Latin America's Underdevelopment

• Latin American countries haven't industrialized and developed to the extent of Europe and the United States.
• This is despite engaging in global trade and maintaining capitalistic economies.
• These countries are considered underdeveloped, with lower living standards and less political/personal freedom.
• In the early 1960s, Latin America's per capita income was more than double that of East Asia.
• Latin America now lags behind several Asian countries that started from similar low-income levels 50 years ago.
• South Korea, Singapore, Taiwan, and Hong Kong are examples of Asian countries that are now developed nations.

Historical Factors

• Colonization, unequal distribution of land and resources, and exploitation of natural resources have influenced Latin America's poverty.
• Political instability, corruption, and economic policies have significantly contributed to poverty.
• Bolivia and Venezuela have the highest poverty rates per population.
• During the Imperial period, Spain imposed a command economy and authoritarian political system on its colonies.
• Trade monopolies in agriculture, mining, and commerce were enforced by Imperial Governors and a privileged aristocracy.
• Social inequalities limited access to education, health care, and economic opportunities, perpetuating poverty.

Addressing Poverty

• Social and economic reforms are necessary to address poverty.
• Investment in education, infrastructure, sustainable development, and inclusive growth are also crucial.
• Over 70% of Latin America's land mass lies within the tropics, making it vulnerable to diseases like malaria, yellow fever, and dengue.
• The region’s distance from key markets complicates transport and trade.
• Most Latin American nations adopted a civil law tradition after independence.
• Common law systems are more conducive to economic growth and development.

Agriculture & Resources

• Large-scale plantations dominate the agricultural sector.
• Northern regions have more mixed farming with grains and livestock.
• Mixed farming has fostered more democratic institutions, stronger property rights, and a larger middle class.
• Colombia, Venezuela, Brazil, and Mexico have abundant mineral and agricultural resources.
• Large populations make it difficult for governments to distribute wealth evenly in those resource-rich countries.
• Haiti, Costa Rica, and French Guiana have limited natural resources, struggling to increase their GDP.
• Brazil has the regions largest economy
• Brazil's economy has diversified into technology and aerospace, beyond exporting raw materials like coffee and soybeans.
• Brazil, Mexico, and Argentina have significant manufacturing sectors, which provide skilled jobs and create further employment opportunities.
• The rest of the region relies mainly on resource extraction, agriculture, and tourism.

Challenges to Growth

• The drug trade from South America to the United States has hindered growth due to violence and corruption.
• Talented individuals in Latin American nations are drawn to the drug trade.
• Many Latin American countries have elected populist leaders who lack competence.
• These leaders have driven away business investment and failed to address social problems, or improve relations with the United States.
• In the 1950s, Latin America attempted import substitution industrialization, but this approach failed and left the region vulnerable to the debt crisis of the 1980s.
• Over the past two decades, Latin America has shifted towards a market-based approach to trade and industrial development but must prioritize Science and Technology.
• Latin America invests only half a percent of its GDP in research and development, compared to the 2 to 3% investment in East Asia.
• Investment in developing agricultural technologies is also low.

Labour Markets & Inequality

• From 2020 to 2022 there have been improvements in dimensions of the labor market.
• There is currently a slow crisis in terms of Labor inclusion.
• Quality of life has improved overall, but areas of extreme poverty (Haiti and the highlands of South and Central America) require a different approach.
• In 2022, 54 million households (39% of the total) depended exclusively on informal employment.
• Most children under 15 and people over 65 reside in households that are either completely informal or mixed.
• The income of the top 10% of earners is 20 times higher than that of the lowest 10%.
• In 2021, the wealth of just 105 individuals made up nearly 9% of the Region's gross domestic product.

Globalization & Trade

• Most of Latin America has not fully embraced globalization or International Trade.
• Latin America's economies have become less diverse in terms of the goods they produce over the past 30 years.
• Mexico is the only country that has diversified its economy away from Commodities.
• Natural resources account for about 25% of Mexico's exports, compared to 60% or higher in the rest of the region, and over 90% in countries like Venezuela.
• Latin American countries can capture economic and Commercial dynamism by building and expanding their connections in the new Global context.
• Achieving this will require significant changes in education, Automation, public investment, and mindset.

Latin American countries are underdeveloped compared to Europe and the United States, despite engaging in global trade and maintaining capitalistic economies. Historical factors, such as colonization and unequal distribution of resources, have influenced poverty. Political instability, corruption, and economic policies have significantly contributed to this underdevelopment.