Is Brazil's economy too commodity-dependent? Yes: Peter Kingstone; No: Lisa Schineller In this issue: Brazil's reliance on commodity exports threatens its medium- and long-term growth prospects. Brazil's economic success is based on more than the demand for natural resources.
In the past decade, China's expanding engagement with Latin America has captivated the attention of the region and the United States. Most of the focus, however, has been on whether the new trade and investment is good for the region's long-term development, and whether particular Chinese activities, such as military sales and loans to Venezuela and Ecuador, threaten U.S. interests in the region. Lost are the details and dynamics of how Chinese companies and the Chinese government have adapted to doing business in the region. China's new physical presence in Latin America is the product of a fast-growing commercial and investment presence. But as a consequence of that deepening relationship, Chinese companies and China's diplomatic apparatus have become increasingly immersed in the business, social and political conditions in those countries—and in some cases are even shaping those conditions to suit their interests.
There's been an amazing revolution in the global commercial landscape. The developing world has emerged as one of the most promising wholesale and retail markets. Many of these regions in the past were valued primarily as a source of cheap labor—often in maquilas and sweatshops. Today they are seen as a source of new consumers.
Across Latin America, retailers, telecommunications companies and shopping malls are reaping the benefits of a growing middle class that is able to shop more and spend more. According to McKinsey Company, Latin America is one of the largest emerging markets in the world with a combined GDP of $3.2 trillion, boasting triple the GDP per capita of China and seven times that of India.
Central America is receiving more attention in the U.S. news media and from the U.S. government than at any time since the region's civil wars and domestic insurgencies three decades ago. Unfortunately, the attention is negative. The focus has shifted from the 1980s Cold War battles of President Ronald Reagan's administration to the violence associated with organized crime, drug cartels and street gangs (maras). In Drug Trafficking and the Law in Central America: Bribes, Bullets, and Intimidation, Julie Marie Bunck and Michael Ross Fowler—professors of political science at the University of Louisville—provide those interested in Central America, the drug trade and U.S. foreign assistance in the region with an invaluable tool for understanding the causes and implications of drug trafficking through an analysis of what they term the “bridge countries” of Belize, Costa Rica, Guatemala, Honduras, and Panama. The authors intentionally do not include Mexico, which they argue (correctly) involves a different dynamic both in terms of the strength or weakness of the state, and the nature of the drug trade.
United States-Latin American relations have often suffered from a disconnect. While we stress security issues, the region's leaders speak of poverty reduction and trade. They resent being seen as afterthoughts to U.S. policies focused elsewhere. As a result, the region is sporadically open to new suitors, such as Spanish investors 15 years ago, or the Chinese today.
As a result of increased trade flows, China has jumped on many countries' lists as one of the leading destinations for exports and sources of imports. Below is a comparison of China's rank as a trade partner with individual LAC c dollar amount of trade, countries in 2000 and 2009.
Americas Quarterly: Why is China today so interested economically in Latin America? Li Jinzhang: After 30 years of reform and economic opening, China has scored remarkable achievements in economic and social development, and its connections with the rest of the world have become closer. China needs the world to achieve development, and the world needs China as a contributor to development and stability. Latin America is an important part of the developing world. In recent years, China and Latin America have drawn on their respective strengths and economic complementarity. The result has been rapid growth in economic cooperation and trade, and a vigorous boost to their respective economies. These synergies have brought real benefits to our peoples and contributed to global development and stability. Moreover, the potential for future growth in cooperation and trade is huge. We hope to achieve mutually-beneficial cooperation and common development through closer economic cooperation and trade with the region.