Fears of a renewed global recession, coupled with concerns about public debt in Europe, forced down Latin American markets on Aug. 18. The most important market in the region, Brazil's BM&FBOVESPA (Bolsa de Valores, Mercadorias & Futuros de São Paulo), fell 3.52 % for the day, while in Argentina the MERVAL index plunged 4.11%. In Mexico City the Bolsa Mexicana de Valores (BMV) was down 2.36%; the IGBC index in Colombia fell by 3.15% and Chile's IPSA by 1.89%.

There were reports of "pessimism" among regional leaders. Latin American economies have generally performed better than the European and US economies after the financial crisis of 2008, but there is concern about the region's transnational companies, the "traslatinas." "These companies are the ones that depend the most on the global economy, because of the importance of exports," economist Alexandre Póvoa wrote in the Brazilian economic review Exame.

While in Chile on Aug. 18 as part of a visit that also included Argentina, Colombian president Juan Manuel Santos proposed to the United Nations Economic Commission for Latin American and the Caribbean (CEPAL) that the group should organize a summit meeting of regional finance ministers and central bank presidents. "How can we Latin Americans, sitting here with more than $700 billion in reserves, act so as not be passive spectators, as if indifferent [to the crisis]?" he asked. On Aug. 20, after his return to Colombia, Santos emphasized the importance of regional integration. "All this requires us as a region to strengthen our relations, so that whatever happens we can be better protected." (DPA, Aug. 19, via Vanguardia, Coahuila, Mexico; EFE, Aug. 20, via Que.es, Spain)

Colombia is the US's closest ally in South America, and Santos' right-wing government has been pushing hard for a free trade agreement (FTA) with the US. Until now the leftist or left-leaning governments in South America have been the ones promoting regional integration, while Colombia and Mexico, the other major US ally, have been more focused on trade with the US.

"Mexico would be one of the countries most directly affected" by a renewed recession in the US, due its high level of economic integration with the larger country, the US-based rating agency Moody's Investors Service reported on Aug. 18. The group had predicted a 4% growth rate for Mexico this year and 3.9% for 2012. Although it didn't expect major changes for the rest of 2011, Moody's revised its prediction for Mexico next year down to 2.5%. Business leaders confirmed that they were "interested in" although not yet "worried about" the growth rate. (La Jornada, Mexico, Aug. 19, Aug. 20) The Mexican economy experienced a 6.1% contraction in 2009 during the earlier world economic crisis.

From Weekly News Update on the Americas, August 21.

See our last posts on the global crash and the Latin America's alternative integration .