2014: Is This Latin America's Big Year?
The 1980s were unkind to Latin America. Surging drug violence, economic turmoil, and a staggering debt crisis all led to our southern neighbors’ “lost decade”. Yet since the 2000s, things have been looking—and going—up. In fact, thanks to its strong economic growth and growing international influence, 2014 has the potential to be Latin America’s best year yet.
Latin America’s economic growth will only increase in its upward trajectory in 2014, driven by countries such as Brazil, Chile and particularly Mexico. According to the U.N., “Based on promising signs of private consumption and manufacturing, the region will see [expected] growth rates of 3.6 in 2014 and 4.1 percent in 2015, according to World Economic Situation and Prospects 2014, a report that launches in January.” The U.N. Economic Commission on Latin America forecasts that Latin-American Economic development will be the highest of all global regions for 2014. Brazil is slowing down compared to its explosive performance in recent years, but still very strong. Brazilian finance minister Guido Mantega said in December that foreign direct investment continues to be robust and, according to the Wall Street Journal, “pointed to $8.3 billion in foreign direct investment posted in November as a strong signal investors continued to favor the country. In October, the figure was $5.4 billion.”
At a time when America is struggling, it is actually the reason for huge growth and profits in Mexico, with nearly 80 percent of Mexican goods currently exported to the United States. Mexico is slated to surpass most of its Latin American neighbors and grow nearly 4 percent next year. Forbes declared that for Mexicans “Christmas arrive[d] early” in mid December, when the Mexican Senate approved a legislative measure that reforms the country’s energy sector and for the first time in seventy years allows foreign investment and production-sharing agreements in Mexican oil. According to cnbc, “the Mexico Department of Energy estimates that foreign direct investment in the sector will rise by 50 percent by 2018, to $10 billion, and that 500,000 jobs will be created in the process.” This is a major reform and will only help Mexico achieve its full economic potential in 2014.
Not to be outdone, Chile is also making significant and important economic strides that will boost Latin America in 2014. The Heritage Foundation recently hailed Chilean economic advances, “Making it onto the 2013 Index of Economic Freedom’s list of top 10 freest countries in the world for the second year in a row, Chile was also ranked No. 1 on Forbes India’s list of 7 Hottest Emerging Markets.” Chile grew faster than predicted this year (5.5 percent) and has managed their mining exports so spectacularly that S&P upgraded Chile’s bond rating to AA in early 2013, putting it on par with Japan and China.
All of these countries are making a significant impact on the global economy and the strength of investment and growth in Latin America is reaping great dividends, including a better quality of life and a lessening income gap between the rich and poor.
Yet this growth alone is not the only dealmaker for 2014 being a great one for LatAm. Our neighbors to the South are enjoying something of a spotlight moment in their global influence more generally. Their hosting of prominent sporting events, increased tourism and media coverage, and popular public figures are all contributing to making 2014 a banner year.
On the sporting front, Brazil is hosting the World Cup in 2014 and the Olympics in 2016. Both of these events are expected to draw hundreds of thousands of overseas tourists with their dollars, yuan and euros in tow. Any economic benefits, which are not always certain, aside, both international sporting events command worldwide media attention, which will help Brazil, and Latin America more broadly, brand itself on the global stage as vibrant and culturally rich a place as any in Europe or the United States. If those financial benefits do materialize, at least for the World Cup, it’s certainly no small thing. According to the Brazilian Ministry of Sports, Brazil’s economy is forecasted to grow by over $70 billion as a result of hosting the 2014 FIFA World Cup, and Brazil is projected to be the world’s fifth largest economy by the time they host the Olympics in just two short years.
With regards to tourism, Brazil doesn’t have the market cornered. Four of CNN’s eleven top places to travel in 2014 are in Latin America: Panama (100th anniversary of the canal), Brazil, Ecuador and Costa Rica all shine. The World Travel awards have also recognized Peru for the second year in a row for being the top pick for global gastronauts in search of excellent eats.
Latin America’s growing influence is evident in the media as well; just a few days ago the Economist announced that it is starting a weekly Latin America column, and readers are already suggesting column names in line with the magazine’s bent. A prominent Latin American who has been getting some important media coverage all year is Argentine Pope Francis, recently named Time’s person of the year. Assuming the papacy at a pretty low time for Catholicism, Pope Francis has managed to make his religion more accessible and popular with the masses than any time in the last one hundred years and raised the profile of Latin America in doing so. It doesn’t hurt that the popular Pope has unseated Hugo Chavez as the most prominent Latin American, following the latter’s death this year. All in all, things are looking up for Latin America next year, and as they’ve shown in multiple avenues, the sky’s the limit.
Image: Wikimedia Commons/Creative Commons.