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In an interesting article entitled Latin America: Growth, Stability and Inequalities: Lessons for the US and EU, the author talks about the new relationship of Latin America and the historic, economic and political world leaders.
Latin America, at least in the mainstream US media, has long been portrayed as a region of military dictatorships, political coups, political and financial instability, human rights violations, and desperate poverty. In the past few decades, and especially since the turn of the Millennium, we are seeing a ‘role reversal’ in Latin America’s relationship with the US and EU Countries.
Excluding the Latin countries still under US dominance, Mexico and most of Central America, the rest of Latin America has not only avoided the crises afflicting the US and EU, but have been growing at a healthy rate; at three times that of the US over the decade. The new millennium, especially between 2003-2011 (except for a brief interlude in 2009) has been a period of high growth, general prosperity, booming exports, rising imports, greater inter-regional co-operation, and large-scale poverty reduction.
Aided by China’s double-digit growth, Latin American trade has doubled, especially in its relationships with Asia. Demand for natural resources in the region has tripled. The key to this new export-powered growth is Latin America’s growing economic independence. This has led to the diversification of its markets, taking advantage of new opportunities and reducing their dependence on the US.
Because of Latin America’s current political stability and dynamic growth, institutional and corporate investment is pouring into the region. In contrast, the US and EU are suffering from disinvestment and declining rates of private investment. In other words, the development of Latin America is the other side of the coin of the US-EU underdevelopment.
While the US and EU print more money and increase debt to cover trade deficits, Latin America has quadrupled its foreign reserves. These reserves cushion any downturns and eliminate any dependence on the IMF. 2012 will see continued investment and advertising to the region.
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