Pacific Alliance Business and Investment Guide 2015-2016

First edition of Business & Investment guide of the Pacific Alliance members in English

The Pacific Alliance is a regional integration initiative signed by Chile, Colombia, Mexico and Peru, since April 28, 2011. This constitutes a willing commitment to an in-depth integration on the part of the member countries towards the free circulation of goods, services, capitals and people by facilitating trade and customs cooperation. This will drive greater growth, and create jobs, development and competitiveness in the member economies in order to foster greater prosperity, overcome the socioeconomic inequalities and promote the social inclusion of its inhabitants.

This alliance ranks as the world’s eighth economy, having been the recipient in 2013 of more than 44% of the direct foreign investment to Latin America, equivalent to close to US $ 83 billion. What is also notable in the Pacific Alliance is that the average inflation and unemployment rates estimated for 2014 at 3.8% and 6.6%, respectively, lower than the regional average. Additionally, the sustained reduction in its poverty rates over the past decade has also been remarkable.

The motivations behind the birth of the Pacific Alliance, which are also the principal factors that contribute to its development, are the interest in strengthening economic cooperation among its members. With an accumulated real Gross Domestic Product (GDP) of US $ 2,164 billion and US $ 3,572 billion measured in purchasing power parity or PPP (equal to more than 38% of the total GDP of Latin America and the Caribbean) and with a growth forecast for 2015 of 3.8%-above the average 1.7% forecast for Latin America as of February 2015- the Pacific Alliance is a highly significant mechanism, given its economic importance and open trade policy. It is also the trade complement of the large economies in the world, particularly in the Asia Pacific rim, which makes it even more attractive.

Individually, the four member countries have obtained the best investment grades throughout the region at the close of 2014, which naturally not only attracts investors and benefits their interest rates but also constitutes an endorsement of the improvements in their social and macroeconomic indicators. They also have the highest percentages of private investment, direct foreign investment and international reserves over GDP, compared with the other countries in the Latin American region.

The economic bloc is reinforced by the Latin American Integrated Market (MILA) which is the integration of the member countries’ stock exchanges, and through which the Pacific Alliance hopes to diversify, broaden and make more attractive the trade of these types of assets in all four countries. There are already 780 listed companies, which through this market have access to greater sources of financing. At the close of 2014, MILA ranks as the first market in Latin America by number of listed companies and the second in stock capitalization, with a consolidated value of more than US $ 1.1 billion.

The member countries of the Pacific Alliance share an important common vision and characteristics that make this integration mechanism possible. In the first place, they are democracies governed by the rule of law and their corresponding constitutional order. They

also share similar economic policies and have free trade agreements in force between each other. At the same time, their economies show sustained growth and dynamic markets that share the common conviction that free trade and an open-door policy to the world are the central tools for the development of their countries, the fight against poverty and for social inclusion.