Latin America braces for energy crises, U.S. pain

By Fiona Ortiz

BUENOS AIRES (Reuters) - From Chile to Brazil to Mexico, Latin America is enjoying the benefits of a commodities boom that has pushed prices of soy, steel, copper and oil to record levels.

But with energy scarcities threatening parts of South America and a recession looming in the United States, investors and businesses are bracing this year for internal and external shocks.

A recent diplomatic crisis in the Andes and farm protests in Argentina paralyzing soy exports show that the region is still politically risky, but governments have bulked up currency reserves and slashed foreign debt, making them resilient to problems from abroad.

"The crisis this time is not going to come from inside Latin America. This time the problems are going to come from the outside," said Antoine van Agtmael, who manages about $20 billion in equities at Emerging Markets Management in Arlington, Virginia.

How the region can weather power shortfalls and an economic downturn in top world consumer the United States will be among the top topics at the Reuters Latin American Investment Summit, which will take place in 16 Reuters offices next week.

"The key issue to track over the next year or two is how will each of these governments respond to the likelihood or the risk of energy shortfalls, be it in terms of declining oil and gas production ... or insufficient investments in power generation," said Christopher Garman, a Latin America expert at Eurasia Group, a political risk consulting firm.

More than 60 participants, including central bank governors, government ministers, and top executives of telecommunications, mining, banking and retail companies, will take part in the summit.

The economies of Latin America and the Caribbean together expanded an estimated 5.6 percent last year, enjoying their greatest growth period for three decades.