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Latin America’s Splendid Isolation

Eighty years ago, Latin America, far removed from turmoil elsewhere, missed the opportunity to reshape its economies and societies, with the growth of the 1940s giving way to the inflation and balance-of-payments crises of the 1950s and 1960s, and then to the lost decade of the 1980s. Could it happen again?

LONDON – Latin Americans frequently complain about being far from the rest of the world, but sometimes distance can be an advantage. As the great economic historian Carlos Díaz-Alejandro noted, in “the 1930s and 1940s, most Latin Americans could feel lucky.” After all, the “Spanish and the Chinese Civil Wars, World War II, the depth of depression in the United States, Stalinist purges, the political dependence of Asia and Africa, and the pains of decolonization in India and elsewhere could be viewed by Brazilians and Mexicans as remote events.”

Nowadays, Latin Americans can feel lucky again. Should Russian President Vladimir Putin or North Korean leader Kim Jong-un launch a tactical nuclear weapon, at least it will not land anywhere near São Paulo or Santiago.

There are economic similarities with the interwar period, too. The 1930s brought the end of laissez-faire and free trade, and eventually the division of humanity into warring blocs. Similarities with today’s incipient deglobalization, and the risk that countries will have to choose between China and the United States, are more than passing.