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A place in the sun remains elusive

The economies of Latin America have for differing reasons been severely affected by global economic slowdown. Argentina has to face mounting debt tangles as well as crippling deflation and Brazil faces similar problems. Mexico’s success story looks as if it will pick up again but for the moment has been interrupted by the US slowdown. Remarkably, though, the region’s equity markets have so far ridden out the crisis.

De la Rua (front) and Cavallo

What a difference a year - and a global crisis - make. A year ago Mexico was basking in the warmth of a special relationship with a friendly new US president. There was talk of relaxing controls on Latin Americans entering the US. The world economy looked pretty robust and the IMF held out the promise of a way to avert an Argentine default.

Since then, Washington has abruptly refocused on the Atlantic relationship with traditional allies such as the UK, US border controls are stricter than ever and Latin Americans in New York are pondering the possibility that they might be more secure back home. The global economy has weakened dramatically. And Argentina can't pay its debts.

The collapse of investment banking business in the region is testament to the downturn. Between January and October, Morgan Stanley managed a meagre $4 billion-worth of merger and acquisition deals there, compared with $24.3

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