Panel - Latin America and the Global Economy: U.S. and International Perspectives

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Panelists explored what Latin America’s growing economies mean on the global stage, with topics ranging from the region’s growing middle class to comparisons with Asia.

Panelists explored what Latin America’s growing economies mean on the global stage, with topics ranging from the region’s growing middle class to comparisons with Asia.

Speakers:

Rebecca Blank, Acting Secretary of Commerce
Sri Mulyani Indrawati, Managing Director of the World Bank
Richard Adkerson, President and Chief Executive Officer of Freeport-McMoRan Copper & Gold
Richard McGregor, Financial Times (moderator)

Financial Times’ Richard McGregor opened the conversation with a question to Acting Secretary of Commerce Rebecca Blank on trade, who noted that U.S. trade with the Western Hemisphere has increased 50 percent since 2009 and that 12 of Washington’s 20 signed free-trade agreements are with countries in the region. She said that what fuels this rising trade is the expansion of Latin America’s middle class, which a World Bank study found grew by 50 percent between 2003 and 2009. But, Blank warned, there are challenges. Among them: protectionist barriers preventing economic integration, as well as long wait times at ports and borders.

The World Bank’s Sri Mulyani Indrawati also discussed the middle class and offered comparisons between Latin America and Asia. She lauded efforts in Brazil and Mexico that provided a growth market for the people living in the lower 40 percent of income brackets, saying Latin America’s middle class expansion has moved 73 million out of poverty. She noted that this is important not only in terms of what happened over the past 10 years, but also what will happen in the years to come.

However, she warned that Latin American economies are growing at roughly 3.5 percent when they should be growing at about 5 percent. She also identified Latin American educational levels as a major challenge, particularly when compared to Asia, adding that effective states and labor markets are important for growth. Indrawati offered a differentiation between Asia and Latin America that is not a problem for the former but is for the latter: public safety. Crime and violence is one area that “is always holding [Latin American countries] back,” she said. 

Freeport-McMoRan’s Richard Adkerson provided his perspective on natural resources and their role in Latin America’s place in the global economy, with a particular focus on copper, given Chile and Peru’s large share of the global copper market. He pointed out that copper provides an interesting reflection on global economies, saying it rises when business rises and falls when business falls. But he also looked at changing trends in near history, pointing out that China accounted for 5 percent of worldwide copper deman in the 1990s but now accounts for 40 percent. India will soon contribute to demand as well. However, at the same time, supplies—and the quality of them—are declining.