Booming Latin America offers trading path out of recession

OPINION:A joint article by Latin American ambassadors María Esther Teresa Bondanza, of Argentina; Pedro Fernando Bretas Bastos, of Brazil; Teresita de Caridad Trujillo Hernandez, of Cuba; Leonel Fernando Searle Couve, of Chile; and Carlos Garcia de Alba Zepeda, of Mexico

THE FIVE Latin American ambassadors in Ireland believe this country should turn its gaze to the region that accounts for 9 per cent of the world population to diversify its trade and strengthen its position worldwide. Latin America represents 16 per cent of world trade and, despite a global outlook for slow growth, its countries collectively grew by 4.9 per cent per annum between 2003 and 2008.

Two decades of democracy and macroeconomic policies have led to the development of a growing middle class of 180 million, and much higher levels of consumption. The region attracts 32 per cent of global investment, and this year Brazil overtook the UK to take sixth place in the world economy.

In 2011, our five countries alone exported €650 billion (up 20 per cent on 2010) and imported €673 billion (up 20.6 per cent on 2010).

Despite the difficulties and diversity that still persist in the huge region, Latin America has lived the best years of its history over the last 30 years.

Poverty has decreased: according to the Economic Commission for Latin America and the Caribbean (Eclac), between 1990 and 2010, the region’s poverty index has fallen by 17 per cent to stabilise at 31 per cent of the population, while the proportion living in extreme poverty was reduced by 10 points to 12 per cent.

At the same time the countries have substantially improved education, key to the long-term eradication of poverty.

Despite persisting social inequality and a high index of violence in some regions, there was an average economic growth of 6 per cent in 2010, while in the US and Europe over the same period, growth rates were negative. According to OECD and the Eclac forecasts, Latin America will grow by between 4 per cent and 4.5 per cent in 2012.

Argentina, Brazil, Chile and Mexico have been at the forefront in the internationalisation of our enterprises, paying close heed to technological development and innovation.

Growth has been sustained due in part to high prices in raw materials, mainly in farming and minerals, and to exports, above all directed to emerging Asian countries. While in the past Latin America exported mainly to the US, over recent years its markets have diversified and China is now a key partner. It is the main export destination for Brazil and Chile, and the second for Argentina, as well as for Cuba; and is the third-largest investor in the region, with 9 per cent of foreign direct investment (the US is still top at 17 per cent).