Sebastian Piñera becomes Chile's next President in March. He is pro-business & foreign investment.

2011 will be a critical presidential election year in Argentina and aspiring candidates would do well to look at neighboring Chile and Uruguay for lessons in economic transformation. Both countries have elected presidents who ran on platforms prioritizing pro-business, foreign investment solutions over government programs and additional bureaucracy. Uruguay’s new president, Jose Mujica, takes office in March and “begins an international campaign for enticing investors to the country,” according to UPI. “Mujica said Uruguay needs more investment to create a greater number of better jobs and his government would ensure the right conditions are created for investors to be drawn to the Uruguayan economy. He realized the economy could not be improved only with legislation and that investors needed to have faith in Uruguay’s economic future.” And if Uruguay stands as the emerging model, Chile on the opposite border is the veteran shining star with a solid, twenty-year track record of attracting foreign investment across industries.  Building on that success, Investor’s Business Daily says the election of pro-free market Sebastian Piñera is a symbol “that an already prospering country (is) preparing to soar.” What has been Chile’s recipe for success? It’s really quite simple says IBD: “Instead of blaming the gringos and waging class warfare in Che Guevara T-shirts, they balanced their budget and respected private property. Instead of squandering a $19 billion state windfall from soaring copper prices, they managed it. They continued free-market privatization of pensions without reflexively opposing its origins, and signed free trade pacts with any nation that asked.” If it wants to remain relevant, much less competitive in the global economy, Argentina had better get its act together and do the same.  (Full IBD editorial)

Despite a sluggish start and less new construction, 2009 finished on a positive note in Buenos Aires.

Argentina’s Reporte Inmobiliario just released the 2009 summary for real estate transactions in the City of Buenos Aires and—despite the fact that activity is at the lowest level in a decade—the overall trend for 2009 is positive. According to RI, “Compared to 2008, the total number of real estate transactions in the City of Buenos Aires (75,950) fell 21.84%, while the total area of housing units under construction declined almost 35%. In the Province of Buenos Aires, the decrease in the number of transactions (105,638) was 25%.” As the adjacent bar graph indicates, BA home buyers really pumped the brakes during the first half of 2009 with monthly sales figures falling on average 30% compared to 2008. If that trend had continued, 2009 real estate transactions in the City would have fallen to around 60,000 compared to the actual figure of 75,950. After eight long months, renewed optimism and market activity finally kicked in around September, and the year ended with the first monthly gain in real estate activity vs. 2008. In terms of units under construction, MercoPress reports “New projects totaled 1.7 million square meters (18.3MM sq. ft.), which means a 34.7% fall compared to 2008. Similarly three neighborhoods concentrate the majority of new projects, with one of them (Palermo) absorbing 11% of the total which is 200,918 square meters (2.16MM sq. ft.).” InvestBA believes the upward trajectory of sales activity will continue in the first-half of 2010 given a favorable supply/demand imbalance, the lingering mistrust of local banks and lack of sound investment alternatives. The second-half of 2010 should be less robust given the shifting landscape and growing uncertainty building up to the pivotal 2011 elections. (Full story)