Latin America's optimism

For the first time in history, Latin America did not suffer too heavily from the consequences of a crisis that came from outside. The region has finally shown that it can demonstrate stability, withstanding even the most difficult moments of the crisis and experiencing a process of economic growth. After the various vicissitudes suffered by the subcontinent over the past century, dictatorships, coups, debt crisis and décadas perdidas, Latin American countries can look to the future differently: certainly not all countries' economies are registering the same levels of growth and not all are behaving in the same way, but overall there is a sense of optimism and a positive evolution of political-economic-social balances.

The International Monetary Fund has projected an average annual growth for Latin America of 4.5% over the period from 2010 to 2015. The IMF's estimates for Latin American countries are certainly lower than for other macroregions, but one has to consider the divergences recorded regionally: some countries such as Peru have an average annual growth of 6.2%, while Venezuela only 0.7%, Ecuador 2.2% and Argentina 3.9%. In any case, GDP per capita in purchasing power parity, which stood at US$11,200 in 2010, is expected to reach up to US$14,000 in 2015: a real improvement in the economy and living standards has thus occurred. Latin America, having weathered the financial crisis, has ushered in a new phase of development that will lead to a decade of growth, with per capita income rising to values similar to those currently seen in Eastern Europe.

There are several reasons for such a development. First, the growth of Asian countries, including of course China and lndia. China's prolonged and dynamic growth presents new global challenges and breathes new life into the Latin American economy: increased demand for raw materials and energy contributes to the development of the countries that produce them. In addition, Chinese operations have repercussions not only on exports but also on direct investment, and Beijing's strategies are precisely geared in this direction. China therefore drags with it the subcontinent and all commodity-producing countries.

Second, greater stability and management of macroeconomic policy. The flurry of populism (an element that has always characterized Latin American political life) first from the right and then from the left that hit Latin America first in the 1990s and then in the 2000s seems (partially) over. Of course, not all countries are exempt from this ubiquitous socio-political-cultural phenomenon, but the example of Lula's Brazil and Bachelet's Chile is undoubtedly an excellent viaticum for the entire continent. The governments of these countries have thought above all about implementing the reforms necessary for common development aimed at shared prosperity.

Third, the improvement of social conditions. The problem of poverty has by no means disappeared; far from it; it is a very serious problem that is difficult to eradicate. But the poverty rate is coming down thanks to economic growth and the adoption by some governments (Brazil above all) of social programs focused on education, health and prevention of extreme poverty. The emergence of a middle class fosters growth in domestic demand and presupposes a change in the social and economic policy of countries where development is combined with stability.

In addition, further measures such as better fiscal and microeconomic policy would still improve growth prospects. Latin America thus faces a decade that could definitely pave the way for development: admittedly the forecasts are still far from those in Asia, but the structural conditions are there. The path will not be easy, but the foundations that led to the election of more democratic governments have already been created.

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