OZY on Latin America
WHY YOU SHOULD CARE
Because dollars to pesos, this is where the money is.
Ten years ago, the world had written Colombia off as a tangled wreckage of drug cartels, Marxist guerrillas and paramilitary death squads. But now many Colombians are dreaming of what only a few years ago seemed unthinkable — a bright future.
The guerrillas are gone, the paramilitaries are fragmented and Colombia has the potential to lead the region in growth, challenging the likes of Peru and Panama for the title of Latin America’s star economic performer. Real challenges remain, but the country is now open for business, posting annual growth rates of between 4 and 5 percent. And a newly confident business sector is forging a reputation for Colombia as an up-and-coming global destination in IT and services, spurred by state support for innovation.
Is the Aztec Tiger finally ready to roar?
President Enrique Peña Nieto is proposing sweeping economic and political reforms as the solution to Mexico’s deep-seated problems. It is unclear, however, whether his ambitious plans will survive political wrangling and widespread unrest.
Still, Mexico has the human capital and resources to become an economic powerhouse. Deaths attributed to organized crime during Peña Nieto’s rule have declined by 25 percent, while higher education levels and access to technology have increased civil engagement. Rising labor and transportation costs in China have once again made Mexico an attractive manufacturing center. The automotive industry has grown steadily, contributing a sizable portion of the estimated 100,000 jobs added since 2010. Mexico has signed an incredible 12 free trade agreements with 44 countries, the most of any country in the world. And, on top of all this, the country has some of the largest untapped oil reserves on the planet.
Whether the globe turns its soybeans into oil, flour, sauce, milk, meal or just leaves them raw, there’s a good chance they come from South America. Brazil alone brought 82 million tons to market last year. With new land cultivation, the United States’ fixation with ethanol and a drought in the Midwest, the Amazonian behemoth should become the world’s leader in soybean production in 2014. Argentina, which will sow nearly 50 million acres, joins Paraguay, Uruguay and Bolivia as the other up-and-coming soybean hot spots below the equator. It seems that everything east of the Andes will be in soy sauce bottles soon. In Paraguay, soybean production has skyrocketed, quadrupling in a single year.
But many wonder about the cost of South America’s agricultural supremacy, ranging from the impact of genetically modified organisms to food security and deforestation.