2000-2010: Another lost decade for South America´s economic competitiveness and social welfare.
Credit Inphographics IMFdirect
“There’s no doubt that with the growth of China, we’ve seen a re-commoditization of Latin America,” said Colombia’s Mining Minister Mauricio Cárdenas, an economist and former Director of the Latin America program at the Brookings Institution in Washington DC.
In terms of economic development, Latin America did not take any advantage of the rising prices of commodities -raw-materials- , which prices nearly tripled from 2000 to 2010.
In that sense, Latin America’s share of global merchandise trade remained the same (5.7 %), and service exports fell to 3.4 percent from 3.9 percent.
It is difficult to do business in Latin America. The World Bank´s 2012 competitiveness ranked Brazil -the region’s biggest economy- as No. 126 out of 183 countries.
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In short, the continent’s decade-long boom may be ending. According to the U.N.’s Economic Commission for Latin America and the Caribbean (ECLAC), Latin American growth, which topped 6% last year, will slow to 4.3% this year and 3.7% in 2012. Brazil’s economy, the region’s largest, actually flat-lined in the third quarter; Argentina’s scorching growth of 9% this year will be halved to 4.8% next year, and capital flight is expected to be robust. Mexico’s growth, meanwhile, will drop from 4% to 3.3%.
That’s hardly doomsday news, but it’s one reason the Montevideo summit’s main action was to raise protective import tariffs…READ MORE HERE
The IMF’s latest Regional Economic Outlook: Western Hemisphere sheds light on Latin America’s reliance on commodities from a historical perspective. A study conducted by Gustavo Adler y Sebastián Sosa also looks at the effect of a sharp decline in commodity prices on emerging market economies and on the policies that could shield countries from that shock. READ MORE HERE