Even in Brazil, where there are in general pro-business attitudes, labor costs run about 40% above those of other developing nations because of regulatory and social policies, Aleman notes. Brazil also subsidizes energy costs for some industries, which can create economic distortions, he adds. But it has a large domestic market, which makes the country attractive to companies looking to sell there.

Latin America also remains decentralized, despite the advantage of having one predominant language. While Europe has implemented European Union policies that make it easier to manage liquidity across much of the Continent, Latin America still remains a crazy quilt of countries, currencies, political climates, regulatory environments, tax codes and banking systems. While some global banks, notably Citigroup Inc., span most of Latin America and offer similar services and technology in their branches in different countries, the countries themselves have resisted consistent policies or anything much in the way of cross-border cooperation. "Brazil now has the most sophisticated banking system in the world," says global treasury consultant Susan Hillman, a partner in the Treasury Alliance Group LLC, based in Lake Bluff, Ill. "They have brilliant financial people and cash management that is unequaled in the U.S. or Europe, but they still must deal with debit taxes that make it uneconomical to move money. You can't really invest overnight because the tax would eat up any investment income." Chile is progressive but represents a much smaller market, she notes.

While BP has a Latin American presence, it is modest. "Companies have to make decisions about where to put their resources," Novaria notes. "For us, that is not Latin America." While business infrastructure such as banking and telecommunications has improved, "you still can't take for granted" things a business executive would take for granted in the U.S., Europe and, increasingly, in parts of Asia. "If there are heavy rains in Mexico, we know we won't be getting phone calls," says Novaria.

EAST OVER SOUTH

"Asia is a high priority now for most multinationals. Latin America is less exciting," concedes Marcelo Torres-Lutz, managing director for Latin America in Citigroup's Global Transaction Services unit. However, Torres-Lutz is relatively bullish on Latin America. Most economies there are growing, especially Mexico's and Brazil's, and companies with a Latin American historical presence are experiencing healthy growth. Political instability remains a problem, but it's the smaller countries that are most vulnerable. The larger ones are "stable and on the right track," he says. Central America is benefiting from the Central America Free Trade Agreement (CAFTA), and a similar free-trade agreement between the U.S. and Chile is attracting interest among other South American countries, Torres-Lutz reports.

Because each country has its own tax and regulatory policies and currency restrictions effectively block liquidity pooling, "it doesn't make much sense to try to run a treasury center for a Latin American region," Treasury Alliance's Hillman insists. Uruguay has long offered a "Safi" as a cash-pooling device, but there have been few takers, she notes. So there's no Latin American counterpart to the treasury centers one finds in Dublin or London. "If companies try to manage treasury liquidity in Latin America from one location, they may open an office in Miami," she says. But most just manage it country by country and don't try to centralize. "They may centralize payments to Latin America, sending a payments file to a bank that makes payments on their behalf in different countries and different currencies. The big automakers do that with Citigroup. But that's technology, not treasury management," she says. Currency devaluation is a risk virtually everywhere in Latin America, so multinationals try not to keep much money there. Borrowing locally to fund operations can be difficult as well, Hillman notes.

Citi's Torres-Lutz sees more progress and opportunity. There is a growing demand for shared service centers in Latin America that may include routine treasury operations. Multinationals are also moving to put all their global accounting activity, including Latin America, on a single ERP system, he adds. There is strong demand among multinationals for all kinds of integration products that help treasurers consolidate exposures and track liquidity across borders. But Torres-Lutz agrees with Hillman that there's nothing in Latin America to compare to Dublin. "The location may depend on where the boss wants to live," he says.

While BP has a highly centralized global treasury operation built around an in-house bank, its business operations are highly decentralized, Novaria notes. Business managers in Latin America operate with a lot of autonomy, country by country, with treasury providing advice and trying to keep excess liquidity flowing to London instead of piling up in any one Latin American country. Novaria runs BP's Latin American treasury operations from suburban Chicago.

But Novaria reports that there is momentum to take a more regional approach. As evidence, he mentions the move by a few larger companies–Procter & Gamble has a center in Costa Rica–to set up regional centers. "We're taking a fresh look at building regional centers in Latin America," Novaria says. "It's a new idea for us." In the meantime, BP uses Citi as its global overlay bank, allowing the bank to do all of its customer service for Latin America from a center in Bogota, Colombia. "Wherever you are and whatever number you call in Latin America," says Novaria, "you end up talking to Bogota."