07 Jun 2013
In the last six weeks, United States President Barack Obama, Vice President Joe Biden and President of China Xi Jinping all have visited Latin America and the Caribbean. Far from being a coincidence, the leaders of the world’s first and second largest economies are turning to a transformed Latin America and the Caribbean—defined increasingly by opportunity, growth, democracy and optimism.
Yes, it’s the economy. In 2012, U.S. exports to the Caribbean, South and Central America totaled $205 billion, compared to $110 billion in exports to China. US exports to Mexico alone reached $216 billion last year. The bottom line is that Latin America has already emerged—and is not tied to any particular external partner.
Brazil is the world’s seventh-largest economy; Argentina, Brazil and Mexico hold seats in the G-20; Chile and Mexico have joined developed countries in the Organization for Economic Cooperation and Development (OECD).
Over the last decade, it has become a region of middle-income countries growing faster than the global average, reducing trade deficits thanks to a commodities boom , improved investments—and to growing domestic markets. The region has lifted 58 million people out of poverty and into the middle class since 2002. And despite some setbacks, the region has experienced its longest period of democratic rule, beginning in the 1990s.
Problems still exist. Weak institutions, corruption and citizen insecurity hinder the region’s development. And although poverty and inequality have been declining in the past years, 10 of the 15 most unequal countries in the world are in Latin America and the Caribbean. Another concern is that growth has been driven by consumption and is dependent on commodities in countries that have regressive tax structures.
Even though global economic turmoil is a cause of uncertainty, both China and the U.S. recognize that Latin America is part of the solution and not part of the problem. The region needs to tackle its pending problems. But with its young population, abundant water and renewable energy resources, food production capacity, growing markets, and increasingly resilient democracies, the future looks promising.