Looking to Latin America in 2011

A star economic region offering lessons for developed countries, a magnet for Asian investment and trade, and home to thriving democracies—Latin America would hardly have drawn such descriptions a few decades ago. But 2010 marked a standout year for the region, which outpaced the average growth rate of the global economy and continued forging trans-Pacific ties. Still, fears about organized crime continue to grow as countries in the region consider how they can work together to boost public safety. AS/COA Online takes a look at some of the top issues that will affect the region in 2011.

Latin America as a rising economic star. Once considered an economic basket case, Latin America turned around its financial fortunes. The region is expected to post 6 percent GDP growth for 2010. Global economic woes could draw that figure down to 4.2 percent in 2011, according to a report by the UN Economic Commission for Latin America and the Caribbean. Still, Latin America’s growth rate could outstrip the global average for the next seven years. This good news has some eyes turning to Latin America for instruction. A Financial Times article suggests the region offers lessons for the EU, weighed down by debt in southern Europe and Ireland, “to avoid a lost decade.”

Growing ties with Asia. As COA Vice President Eric Farnsworth recently wrote for The Huffington Post, “China, the primary purchaser of Latin American commodities, has emerged as a significant new regional player.” The region is rich in resources, with countries such as Argentina, Brazil, and Venezuela drawing billions in Chinese investment dollars. Ecuador is already predicting that it will be one of Beijing’s top investment destinations next year. But deeper links with China are just part of the picture at a time when Asia and Latin America are both growing rapidly. The exchange of goods across the Pacific will likely grow thanks to an increasing number of trade deals. Peru recently signed accords between both Japan and South Korea, while Chile inked one with Malaysia and started negotiations with Thailand. The possibility of eliminating tariffs through the Trans-Pacific Partnership would build on such pacts as well.

Crime to remain a top issue. The choice of “citizen security” as the theme at the next OAS General Assembly underlines ongoing regional concern about public safety and crime in the Americas. Recent events—such as Guatemala’s declaration of a state of siege in one of its northern provinces troubled by drug gangs, or Rio police quelling gang violence in one of the city’s favelas—demonstrate that the issue transcends geography. This month, Mexico reached a grim benchmark in its war on drugs when the number of drug-war-related deaths since January 2007 hit 30,000. Some Latin American leaders have already advocated a shift toward decriminalization and treating drug abuse as a health issue as a way to fight gangs and trafficking. Other observers have called for increasing hemispheric cooperation to tackle organized crime.

Upcoming elections. A new Latinobarómetro poll shows that support for democracy continues to grow in Latin America. Voters in several countries will head to the polls next year. Here are elections to watch:

• Presidential: Haiti (Second Round – January 2011), Peru (April 2011), Guatemala (August 2011), Argentina (October 2011), Nicaragua (November 2011)
• Legislative: Haiti (Second Round – January 2011), Peru (April 2011), Guatemala (August 2011), Nicaragua (November 2011)
• Gubernatorial: Several Mexican states will hold elections throughout 2011, including in the State of Mexico.

Learn more:

• “After a Good Year in Latin Americas, Some Predictions for 2011,” Eric Farnsworth, PODER Hispanic, December 11, 2010.
• “Latin America’s New Presidents,” an AS/COA Online news analysis that takes a look at the new presidents of Brazil, Chile, Colombia, and Brazil.
• The GE Foundation awarded the Americas Society a grant that will include funding for Chinese natural resource investments and comparison of Asian and Latin American strategies for transportation integration.
• Summary of AS/COA’s 7th Annual Predictors Forum: Economic, Financial, and Trade Predictions for 2011.
• Annual report by UN Economic Commission for Latin America and the Caribbean covers 2010 growth and offers forecasts for 2011.
• Reuters Factbox on “political risks to watch” in the region in 2011.