SINGAPORE - Latin America offers great opportunities for foreign businesses despite the economic volatility that has gripped the region, Deputy Prime Minister Tharman Shanmugaratnam said.
Speaking at the Latin Asia Business Forum on Friday (Oct 16), Mr Tharman noted that periods of macroeconomic uncertainties are also periods when opportunities can be found at micro-level.
His comments come as major markets in Latin America such as Brazil are stuck in weak growth and political turmoil. Brazil's credit rating was downgraded by Fitch Ratings to just a notch above junk status this week, amid corruption scandals and financing issues revolving President Dilma Rousseff.
The Latin American economy is also in recession with the International Monetary Fund forecasting a 0.3 per cent contraction in the region this year.
But Mr Tharman noted that the vibrancy of businesses and capabilities on the ground remains intact despite the macro-issues, urging investors and governments from both Latin America and Asia to further deepen bilateral linkages.
Agreeing, chief executive of the Development Bank of Latin America Enrique Garcia, who also spoke at the forum, added that the perception towards Brazil has been overly negative, and the country is certain to ride out the current storm.
Both speakers however stressed the need for Latin American governments to press on with reforms, whuch was also a priority in Asia, to lay the fundamentals in infrastructure and human capital needed for future growth. Mr Tharman added that greater regulatory certainties are will also help attract more businesses.
The bilateral trade between Singapore and Latin America as a whole grew at a compound annual rate of 7.8 per cent from 2009 to reach $32.1 billion last year, according to data provided by International Enterprise Singapore, which organised the forum.
During the event, IE Singapore and the Development Bank of Latin American signed a memorandum of understanding to promote closer collaboration in urban infrastructure planning and development.
IE Singapore chief executive Teo Eng Cheong said: "Singapore companies who have made successful inroads into Latin America are in for the long haul and often offer niche and differentiated product and services."
One such company is infrastructure consulting firm Surbana Jurong. Its chief executive Wong Heang Fine said the company is currently involved in township and industrial park planning in countries including Ecuador and Brazil.
With the need for better infrastructures and urban solutions growing across Latin America, Surbana Jurong expects more opportunities in the region, Mr Wong added.