Wednesday, December 15, 2010

Latin America and commodities

Much has been made of the UN's (or, more precisely, ECLAC's) prediction that Latin American economies will grow next year by 6 percent.  But tucked toward the end of the press release is this little nugget:

According to Alicia Bárcena "The region's main challenge is to rebuild its capacity to implement countercyclical actions and to create the conditions for productive development not based solely on the export of commodities".

I find myself coming back to this quite a bit recently.  These economic numbers are great, but when "based solely on the export of commodities" they should point toward desperate need for diversification rather than self-congratulation.


Tambopaxi 9:38 AM  

Quite agree.

Down here, we need indigenous (in the general sense)economies capable of adding value (processed, manufactured, etc.) to raw materials extracted in country, while generating more, much more, employment in-country, and reducing shipments of raw commodities out of country.

Brazil seems to be reaching that kind of growth, but that's about it, at this point...

Anonymous,  2:19 PM  

Maybe things aren't that good in Brazil.

Brazilian Economy Booming, but Sliding Backwards
By Mario Osava IPS 10Dec2010

leftside 4:41 PM  

Things were never that good in Brazil. Their growth rates have been anemic throughout the 00s (and the 90s were a disaster). Poverty only decreased on paper because they began directly transferring money to the poor as welfare payments. Unemployment is actually higher today than it was in 2003, while in Venezuela unemployment went from 17% to 7% during that time. This idea of a Brazilian economic miracle rests on absolutely no economic foundation. It is an argument made purely for political means - to sideline more radical politicians by pretending like the US is fine with someone like Lula, who "respects private property." In reality, as Wikileaks is making clear, the US is very concerned about Lula and his Workers Party.

Randy Paul 10:07 PM  

Unemployment is actually higher today than it was in 2003, while in Venezuela unemployment went from 17% to 7% during that time.

Guess that depends on who you listen to.

Inflation has been effectively mastered in Brazil since 1995 and it became more stable when they let the real trade freely, except for a brief uptick in 2004.

One would think that someone concerned about the poor would consider the detrimental impact of inflation and note that inflation in Venezuela has been in double digits since 2003, resembling a roller coaster more than anything else.

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