The countries that comprise what is known as Latin America are most nations that are considered to be developing or underdeveloped. In other words, these countries that lower Gross Domestic Products or GDPs in comparison to the advanced nations of the world, higher unemployment rates, and more moderate industrialization. Bleak as it may sound, this means these countries are ideally poised for capitalization and progress. Many tech companies across the world are viewing Latin American countries as suitable places for outsourcing jobs because of the availability of cheap labor. Similarly, these countries are also ideal for foreign investment and investment in the development of infrastructural facilities.
Thus, the Latin American economy is one where there are numerous opportunities for growth. Some of the primary features of the Latin American economy are as follows:
Most of the countries in the Latin American region are Agro-based economies. In other words, the industries in these countries are dependent on agricultural products. For example, Brazil is one of the top exporters of raw cane sugar. Moreover, many other nations in the Latin American region are known to produce large amounts of sugarcane. Thus sugarcane is also used to manufacture commercial sugar and other similar products. Hence, numerous industries in Latin America are dependent on the production of sugar.
Moreover, the hot and tropical climate of Latin America is conducive to the production of sugar. However, the challenge for most of these industries is to ensure a continuous supply of raw sugar. Most of these agricultural units are dependent on weather and rainfall. Hence, if the weather is not conducive, then the industry will suffer and, subsequently, the economy. Thus, the primary issue with the Latin American economy is that most of its productions are agro-based and dependent on weather.
Many of the Latin American nations are dependent on the export of raw materials like petroleum and iron ore. However, the trading of raw material has always been considered to be less lucrative than finished goods. Moreover, foreign investment in the drilling of crude oil off the Gulf of Mexico has always been a sensitive issue. However, foreign investment is essential to ensure that the drilling of oil is done in a technologically advanced manner. Petroleum is also a relevant product exported by Venezuela. But the mining and export of crude oil are done by the Venezuelan government. Similarly, the mining and trading of tin are important for Bolivia, another country in Latin America. Other items that are mined and exported by Latin American countries are bauxite, copper, gold, and iron ore. However, even though the mining industry is a thriving one in Latin America, yet it remains a primary sector industry. Thus, the economy of the Latin American nations continues to remain sub-par because it exports raw materials and not finished goods.
A major hurdle faced by the Latin American countries when it comes to economic growth is lack of cooperation. Most of the countries in this region are backward and under-developed. There is a lack of infrastructural facilities in most of the nations in the Latin American area. There is a requirement for building better railroads, bridges, highways, and airports to attract foreign investments. There has to be increased and improved public spending to improve the overall living conditions of the people of Latin American nations. Another problem with the lack of sustainable development is that there is a significant lack of strategic planning. In most of the Latin American states, internal and political strife have prevented the progress of the individual nations. The countries are unable to move ahead economically because of the lack of connectivity, economic planning, and implementation of the plans. There is a requirement for developing necessary skills and providing adequate education to the younger generation of the residents of the Latin American countries. This will ensure that they get opportunities to work in a better position and improve the economies of their respective nations. Thus, with the drawing up of sustainable developmental plans and proper implementation of these plans, the economic condition of the Latin American countries will improve.
The nations of the Latin American region are yet to advance in the digital sphere. Digitalization of their economies is essential to help them come at par with other developing nations of the world. For example, with digitalization comes the improvement of the skills of the youth of the countries. As the youth becomes more skillful, job opportunities will naturally increase. Moreover, the chances that foreign companies will now look to outsourcing jobs to Latin American firms will also improve. Furthermore, digitalization is essential in helping to develop entrepreneurial skills amongst the younger generation. Entrepreneurial skills are necessary for the growth and development and the overall well-being of an economy. Thus, for the Latin American economies to thrive, digitalization is of absolute importance.
The Latin American savings should be able to use their labor force adequately to improve its economy. To do so, the children must be well-educated. Education is of vital importance not only for the well-being of the economy but of the population as well. Moreover, in the long run, an educated and highly skilled labor force proves to be more lucrative than an unskilled one. Also, in a world that is highly digitalized, the demand for a skilled labor force will only increase. Thus, by educating the youth, the Latin American countries can look forward to making a foray into the software and digital industry.
Therefore, there is a lot of room for improvement in the economies of Latin American countries. These improvements must be made strategically to make these sustainable and worthwhile. Moreover, without making adequate improvements, Latin American countries will not be able to improve their GDP and stop being considered as underdeveloped nations of the world. Thus, the economies of the Latin American nation can improve only with major fiscal policy changes.
Jun 09, 2020