Across much of Latin America, where economies are expected to slow next year after a strong 2004, there is a sinking feeling that the world is passing the region by.

Foreign investment is near 10-year lows. Grandiose plans for a hemispheric trade deal look dead in the water. And many say the region has been politically ignored by major world powers ever since the Sept. 11, 2001, attacks.

The isolation could hamper economic growth in 2005 and for years to come unless governments act now on key areas like education, according to businessmen, officials and economists.

"We run the risk of being left behind," said Lawrence Pih, owner of Brazil's Pacifico, the largest wheat miller in Latin America. "If we don't do something to encourage investment, our economies could be lifeless for a long time to come."

Investment bank Morgan Stanley expects Latin America's economy to expand 3.4 percent next year, down from 5.1 percent growth in 2004. Governments see growth rates flat or lower in 2005 in all of the region's seven top economies -- Brazil, Mexico, Argentina, Venezuela, Colombia, Chile and Peru.

The chief external culprits are likely to be high world oil prices and reduced demand, should the U.S. economy slow down.But analysts say the biggest unknown factor in 2005 will be whether governments can finally pass measures to encourage investment -- and perhaps recapture the world's attention.

Energy-sector and tax reform in Mexico, a revision of bankruptcy laws in Brazil and the conclusion of Argentina's debt restructuring have all been pending for months or years.

"Everybody knows what needs to be done to become relevant again, but they can't seem to make it happen," said Alberto Bernal, chief Latin American economist for IDEAglobal, a Wall Street think-tank."It's not that hard. So what's the deal? Sometimes I think these governments just don't get it."

(From Reuters, October 21, 2004)

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