On February 23, representatives of 32 nations in the Western hemisphere gathered in Playa del Carmen on Mexico's Yucatan Peninsula to discuss formation of a new political forum. The new organization doesn't yet have a name, but for simplicity, let's call it the Council of Latin American and Caribbean states (CLAC?). Some covering the event seized on the fact that the new forum will exclude the United States and Canada. Is this bad news for North Americans hoping for regional stability and a market-friendly Latin America? Not really.
We've learned some important things about Latin America in recent weeks. We learned that one of the most market-friendly countries in the region, Chile, is a resilient place. Despite an earthquake 500 times stronger than the one that devastated Haiti on January 12, there will be a peaceful transfer of executive power on March 11 from a president of one party to the president-elect of another. And despite the kind of breakdown in public order you'll find in any country following a catastrophe of this scale, Chile has the economic and political resources it will need to rebuild.
Profits from copper sales, which are unlikely to be affected much by the quake, provide Chile with about $16 billion in savings. Its government can also tap financial markets to finance an increase in state spending on disaster relief. The country is also blessed with some of the most efficiently run governing institutions in Latin America.
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