Bloomberg — Latin America’s biggest economy has long been dubbed “the country of the future and it always will be,” a description that might just as easily have been applied to the region as a whole.
But Brazil and the other economies across this vast part of the world, rich in both natural and diverse human resources, have an increasing number of opportunities to transcend the past as new technologies and geopolitical realities remake the landscape.
This Wednesday 18 and Thursday 19, the inaugural Bloomberg New Economy Gateway Latin America summit will be held in Panama City, Panama. At issue will a nuanced assessment of the dynamics reshaping the future of an entire global region.
Latin America is well known for high levels of poverty, but also home to vibrant centers of entrepreneurship and efforts to raise up the impoverished. There are at least two dozen unicorns in industries ranging from on-demand deliveries to digital payments, and startups have sprung up to fill voids such as access to credit, healthcare and education.
With a relatively young population, Latin America doesn’t face the kind of demographic decline that’s starting to afflict China. And that may leave it well positioned as advanced economies from the US to Japan look to diversify their supply chains.
Particularly for the US, near-shoring is an option that may be an economic catalyst for Latin America, kickstarting growth and job creation.
The region has also seen some surprising (and problematic) bursts of innovation, including the adoption of Bitcoin as legal tender by El Salvador.
For the moment, economic growth here is slowly recovering despite the ongoing pandemic. The region is encumbered by one of the biggest inflation surges in a world filled with them. Economists surveyed by Bloomberg expect consumer-price gains in Latin America to reach almost 15% this year—more than double the region’s 2021 average. That’s worse than any region except Eastern Europe, where Russia is currently waging the region’s biggest war since World War II.
But unlike past eras, many of Latin America’s central banks have been trying harder to contain prices—and in the process seeking to avoid the kind of parallels with the 1970s and early 1980s made by critics of the US Federal Reserve.
Led by Brazil, Latin American central banks have acted faster and more aggressively than their peers elsewhere. Just this month, Brazil, Mexico, Argentina, Chile and Peru have increased interest rates. But expectations are that borrowing costs will still need to go higher.
The political situation remains complicated, however, with the region’s governments struggling to meet the growing demands of their populations. And plans by some administrations to snub U.S. President Joe Biden’s hosting of next month’s Summit of the Americas illustrates the potential limits to deeper economic ties with Washington.
Discussing the above issues next week in Panama City will be, among many others, Juan Gonzalez, Special Assistant to President Joe Biden, Ecuadorian President Guillermo Lasso and Michelle Bachelet, former Chilean President and currently United Nations High Commissioner of Human Rights.