La Paz, Bolivia
After nearly three years of discussions, the five members of South America's Andean Pact have collectively decided to lay out the welcome mat to foreign investors. On May 13 in Quito, Ecuador, the trade ministers of the five countries - Venezuela, Colombia, Ecuador, Peru, and Bolivia - signed an agreement gutting Decision 24, the legal instrument that has stringently controlled foreign investment during the organization's 18 years.
Despite the gesture, however, businessmen say the countries should expect little new foreign investment, indicating they prefer to invest their money in nations with fewer economic and political problems.
They point out that none of the countries have been successful in their efforts to woo investors over the past several years.
``With investors facing severe economic and political instability, the Andean countries can't expect the changes to bring a flood of foreign investment,'' says a Western diplomat.
``Besides, Mexico and the Far East offer far better investment opportunities.''
The Andean countries must also compete against China, India, Canada, and others that have recently offered incentives to foreign investors.
Symbolically, at least, the new agreement represents a big change. Since the Andean Pact's founding in 1970, the five countries had espoused a ``Yankee Go Home'' sentiment that has helped slow foreign investment to a trickle. But they have changed their tune in the hopes that foreign capital will help reactivate their slumping economies.
``We need the jobs and technology foreign investment brings,'' said Pedro Luis Echeverria, one of the three members of the Andean Pact's governing board.
``Foreign investment is better than foreign debt,'' said Manuel Azp'urua, Venezuela's finance minister, in a comment echoed by officials of other Andean countries.
The accord will allow each country to establish its own regulations for foreign investors, instead of having one set of rules as Decision 24 required.