ASIAN investors have so many booming economies on their doorstep that they could be forgiven for concentrating their investments closer to home. But it could be an expensive choice. In the calendar year to the end of August, for example, Hong Kong stocks fell by 16.6 per cent in US dollar terms and stocks in Shanghai were down 20 per cent. Stocks in Brazil, by contrast, rose by 88.7 per cent. Elsewhere in that region, Argentina was up 2.2 per cent, Chile 24 per cent, Colombia 16 per cent and Peru 16.5 per cent. Falls were experienced in Mexico (3.8 per cent) and Venezuela (14 per cent). Hong Kong investors might choose to avoid Latin American stocks because of the country's economic problems. Inflation is still a serious problem in Brazil, for example. But it is important for Asian investors to shake off the idea that Latin American countries are as deeply troubled as they were in the 1980s. They are not. The International Monetary Fund (IMF) recently described two Latin American nations - Argentina and Chile - as 'star pupils' because of their progress in restructuring their economies. Fidelity Investments, which runs an Emerging Markets Fund and a Latin America Fund, cites financial deregulation, falling trade barriers and lower inflation as reasons to invest. In the 1980s, the average inflation rate in Latin America was 200 per cent, with growth of just 1.2 per cent. Excluding Brazil, where inflation is still running in double digits per month, the average inflation rate has fallen to about 40 per cent, with growth of about 4.5 per cent. According to the World Economic Forum's recently-released World Competitiveness Report, gross domestic product per capita for Latin American nations last year was US$7,760 (HK$59,700) in Argentina, $4,275 in Mexico, $2,887 in Venezuela and $1,448 in Columbia. The IMF has warned of a 'risk of overheating' in some of the emerging markets most favoured by international investors. They were not named, but the most popular recently have been Mexico, Chile, Argentina, China and India. Latin American nations, burdened by billions of dollars in debt taken from international lenders in the late 1970s and early 1980s, have largely succeeded in dealing with their debt problems. Under the Brady Plan, Latin American debtor nations have been forgiven some of their debts and have been able to convert their outstanding loans and late interest owing into securities. This has been a big factor behind the boom in trade in emerging markets debt which rose about 170 per cent last year to $1.9 trillion, according to the Emerging Markets Traders' Association. Latin American securities were responsible for about 82 per cent of the total traded, down from 90 per cent. Argentina had the most actively traded debt last year, including a $30 billion loan reduction in April. This year, it will be Brazil's turn, the nation having completed a $52 billion programme this April. At the peak of their debt problems, Latin American nations had a ratio of debt service to export revenues of 50 per cent. This has now dropped to about 35 per cent. Now that their economies are turning around, Latin American countries are once again qualifying as international borrowers. European and US banks are lending to Latin America again, despite losing billions of dollars in bad loans in the 1980s. Argentina recently unveiled the first big loan to a Latin American nation since 1982, a $500-million, 18-month loan from Credit Suisse and Chemical Bank to help it refinance foreign debt. Mexico's financial markets are surging ahead as investors begin to appreciate the restructured economy and the affect of the surge of investment and trade there after the passing of the North American Free Trade Agreement (NAFTA). All the euphoria faded with the March 23 assassination of ruling party presidential candidate Luis Donaldo Colosio, which threw financial markets into turmoil. Outgoing Mexican president Carlos Salinas de Gortari outlined the nation's new global status in a special message accompanying the World Competitiveness Report: 'We have promoted trade agreements which bring certainty and clear rules to our economic relations with the rest of the world. 'In Latin America, with the European Union, in the economic organisations of the Pacific Rim, with NAFTA, and with our recent membership in the OECD, Mexico has ratified a multilateral approach to its foreign policy and its commitment to all those instruments which contribute to higher levels of co-ordination and co-operation among nations.'