S&P recently released a report on Latin America emerging from the globalrecession in better economic shape than most analysts had expected with theregion looking set to return to positive GDP growth in 2010. Countries in bothCentral America and South America showed greater economic resilience during theglobal downturn compared with their experience during earlier global recessions.No regional sovereign defaulted in 2009 and recent years of moderate fiscalpolicy, better monetary policy, and generally improved social conditions haveset the stage for continued growth in the coming years, barring an unexpectedexternal shock.

The global financial crisis and economic downturn have sparked a backlashagainst pro-market policies in many countries. But a notable and perhaps ironicexception is Latin America, a region once almost synonymous with anti-marketpopulism. Most Latin American countries have been pursuing pragmatic,market-friendly economic policies in recent years, including tradeliberalisation, privatisation, openness to foreign investment, financial marketdevelopment, and cautious fiscal and monetary policy to avoid large deficits andhigh inflation. Amongst rated sovereigns in the region, only Venezuela, Ecuador,Bolivia, and Argentina have been following a clearly different set of economicpolicies in recent years. Neither group of countries, the first encompassing thebulk of the region and the second group of four, has reoriented its economicpolicies since the global recession began.