Conference Presentation, Panel
Latin America: A New Era of Opportunity | Global Conference 2025
Milken InstituteCarlos Diaz-Rosillo, Cate Ambrose, Iván Duque Márquez, Ilan Goldfajn, Guillermo Lasso
- Latin America and the Caribbean are projected to assume a more prominent role under the current U.S. administration, necessitating a rebuilt relationship to counter Chinese financing in non-dollar currencies and increased Middle East strategic spending regarding food security.
- The U.S. is expected to actively pursue nearshoring through integrated value chains, leverage free trade agreements to create jobs, and utilize the Development Finance Corporation to compete with China using equity tools to crowd in private capital.
- Regional security faces threats from democratic setbacks in Cuba, Venezuela, and Nicaragua, including fears of organized crime exports via the Tren de Aragua, prompting the Inter-American Development Bank to launch a security and development alliance with 20 countries and Interpol.
- Trade patterns are shifting toward China as the primary partner for 90% of Western Hemisphere countries, while intra-regional trade requires a rapid increase from 20% to above 40% to diversify markets and mitigate uncertainty from global trade wars.
- Private sector leadership is anticipated to drive future growth due to budget constraints, with $15.4 billion in private capital already invested in infrastructure in 2024 and trends expected to grow through asset auctions in Brazil and Colombia.
- Critical investment opportunities are identified in critical minerals, food security, nature swaps, renewable energy expansion, and the voluntary carbon market, alongside specific funding for conservation such as the Galapagos debt swap.
- The region is expected to face significant disruption from the AI revolution, with all coding and back-office software production potentially automated within a year, posing a threat of decades-long catch-up costs and massive job losses for programmers if adaptation does not occur.
- Infrastructure development is forecast to consume 25% of global investment over the next five years, including projects like the Bogota metro and Panama investments, while Ecuador aims to develop nearly 27,000 megawatts of energy capacity to address blackouts.
- Specific national outlooks anticipate Argentina aligning with the Trump administration, while the Dominican Republic, Uruguay, Ecuador, Panama, and Costa Rica are positioned as top pro-business performers; Chile is expected to see opportunities under potential leadership changes, and Colombia may return to good fiscal policy.
- Economic and social trends include a tripling of the gray economy population over 65 in the next decade creating healthcare opportunities, the creative economy becoming Colombia's fastest-growing sector, and a continued tourism boom in Colombia exceeding 6 million visitors annually.
- Brazil is expected to remain a fintech innovation leader with the Pix system and high-valuation companies, while natural resource sectors including forestry and reforestation are seeing multi-billion dollar fundraising efforts.
- Latin American leaders are urged to work together on regulation and road systems to build scale, alongside implementing tax and security policy reforms, to prevent the erosion of U.S. confidence caused by Belt and Road Initiative agreements.