UNESCO SCIENCE REPORT

7 . Latin America
Latin America
Argentina, Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador,
El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, Bolivarian Republic of Venezuela
Guillermo A. Lemarchand
INTRODUCTION
Development slowing after a buoyant decade
Latin America consists essentially of middle-income
economies 1 with very high (Argentina, Chile, Uruguay and
Venezuela), high or medium levels of development. Chile
has the highest GDP per capita and Honduras the lowest.
Within countries, inequality is among the highest in the
world, even though there has been some improvement in
the past decade. According to the United Nations Economic
Commission for Latin America (ECLAC), the four countries
with the lowest levels of poverty are, Honduras, Brazil,
Dominican Republic and Colombia (on Brazil, see Chapter 8).
The Latin American economy grew by just 1.1% in 2014,
meaning that GDP per capita actually stagnated. Preliminary
figures for the first quarter of 2015 suggest an ongoing
slowdown in activity since the decade-long commodities
boom wound down in 2010 (see also Figure 7.1); some of
the region’s larger economies could even experience a
contraction. While the region is expected to grow by about
0.5% on average in 2015, this masks a fairly wide variation:
1. Argentina and the Bolivarian Republic of Venezuela have had high inflation rates
for the past few years. However, the ‘official’ exchange rate has remained flat, a
factor which might generate some distortions in the real GDP per capita values
expressed in US dollars. For a discussion of this issue, see ECLAC (2015a).
although South America is set to contract by 0.4%, Central
American economies and Mexico are likely to expand by 2.7%
(ECLAC, 2015a).
Prospects for Central America have improved, thanks to the
healthy economic growth of their biggest trading partner,
the USA (see Chapter 5), and lower oil prices since mid-2014.
Moreover, declining prices for raw materials since the end of
the commodities boom in 2010 should give countries in Central
America and the Caribbean which are net importers of these
products some breathing space. The Mexican economy is
also dependent on North America’s performance and is, thus,
looking more dynamic. Present reforms in Latin America within
the energy and telecommunications sectors, in particular,
are expected to push up growth rates in the medium term.
Meanwhile, growth forecasts are being revised downwards for
those countries of South America that export raw materials.
GDP is most dependent on this type of export in Venezuela,
followed by Ecuador and Bolivia then Chile and Colombia.
The Andean countries of Chile, Colombia and Peru are in a
comparatively enviable position but this may be short-lived,
since their growth is expected to falter. Paraguay is also
showing strong growth, as it recovers from a severe drought
in 2012, whereas Uruguay’s economy is growing at a more
moderate rate.
Figure 7.1: Trends in GDP growth in Latin America, 2005–2009 and 2010–2014
2005–2009
2010–2014
Chapter 7
1.1
1.5
2.1
1.9
1.8
2.7
3.7
3.7
3.6
3.2
3.6
3.4
2.9
2.7
3.3
4.3
4.3
4.1
5.8
6.5
5.1
6.4
6.1
8.2
8.3
5.0
5.9
5.7
4.8
4.7
4.8
4.7
5.3
5.0
4.6
4.7
6.8
7.1
Panama
Cuba
Peru
Dominican
Republic
Venezuela
Uruguay
Argentina
Costa Rica
Colombia
Bolivia
Honduras
Ecuador
Guatemala
Brazil
Chile
Paraguay
Nicaragua
El Salvador
Mexico
Note: Data for Cuba cover 2005–2009 and 2010–2013.
Source: World Bank’s World Development Indicators, September 2015
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