RISK AND REWARD IN LATIN AMERICA

The possibility of a financial collapse in Brazil has faded remarkably quickly this year. But investors should not assume that the brighter outlook for Latin America's biggest economy has been accompanied by a similar improvement in the rest of the continent. While Brazil's recession will be shorter and shallower than many believed possible four months ago, economic contraction in much of the rest of the region is now expected to be more severe. Nasty surprises, such as last week's devaluation in Colombia, now look more likely. Countries such as Chile and Colombia, whose economies are less broadly based than that of Brazil, continue to be hit by the depression in many commodity prices. And Venezuela still faces the prospect of severe recession, in spite of the recent rise in the price of oil, its main export and source of government revenue.