chile •
*Foreign Trade Ministry Chile: Free Trade Agreements Chile has 20 agreements with 56 countries
• Free Trade Agreements • Association Agreements Canada • EFTA • • Bilateral Trade • European Union • Korea Agreements • Turkey • Japan • Partial Trade Agreement • United States China • • In negotiation, concluded but not India • Mexico • • signed. • Thailand Central America • Malaysia • Panama • Colombia Pacific • Venezuela Alliance Ecuador • Australia Peru • • Bolivia • • Mercosur P4 •
*Foreign Investment Committee Chile Mexico: Free Trade Agreements Mexico has *49 agreements with 44 countries. • Free Trade Agreements
• Signed and waiting to EFTA • formalize Canada • Canada (APEC) (TPP) • European Union • In negotiation, concluded but • Korea not signed. • Japan United States (TPP) Israel •
• China
• Cuba • Vietnam (TPP) Belize Guatemala • • •Honduras El Salvador Brunei (TPP) (APEC) • •Nicaragua Malaysia (TPP) • • Costa Rica • • Panama Singapore (TPP)• Pacific • Colombia Alliance •Brazil Ecuador • • Paraguay Peru (TPP)• Australia (TPP) Bolivia• •Mercosur Chile(TPP)• New Zealand (TPP)
*(12 FTAs, 28 promotion agreements
• Signed and waiting to • Russia (APEC) EFTA • formalize South Korea Canada (APEC) (TPP) • European Union • In negotiation, • (APEC) concluded but • • Japan not signed. (APEC) • United States (APEC) Mexico (TPP) • China (APEC) (APEC) Cuba (TPP) • • Thailand (APEC) • • Vietnam (TPP) (APEC) • • Philippines (APEC) Guatemala • Honduras Malaysia (TPP) (APEC) • • • • El Salvador Brunei (TPP) (APEC) • •Panama Singapore (TPP) (APEC) • Costa Rica • • Papua New • Colombia Indonesia (APEC) Pacific • Venezuela Guinea (APEC) Alliance Ecuador • Australia (TPP) • Peru (TPP) (APEC) • (APEC) Bolivia • •Mercosur Chile • (TPP) New Zealand (TPP) (APEC) •
TPP: transpacific agreement APEC: Forum Asia-Pacific Economic Cooperation *World Trade Organization Pacific Alliance The four countries account more than: 209 million of inhabitants. Mexico They represent: 35% of Latin American GDP.
Colombia They produce: 2.7% of world GDP. Peru
They generate: 50% of the Latin American Chile commerce.
They produce more than: 49% of region exports.
*Eltiempo.com Pacific Alliance
•The Pacific Alliance is a union of four countries (Colombia, Mexico, Chile, and Peru) that have coastlines on the Pacific What is the Ocean and which have joined forces to enable them to act as PA? a bloc on issues of trade and investment and to ensure full freedom of movement of goods, services, capital, and people.
•This new bloc will mean a breakthrough in the economic Why is it integration of Latin America, and it will be the opportunity to significant? realize the commercial potential of the Member economies.
•This initiative is intended to address the need to expand and diversify the political and economic relations of the region as a What is the whole. It aims to deepen trade relations between the member purpose? countries, followed by those with Asia-Pacific, which is a region that shows great commercial, economic, and political dynamics.
*Mincomercio.gov.co (Colombian Minister of Trade, Industry, and Tourism Sergio Diaz Granados) Pacific Alliance
•The initiative covers the following topics: the movement of businessmen and workers and the facilitation of immigration, What are the including police cooperation; trade and integration; aspects topics of such as trade facilitation and customs cooperation; services integration? and capital, which aim to integrate the stock exchanges; cooperation, and the establishment of dispute settlement mechanisms.
•One of the issues proposed in this large integration project is the freedom of capital markets and the integration of stock What are the exchanges. This point has caught the attention of foreign benefits for investors and has sparked the desire of companies in each investment? country, in respect to accessing a group of homogeneous markets in terms of macroeconomic policy.
•Colombia will present a draft text covering the disciplines of What is the investment and services. In light of this proposal, the Member proposed countries will determine the need and desirability of agenda for negotiating an agreement on these matters. There are also services and plans for the iniciation of sessions of the Joint Committee on capital? Services and Investment so as to identify barriers to investment in the countries of the Alliance.
