Courtesy of The Financial Times, commentary that Latin America is going to outperform all other emerging markets over the next 10 years, including Asia.  As the article notes:

“…It seems like a crazy suggestion: Brazil may be hot, and Mexico slowly warming up, but how on earth can the likes of Argentina or Venezuela compare to India or South Korea? And yet, judging by a show of hands at an investors’ conference in London this week, the notion may have something to it.

For one, economies with high savings rates and a large manufactured exports base are no guarantee of sustained success: just look at Germany.

“Brazil has a more sustainable economy than China as it’s driven by domestic demand,” claimed Maya Bhandari, head of emerging markets research at Lombard Street Research, at a LatinFinance conference. “Brazil also has fewer structural imbalances, while China’s export-driven model may not be sustainable.”

Certainly, Latin America does not obviously suffer from any of the credit excesses emerging elsewhere. Partly as a result of past debt crises, credit penetration as a percentage of GDP remains very low. Contrast that restraint with the unfettered lending spree, say, of China’s state owned banks.

On that narrow point alone: “If you don’t have potatoes, you can’t get potato blight,” as Jerome Booth, head of research at Ashmore Investment Management put it.

On productivity, Latin America is clearly something of a laggard. Yet here too there may be countervailing factors.

“In China, you can build a new road in only a year. In Latin America, because of its democratic process, it can take several,” said Hans Schulz, head of the Inter-American Development Bank’s corporate and structured finance department.

“But because Latin America is democratic, that also mean that when that a new road is built, it’s a safer bet.”

Hmm. For anyone who has bumped their way along some of Brazil’s 1.5m km of unpaved road, that argument is not entirely convincing.

Still, when it comes to geopolitical concerns, South American wins hands down.

In the western hemisphere, there are no rogue nuclear powers, nothing equivalent to the North Korean stand-off, or the China-Taiwan dispute, the religious uncertainty of Indonesia, let alone the troubles in Thailand. Frictions between Colombia and Venezuela are a mere plaything by comparison.

“We asked the same question at a New York conference about South America outperforming Asia,” Christopher Garnett, president of LatinFinance remarked. “There was only one person in the audience who changed their mind after the debate.”

In London, closer to Asia but further away from South America, a more bullish mood prevailed. As with all polls, there may have been a sampling error.”