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Economic Problems of Modern Latin America

In Latin America, there are now three vectors of economic development. Some countries show high rates of economic growth, while others show an apparent slowdown, but there are also some states that are in deep crisis. Despite the countries’ success in the so-called “golden decade,” many of them are experiencing deterioration in their economic situation. It should be noted that the economic problems for the regions of Latin America are mostly general, but their severity and manifestations vary.

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Latin America is the name of a region located south of the United States that unites countries and territories where the Romance language group languages are used as the official ones. The countries of this region are also united by common history of development. All of them were captured as colonies by Spanish and Portuguese colonizers (Frieden, 2018). The colonizers brought a large number of Negro slaves to work on the plantations. These actions have led to a rather diverse ethnic composition of the region’s population. Moreover, there were several waves of population migration from various European states.

The beginning of the twenty-first century was a time of stable economic growth for Latin America, so the period from 2003 to 2013 has been called the “golden decade.” It was marked by the triumph of left-wing regimes and the strengthening of centripetal tendencies, which resulted in the emergence of several new integration associations (Black, 2018). The strengthening of regional ties was made possible mainly due to the positive dynamics of economic development, provided by a stable upward trend in world prices for energy resources and food products – traditional items of Latin American exports.

The main reasons for the current situation are, on the one hand, economically unjustified populist projects that defined the matrix of social development in such countries as Argentina, Brazil, and Venezuela failed, and on the other hand, market leaders did not find convincing answers to the challenges of the time. As a result, with their incompetence and incorrect strategic moves, the ruling regimes drove the economy of the region into torpor. These negative phenomena should be added significant consequences of domestic political upheavals, first of all, high-profile corruption scandals, and the premature removal from power of the current heads of state (Frieden, 2018). It is also essential to mention the strengthening of foreign rivalry in Latin America and the aggravation of ideological and political contradictions between the Latin American countries themselves destabilizing the situation in the region.

The situation is further aggravated by the fact that Latin America has not been able to extract the maximum dividends from the process of globalization. Contrarily, the region has fully experienced such shock external effects as price fluctuations in the world markets of raw materials and food, financial disasters, and the consequences of trade wars. Statistics show that in the period 2013-2019, of the seven most significant Latin American economies, only the Peruvian economy grew faster than the global average (Black, 2018). In developing countries, such economic stagnation often creates conditions for political and social instability.

The region of Latin America is extremely interesting for the study of human economic well-being. This region is worth paying attention to because Latin American countries are demonstrating success in the fight against poverty, illiteracy, and other critical social problems. However, along with the achievements, the region’s residents’ problems are evident. Understanding the reasons for their origin will help prevent their occurrence, ensuring a better future for the country’s economy.

References

Black, J. K. (2018). Latin America: Its Problems and its promise: A multidisciplinary introduction. Routledge.

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Frieden, J. A. (2018). Modern political economy and Latin America: Theory and policy. Routledge.

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