*Mincomercio.gov.co (Colombian Minister of Trade, Industry, and Tourism Sergio Diaz Granados) Foreign investment in Latin America
Countries of the Caribbean and Central America received FDI in excess of 5% of GDP. Among the medium-sized and large economies, inward FDI in Chile accounted for as much as 7% of GDP, followed by Uruguay at 5%. For the largest economies in the region, FDI accounted for a far smaller proportion: Mexico and Argentina received flows equivalent to less than 2% of GDP.
*Economic Commission for Latin America and the Caribbean. Foreign investment in Latin America
In 2011, FDI flows to the other economies of South America rose 33%, to US$ 54.658 billion
*Economic Commission for Latin America and the Caribbean.
Foreign investment in the Pacific Alliance million
The Direct Foreign $
Investment in Colombia, US Peru, Chile and Mexico represent approximately 40% of total FDI in the
region.
million
$ US
*CEPAL 2012 Foreign investment in the Pacific Alliance
Direct Foreign Investment has a similar destination in Colombia, Chile and Mexico, although in the latter the manufacturing sector has a more relevant role in the FDI. In Peru the main sectors are mining, finance and communications.
*CEPAL 2012 *¨Proinversion.gob.pe Inflation rate in the Pacific Alliance
The inflation rate in the Pacific Alliance has decreased progressively during the last 11 years.
*World Economic outlook
Imports US Million dollars CIF US Million
*Dane.com *aduana.cl *economia.gob.mx *bcrp.gob.pe
Exports US Million dollars CIF US Million
*Dane.com *aduana.cl *economia.gob.mx *bcrp.gob.pe Colombia: Investment opportunities
The National Government started the program The Fourth Generation (4G) of Road Concessions in Colombia. The goal is to achieve 3% of GDP in 2014 (US$10 billion).
Law 1508 (Public Private Partnerships), which The two industries with the introduces a new mechanism highest growth (related to for introducing private the GDP) were mining and investments in infrastructure quarries (8.5%) and projects, was approved in construction (18.4%) January of 2012.
*DANE REPORT. Second quarter of 2012. - *National Infrastructure Agency (ANI). Colombia: investment opportunities
The most relevant benefits of Law 1508 (Public Private Partnerships).
• Private initiatives can propose and structure projects. 1
• This law encourages the participation of institutional and financial investors. 2
• Private equity funds can participate in infrastructure projects through a special 3 regulation (1508 of 2012).
*National Planning Department (DNP). Colombia: investment opportunities
Currently there is no exact data about all the private public partnerships, but the National Planning Department has reports of some of the projects presented. These are some of the industries with approved projects.
Roads (23) Railways (7)
Construction (3) • Early childhood care. • Prisons Airports (5) • Urban Renovation
*National Planning Department (DNP). Chile: investment opportunities
Energy Infrastructure
Agribusiness Mining
*Foreign Investment Committee Chile Chile: investment opportunities
Agribusiness is one of the country’s most important sectors accounting for 12% of Chile’s GDP and 24% of exports in 2010.
Chile is one of only five places in the world, with a Mediterranean climate. This type of climate facilitates production of foods such as olive oil, wine, fruit and vegetables that are in line with an international trend towards healthy eating.
*Foreign Investment Committee Chile Mexico: investment opportunities
Gold and IT Services Metals
Energy Infrastructure
*JP Morgan Mexico: investment opportunities
Location of significant gold and base metals drill results
Latin America remained the most popular exploration destination, attracting 25% of global spending in 2011, with six countries— Mexico, Chile, Peru, Brazil, Colombia, and Argentina — accounting for the lion’s share of the region’s total, boosted by strong growth in gold exploration in Mexico.
*Metals Economics Group Mexico: investment opportunities
Service Providing Projects Public-private partnerships can take on different modalities. In Concessions Mexico, the following have been already implemented through different projects: Asset Exploitation
*Promexico Peru: investment opportunities
Electricity Industrial
Mining Infrastructure
*www.proinversion.gob.pe www.proinversion.gob.pe
Peru: investment opportunities
*www.proinversion.gob.pe International Law Firms in the Pacific Alliance
*Latin Lawyer Top 5 deals of 2012 by value
Deal US$ Firms Deal US$ Firms
*Latin Lawyer. Table Leagues 2012. Top positions regionwide
By volume By value
*Latin Lawyer. Table Leagues 2012. Top positions regionwide
Regional deal spread
*Latin Lawyer. Table Leagues 2012. Top positions regionwide
Regional sector spread
*Latin Lawyer. Table Leagues 2012.