Wednesday, April 23, 2014

The Rising Americas

Andres Velasco

Can Latin America’s economies overcome their entrenched low productivity? Will growing inequality undermine the region’s greater prosperity? Is narcotics trafficking a greater threat to democracy than the fight against it? How can the region diversify away from commodity-led growth? What sort of great power will Brazil become?

Two hundred years after Simón Bolivar launched Latin America’s wars of liberation, independence from want and political domination are at last becoming a reality. Despite the recent global recession, the past decade has been among the best the continent has experienced in a half-century, with rapid economic growth and low inflation lifting millions out of poverty and creating a large middle class – the linchpin of stable democracy.

Indeed, some people now speak of an emerging “Latin American decade.” If the region can maintain the pace of growth of recent years, its per capita income will double by 2025. By then, Brazil may be the world’s fifth-biggest economy, and a half-dozen Latin American countries could achieve developed-country status. But what must go right to make that happen – and what could go wrong?

As both a policymaker and academic economist, Andrés Velasco, a widely praised former Finance Minister of Chile and currently a fellow at the Center for International Development at Harvard University, has been at the forefront of Latin America’s transformation for two decades.He was the point man in negotiating Chile’s participation in the North American Free Trade Agreement in the 1990’s, and has served as an adviser to the International Monetary Fund and the World Bank.

In the face of mounting economic and political challenges – from both within and without – will the region’s commitment to markets, democracy, and sound government policies deepen or weaken? Every month in The Rising Americas, written exclusively for Project Syndicate, Andrés Velasco takes readers inside Latin America’s rise and addresses the key issues likely to shape its future.

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