Looking outside of the United States for long-term investment opportunities may involve more than “regional funds” or multinational companies. Successful investing in other parts of the world will require the long-term investor to become much more familiar with the economies and credit sources in various parts of the world. For example the Inter-American Development Bank had its annual meeting in Medellin, Colombia last week.
Does the Inter-American Development Bank need to increase its lending base?
Press reports and TV out of Colombia this last week noted that a major point of discussion at the Inter-American Development Bank meeting in Medellin, Colombia is whether or not the Inter-American Development Bank 48 nation membership needs to fund the Inter-American Development Bank with more capital.
As anyone watching the news is aware nations throughout the world are pumping money into their banks and economies in general in order to keep businesses going and their people employed. However, poorer countries and regional economies are not able to do this and run the risk in these difficult economic times of severe unemployment and loss of the infrastructure provided by successful businesses.
The Inter-American Development Bank is a primary and last resort source of funding and credit in Latin America. The Inter-American Development Bank was founded after the Second World War at the request of the Organization of American States. Its roll has been to provide funding and credit for infrastructure improvements and social needs for individual nations and regional economies. In these difficult times the Inter-American Development Bank and others often provide the only source of substantial outside revenue for some Latin American companies.
The answer to the question is that the Inter-American Development Bank probably needs to ask its wealthier members to pay more so that commerce and social stability will continue until the recession starts to wane.
Long Term Investment and Inter-American Development Bank Issues
We have talked before about the fact that those with cash reserves, those selling basic necessities, and those with high cost of entry businesses are likely to do reasonable well during the recession. Those with sufficient credit to weather the storm should be included in this group. In parts of each economy only a few businesses may survive in their current form and with their current ownership. Here is where knowledge of the businesses throughout Latin America, for example, comes into play. Here is where familiarity of the sources of credit such as the Inter-American Development Bank comes into play.
Whether it is mining in the Andes or natural gas extraction in Ecuador these companies need funding which often is through local banks backed up with credit by international lending institutions in these times. A little research into who has funding for development projects and whose banks are getting reserve collateral from the likes of the Inter-American Development Bank will allow the long term investor to put his or her money in companies or regional economies that will likely survive the recession. Those who survive will then have the opportunity to expand into economic niches left by those companies that failed.
It is a temptation to only look at local and national news these days but there is and will be action elsewhere. The Internet may be a better source than the national news. Take a look at the Inter-American Development Bank web site, click the English option unless you speak Spanish, French (French Guiana), or Portuguese (Brazil) and do a little reading.