. . . But Its Economic Role In Latin America Deepens (cf.: Spain Shifts Priorities to Europe)

ANTONIO SANCHEZ BUSTAMANTE works much harder now than when he arrived at the Spanish Embassy here five years ago. Then, a visit from a trade mission was a rarity, with only six of them in 1987.

But by late November last year, the Embassy had already had 20 such visits, the diplomat says in an interview, "not even counting companies who come on their own account, plus more than 300 individual businessmen." There is so much to do, Mr. Sanchez says, that he works most weekends.

Five centuries after the Spanish first sought the gold and silver of the Americas, Spain and the emerging economies of Latin America are creating new business ties. Building on their common history, language, and culture, they are jointly reaping the synergetic fruits of economic reforms carried out in the last decade.

To be sure, Latin America represents but a small portion of Spain's recent push into the global economy. In 1990, for example, Spain's exports to fellow European Community members were 65 percent of the total (about $60 billion), while Latin America accounted for 4.5 percent.

But from the Latin American perspective, Spain is gaining in importance. In Chile today, Spain is the No. 2 foreign investor, second to the United States.

Socimer, a Spanish merchant bank, is just one of a legion of Iberian businesses that have recently begun or expanded Latin American operations. "Our deals in Latin America will total $3 billion this year. Last year, we did half as much," says Eric Heyl, a Chilean who is the managing director of Socimer's Brazilian office.

Present in the region's markets only since 1984, Socimer has been especially active in privatization deals in Venezuela, Mexico, and Chile. Mr. Heyl says Spain's experience selling off state-owned enterprises, developing capital markets, and encouraging expanded company ownership has come in handy in Latin America.

Until recently, Spanish businessmen thought of foreign markets as places to sell goods exceeding domestic demand. But as the country's economy grew in the 1980s, foreign business took on a more attractive cast. At the same time, countries such as Chile, Mexico, Argentina, Colombia, and Venezuela were removing old barriers to trade and foreign investment.

The Spanish government, in the form of state-managed companies such as Telefonica de Espana (the phone company) and Iberia (the airline) led the way, participating in Latin American privatizations. "Spain reached the conclusion that foreign investment was very important for the economy, to diversify risks and to consolidate export positions," says Sanchez, Spain's commercial counselor in Santiago.

Bilateral business has so far centered on telecommunications, transportation, and finance. Direct Spanish investment in the region has been growing rapidly, from $198 million in 1989 to $419 million in 1990, and had already reached $619 million as of July last year.

Trade has also been stepping up steadily with combined Spanish exports to, and imports from, the region totaling $4.3 billion in 1988, $5 billion in 1989, and $6 billion last year. Trade for 1991 had already reached $4.7 billion by August.

The government also spurred greater exchange by negotiating trade agreements with seven Latin American countries (and is negotiating treaties with Brazil and Peru) totaling more than $5 billion in trade finance. The Chilean agreement signed in 1991, for example, consists of $2 billion in Spanish export finance credits and planned investment. It aims to foster economic development and joint ventures.

The potential of emerging markets in Latin America, Spain's new prosperity, and perhaps the magic of the Columbus quincentennary have also contributed to new ideas to bring the former colonies and mother country together. At least two groups are working to set up satellite communications networks that would transmit information to a mega-market consisting of more than 320 million Spanish-speakers. One group, consisting of five Latin American nations plus Spain, proposes a non-profit educational televisio n channel.

The new ties arise partly from deep-rooted emotion in Spain. "One has suffered, lived through, cried for all that Latin America has been through.... I have seen so many colleagues tell of a grievous panorama," said Domingo Docampo, an electrical engineer, referring to the region's long economic difficulties.

During a recent meeting in Brazil of an Ibero-American consortium to exchange and develop state-of-the-art technology, Dr. Docampo said he wants to pass on some of his country's success. "When I was seven or eight years old, I played soccer in front of my house, and cars went by only every five minutes. Now, they go whizzing by all the time, like in the United States. Poverty has ended [in Spain]."

Spanish businessmen and diplomats say they can profit from Latin America's growing business opportunities, especially as the region creates more trade links. Even so, they know that Western Europe, with decades of economic and political stability behind it, is still less risky.

In Latin America, says Sanchez, the spread of democracy and economic reform in the last 10 years has provided more security than ever before for Spanish businessmen. But, he adds cautiously, this "doesn't mean they are encouraged, it just means they don't get discouraged."