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Sunday 21 of July 2024

Pacific Alliance Finance Ministers Eye Financial Integration


Mexico's President Enrique Pena Nieto, Peru's President Ollanta Humala, Chile's President Michelle Bachelet and Colombia's President Juan Manuel Santos attend a business summit at the XI Summit of the Pacific Alliance in Frutillar, Chile,photo: Reuters/Cristóbal Saavedra
Mexico's President Enrique Pena Nieto, Peru's President Ollanta Humala, Chile's President Michelle Bachelet and Colombia's President Juan Manuel Santos attend a business summit at the XI Summit of the Pacific Alliance in Frutillar, Chile,photo: Reuters/Cristóbal Saavedra
Mexico's President Enrique Peña Nieto joined other leaders in discussing investment and infrastructure

FRUTILLAR, Chile — The Pacific Alliance trade bloc must improve integration of financial systems to spur investment in key areas such as infrastructure, finance ministers from the four member nations said on Thursday.

The group, composed of Colombia, Mexico, Chile, and Peru, has already reached several accords in areas such as free commerce and immigration rules. But at a summit in the scenic Chilean towns of Frutillar and Puerto Varas, financial leaders stressed that significant opportunities for integration remained.

“The alliance has advanced in commercial agreements, in migratory and diplomatic agreements, but a fundamental step for the bloc and one which has enormous value, that we can bring about, is financial integration,” Colombian Finance Minister Mauricio Cardenas said in a speech to the conference.

Chile's president Michelle Bachelet, Mexico's President Enrique Pena Nieto and Costa Rica's President Luis Guillermo Solis during an official visit to a local fair as part of XI Summit of the Pacific Alliance in Puerto Varas, Chile June 30, 2016. Ximena Navarro/Courtesy of Chilean Presidency/Handout via Reuters ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY.
Chile’s president Michelle Bachelet, Mexico’s President Enrique Pena Nieto and Costa Rica’s President Luis Guillermo Solis during an official visit to a local fair as part of XI Summit of the Pacific Alliance in Puerto Varas Photo: Courtesy of Chilean Presidency via Reuters

The ministers said that among the key goals would be to allow pension funds from the countries in the bloc to be able to make a broader range of investments in each other’s economies.

Investments in infrastructure, the ministers said, would stand to gain from such an arrangement.

One solution would be to allow pension funds to invest in other countries as if their investments had originated in those countries, thus lowering regulatory burdens, the ministers said.

“We have a paradox in which traditional investments are giving low returns and on the other hand there is considerable liquidity, and we have infrastructure projects that should give out greater returns,” said Mexican Treasury and Public Finance (SHCP) Undersecretary Fernando Aportela Rodríguez.

Pension funds in the Pacific Alliance have about $404 billion in investments. According to the Interamerican Development Bank, Latin America should increase infrastructure spending by 2 to 4 percent of annual gross domestic product in the coming decades.

In addition to the four member nations, 49 observer states were also present in southern Chile for the talks, which end on Friday.