Paradoxically, these countries possess large infrastructure development needs what they need private capital to meet him, as it is the case of Argentina in the energy sector. According to Cisneros: This requires long-term investment and nobody invests in highly unpredictable places. Isn’t that populism is the problem that scares away investors, but is a continuous change in the rules of game derived from the excess of power of Governments which undermines investment. But the problem would not be so serious if only it will affect foreign investment, since at least, local investment would partly offset the lack of external capital. The current populist governments undermine investment in general, not only foreign but also local since produce a context of unpredictability and instability. Even, I would encourage to say that these populist governments, generating a certain instability in the region, in part, undermine investment flows to the rest of the countries of the region. I imagine an investor who wants to installed in Colombia surely the constant fights generated mainly from Venezuela, can be an element that violates the decision to invest given the possibility that tensions are transformed into one bigger problem. If one intended to make a preliminary assessment of the Latin American countries, it would encourage me to say that they have shown the resounding failure of populist policies and the success of friendlier policies with the market.
And in the medium term, it is likely that demonstrate the unsustainability of populist policies. It is that they are demonstrating their inability to amid a context of international bonanza for their economies, generating inflationary problems, price distortions, discourage investment, and lately, increased poverty (although not its indicators show it). If the Governments aim to reduce poverty, they must understand that the best way is through a macroeconomic framework stable and predictable, friendly to investment, which in the long run is the generator factor of sustainable employment. Thus, you can generate a virtuous circle between investment and growth that lowers the levels of poverty in Latin American countries.