Despite a long history of boom and busts, Latin America is increasingly looking like one of the world's shining stars.
"Our region is growing in global strategic importance while remaining a region of diverse opportunities and challenges," said Marisol Argueta de Barillas, senior director and head of Latin America for the World Economic Forum (see sidebar, page 44).
There is a growing consensus that the coming years will be "Latin America's decade."
"Strong economic growth, coupled with ambitious goals to build on recent successes is just one example as to why Latin America is poised to see its best decade yet," Susan Segal, president and CEO of the Americas Society/Council of the Americas, writes in a column in this issue (see page 20).
Behind that optimism is sustained economic growth in recent years, a surprising ability to withstand the worst of the recent global crisis (in sharp contrast to past crises), political stability (in most countries) and a positive economic and political outlook.
Except for the crisis year of 2009, Latin America's GDP has grown at higher rates than the world average of the past seven years. From 2011 through 2015, the International Monetary Fund (IMF) estimates that Latin America's economies will grow an average of 4 percent annually. That compares with an estimated 2.7 percent in the United States and 2.1 percent in the EU during the same five-year period.
"There is a greater consensus on fundamental policies," said Joydeep Mukherji, senior director of Latin American Sovereign Ratings at Standard & Poor's, during a webcast entitled Will 2011 Be The Dawn of The Latin American Decade? "That's positive for us [as] we'd like to see consistent policies, not sharp turns."
A combination of better fiscal policies, flexible monetary policies and lower levels of external debt have given Latin America a greater isolation from outside shocks, according to Mukherji.
Meanwhile, the region now boasts five investment-grade countries. Over the past three years, Brazil, Peru and Panama joined Mexico and Chile in receiving the coveted rating, which helps reduce financing costs and helps attract investors.
Another key factor behind Latin America's performance during the crisis was sustained, high demand from China for natural resources from countries like Brazil, Chile, Peru and Argentina.
That helped offset failing demand from traditional markets like the United States and Europe. In fact, Asia is now Latin America's...