(FORTUNE Magazine) – LATIN AMERICA After a decade of hyperinflation, debt, and poverty, Latin America has started to rumble with change. One incentive: revolutions on the other side of the globe. So far, reforms in Mexico and Chile have yielded the most results. Mexico's President Carlos Salinas de Gortari, says Morgan Stanley senior economist Robert Gay, ''was competing in a free-for-all for capital and saw that Mexico was going to be ignored.'' A big gush of foreign investment is next on Salinas's wish list, and if it comes, Mexico indeed has a shot at becoming what Douglas Campbell, an investment banker who specializes in Mexican securities, calls ''a Korea on the U.S. doorstep.'' Chile is reaping the rewards of being first to adopt tough-minded free-market policies and to stick with them. New leaders in Brazil and Argentina have also slapped their economies with ambitious plans, free market in flavor, but there the jury will be out for a long time.

THE EX-COMMUNIST BLOC The formerly Communist countries of Eastern Europe are starting to feel the sting of their new skin as they shed their centrally planned pasts and metamorphose into market economies. ''There's going to be pain,'' says Klaus Friedrich of the Institute of International Finance. ''They have to disintegrate the system first to reintegrate it along market lines.'' One big unanswered question is how much Western capital their economies can absorb, and how quickly. East Germany, with the warm embrace of its deep-pocketed sibling in the West, will have the cushiest transition but can still be expected to get hit hard with unemployment and inflation. Czechoslovakia, saddled with archaic heavy industry, nonetheless has the next-best prospects. Other countries will look on anxiously as the mavericks of reform, Poland and Hungary, take their hits -- slowing output, high inflation, growing unemployment, and social unrest. With tenacity and guts, though, reform-minded governments stand to fare best in the long term.

CHART: NOT AVAILABLE CREDIT: BANAMEX (5) MEXICO GDP GROWTH INFLATION FOREIGN DIRECT INVESTMENT FOREIGN DEBT EXCHANGE RATE

CHART: NOT AVAILABLE CREDIT: CENTRAL BANK OF CHILE (3) CHILE GDP GROWTH INFLATION FOREIGN DEBT

CHART: NOT AVAILABLE CREDIT: PLANECON CAPTION: GDP GROWTH PER CAPITA GDP FOREIGN DEBT ECONOMIES BY SECTOR

CHART: NOT AVAILABLE CREDIT: PLANECOM, CIA CAPTION: INFLATION

CHART: NOT AVAILABLE CREDIT: SOURCES: IBRD, OECD, CIA CAPTION: STANDARD OF LIVING