After almost 2 years of declining growth rates, Latin America’s recovery is being hampered by its poor infrastructure. Our feature on page 11 shows how other developing regions spend a significantly greater proportion of GDP on infrastructure – a gap that can only be closed by the infusion of private capital. To press home this point further, this issue highlights ambitious plans to tunnel through the Andes to better connect Argentina and Brazil with Chile and Asia. Every cent of this US$6 billion mega-project is expected to come from the pockets of private investors.
Africa hosts six of the world’s top ten fastest-growing economies, and with multiples of around eight times the initial investment, private equity firms have plenty to be excited about. We examine the challenges of doing business across a highly diverse continent. A spotlight profile on Nigeria provides further confirmation that Africa is no longer just about resources, portraying a country with a rising demand for consumer goods and services.
Europe’s recent financial troubles should not detract from the immense achievements of the EU over the past half century. South East Asia’s ASEAN Economic community (AEC) hopes to emulate this success by creating a new free trade zone comprising 10 countries and over 600 million people.
In a thought-provoking Opinion piece, Hal S. Scott, the Nomura Professor and Director of the Program on International Financial Systems at Harvard Law School, argues that shadow banking can be a major force for economic good in both mature and emerging markets, so long as it is properly regulated.