These governments answer fundamental rules prevailing in wealthy countries, which leads to verbal histrionics and volunteerism. The challenge of economic laws, has led these countries to seek curb inflationary pressures through repeatedly failed, price controls. Even has done, as in the case of Argentina, believe the government, in its effectiveness, to the point of distorting official statistics when the results did not confirm their beliefs. The populism of these countries resulting in unexpected changes in the rules of the game, creating a very bad business environment. Paradoxically, these countries have large development needs infrastructure they need private capital to satisfy, as in the case of Argentina in the energy field.

According to Cisneros: That takes long-term investment and no one invests in highly unpredictable places. Not that populism is the problem that scares investors, but is the continuous change in the rules of the game derived from the excessive power of governments thus undermining investment. But the problem is not so bad if only affect foreign investment, since at least the local investment would partly offset the lack of foreign capital. Current populist governments undermine investment in general, not only local but also foreign because they produce a context of unpredictability and instability. I even dare to say that these populist governments, to create some instability in the region, undermine in part, against the flow of investment to other countries in the region.

I imagine an investor who wants to settle in the constant bickering generated primarily from Venezuela, may be a factor that undermines the investment decision at the possibility that tensions from turning into a major problem. If you intended to make a preliminary assessment of Latin American countries, I dare to say that have demonstrated the complete failure of populist policies and the success of policies more friendly to the market. And in the medium term, is likely to prove unsustainable populist policies. Is that they are demonstrating their inability amid a context of international economic boom in their economies, creating problems of inflation, price distortions, disincentives for investment and, ultimately, increase in poverty (though not show their indicators).

If governments are to reduce poverty, should understand that the best way is through a stable and predictable macroeconomic environment, friendly to investment, which ultimately is the factor that generates sustainable employment. So you can create a virtuous circle between investment and growth to decrease poverty levels in Latin American countries.