Latin America...has its time finally arrived?

I recently read an article on the FT, which indicates that economic growth in Latin America and the Caribbean is forecast to average 4.5 per cent this year, twice the estimated US rate and four times faster than the eurozone. Fiscal deficits in Latin America are expected to average 2.3 per cent of gross domestic product in 2010, compared with 6.8 per cent in the euro area and 10.6 per cent in the US!!

http://www.ft.com/cms/s/0/28446610-8930-11df-8ecd-00144feab49a.html

What?? Fiscal discipline and faster economic growth in Latam than in the 'knowledge economies' of the EU and USA?? What's going on?? What happened to the land of hyperinflation and generalisimos??

The answer is the 'agribusiness boom' particularly in the Southern Cone Region of Brazil, Paraguay, Argentina, Uruguay & Chile (all part of the MERCOSUR common market). This region has positioned itself as a powerhouse in major commodities and with the huge demand from China and increasingly from India this very competitive and vast region of the world has become the 'world's agriculture heartland' with good climate and modern and efficient technology this is a key strategic area now and over the next 20 years as the balance of power/money moves East.

However...2 big problems remain in Latin America...EDUCATION & INFRASTRUCTURE!! There are huge disparities in wealth and levels of economic development...due to mainly to the inability of local governments to collect taxes...and more importantly to use to taxes efficiently and honestly!

And...therefore we come to the chicken and egg question?? The only way in which probably the area of the emerging world with the biggest potential for improvement in quality of life and economic development can achieve its goals is through an efficient and honest tax system, but taxpayers refuse to pay taxes as they feel their money just goes to fill somebody's pocket!!

Instead of having that money reinserted in the local economy via better infrastructure, health and education...it goes abroad to benefit developed economies and not their own.

In other words there is growth, but the wealthy fear for their lives (kidnapping, armed robbery are widespread). There is growth, but the have nots increase not only in number...but also in resentment and we know what happened in France when the masses had enough of the excesses of the King and his entourage!

Latin America is blessed as one of the most beautiful and plentiful areas of the world, but until they develop a love for the country that matches the passion for the national football team...well this great opportunity for a restructuring of the social/economic system triggered by the current economic boom, will simply pass by the majority of the population and instability will simply increase...let's hope the Presidents shown here get the message.