Latin America: Condemned to Poverty?

Productivity, an indicator of the relative capacity of wealth creation, has been stagnant in the region for thirty years.

Thursday, April 24, 2014

Manuel Hinds' analysis in an article published in Elsalvador.com, notes that "... Latin America has two problems with productivity. One is that it is low compared to developed countries. The other is that, with the modest exception of Chile, it has not been increasing over the past thirty years. I say modest because although clearly distinguishable, it does not compare to the productivity growth of Korea (shown on the graph), Singapore and Hong Kong (not shown) were the only countries which emerged from underdevelopment in the last hundred years. In fact Chile has managed to draw with Mexico in first place in Latin America, but that represents only 56 percent of the productivity of Korea and 32 percent of that of the United States. "

The graph presented in the article clearly shows the backlog in productivity of the most successful economies in the region, such as Mexico and Chile.

Hinds points to the surprise that is generated from the fact that "... China's productivity is as low as that of Brazil. However, it is growing rapidly and promises to leave Latin America behind in a few years, if it [Latin America] does not wake up from its long slumber, which The Economist, referring to Brazil, called 'the fifty-year nap.' "

"... Actually the nap is not fifty years long. For two centuries we have been the region that is about to develop. But we have not done so yet because we have not understood that the basis of development is productivity, and that is based on knowledge. Instead of understanding this, we still believe that wealth requires no work or study, but only a miracle to make us all to be rich without having to work."

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More on this topic

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