Investment opportunities in Latin America's frontier markets (Cuba, Peru, Dominican Republic, Colombia and Central America) are proliferating, but remain distinctly less well understood, whereas in Mexico and Brazil, the engine rooms of regional growth, opportunities are starting to diminish as incumbents - both domestic and international - entrench their market share. Against this backdrop, BMI's clients are reassessing their Latin America growth strategies, whether based on organic expansion or acquisition. The Business Outlook for Latin America's Frontier Markets 2008 argues that, as your competitors gear up to the new era, it is imperative to start focussing now on the opportunities (and risks) in other high growth markets where the competitive environment is less challenging.

The Business Outlook for Latin America's Frontier Markets 2008 provides essential risk analysis and market forecasts for these high growth 'Frontier Markets'. It highlights the opportunities available for investors looking to exploit the domestic market, where growth rates will remain well in excess of more developed states. Crucially, the report also evaluates the key trade offs that investors must make between the strong opportunities available and the political risks that continue to dog the region. Life 'beyond Castro' is not the only opportunity available as companies evaluate the strategic positioning - both geographically and economically - of many newly-emerging states.

Why Frontier Markets?

• Strong macroeconomic growth - which translates into high earnings potential for domestic companies and investors
• Rapid economic development - will means huge opportunities for capital investment across all sectors servicing local economy - utilities, communications, transport, industry
• Diversification hedge - these states offer unique opportunities to exploit opportunities in states where growth dynamics do not correlate with more established states
• 'Last decade costs' - low labour costs in contrast to more developed states will confer competitive advantage to those able to unlock the potential

Why you need to order this report today:

Strategists - Scope out the commercial opportunities available within Latin America's smaller markets, and, more importantly, the synergies available to your company's core regional strategy via diversification, cost reduction and new market acquisition.

Risk Managers - Develop a broader understanding of the risk/reward trade-off for both your existing business model and more innovative growth strategies via a more holistic view of the Latin American market.

New Business Managers - Assess the relevance of your current portfolio of products/services for these rapidly-growing markets where those that offer greater differentiation stand to benefit most.

Financial Planners - Critically evaluate the assumptions underpinning your medium-term financial forecasts by incorporating BMI's economic assumptions of Frontier Latin American states into your projections.

Extracts from The Business Outlook for Latin America's Frontier Markets 2008

Diversification benefits
While the performance of Frontier Markets is linked to the global economy, organic growth drivers - especially within commodity producing states - are more significant. The result is that while there are country-specific risks, investment and trade with these states offers a hedging strategy against falling performance elsewhere.

Immunity from the US downturn
It used to be said that the states of Latin America would catch pneumonia if the US sneezed. No more. Certainly, economic linkages to the US are vital. However, high levels of foreign reserves, floating exchange rates and strong fiscal accounts will enable many – not least Peru and Colombia – to withstand the US downturn. Furthermore, smaller commodity producing states are now more exposed to China – where growth will remain close to 10% annually - than they are to the US in this rapidly globalising region.

Policy risks remain
While the rewards are significant, so are the risks. Political risk - in terms of uncertainty, and the predictability of anti-market stances by senior regional politicians - are a key danger for investors. The risks posed by populists in El Salvador, Honduras, Panama and Costa Rica are high, although upside potential remains in the region; indeed we assess the possibility that the 45-year trade embargo on Cuba will be lifted.

Infrastructure bottlenecks constrain even greater potential
While rapid expansion is the hallmark of many Frontier States, we believe that the growth potential of many has yet to be fully realised. For example, growth in Panama has strong upside potential as construction investment – in areas other than the expansion of the canal – will boost re-exporting opportunities in the 'Dubai of Latin America'.