Latin leaders urge investment as crisis hits poor

Thu Oct 30, 2008 8:15pm EDT
By Catherine Bremer
SAN SALVADOR (Reuters) - Latin American leaders urged governments and companies on Thursday to keep investing in the region where the global financial crisis threatens to erase years of progress and plunge millions back into poverty.
As new liquidity lines from the IMF and the U.S. Federal Reserve aim to stabilize battered Latin American markets, presidents at an Ibero-American summit vowed to invest in social programs and infrastructure to buoy incomes in the region.
"In Brazil we are not going to halt a single government project," said President Luiz Inacio Lula da Silva.
"We cannot let this economic crisis, created by speculators who convert the economy and the financial system into a casino, stop a country making the investments it needs to make."
Mexican President Felipe Calderon said it was vital to convince foreign investors to sit tight.
"(We) need enormous flows of external investment, without which it would be impossible to finance our development," Calderon told the three-day meeting in El Salvador, which included the leaders of Spain and Portugal.
"If we don't have people investing, the region has no economic future, particularly poor countries," he said.
Latin America's economies are much better cushioned than in the past to withstand economic shocks, but a reliance on oil, commodities, U.S. demand for exports and migrant remittances means a feared global slowdown will hammer the region.
Investors have fled Latin American stocks and currencies in recent weeks as fears of a global recession and a drop in demand for commodities make emerging market assets look risky.
Latin America's biggest economic power, Brazil, says it can avoid a recession and will not need to tap a temporary financing facility offered by the International Monetary Fund this week for emerging economies with sound fundamentals.