Assessing Latin America as a monolith is a terrible mistake. Besides being extremely diverse in cultural, social, and even political terms, the region’s economic aggregates often hide significant country differences. Average results are pulled mainly by a handful of economies which perform as outliers in a region filled with smaller markets. As we decided to compare how the Brazilian economy performed compared to its neighbors, we focused our attention on the region’s main players, that is: Mexico, Colombia, Chile, and Argentina.
The history of Latin American economy is a tale of many ups and downs, an inconsistent struggle for development which has also caused many political shifts—and, in many cases, troubles.
Following a wave of free-market reforms in the 1990s, the region—and South America, in particular—decided to shift its political allegiance from the center-right to the center-left in the early 2000s. The process, known as the “Pink Tide,” profited from the last decade’s boom of commodities, with Chinese demand for basic products reaching levels never seen before. A major cash inflow helped countries lower inequality rates, lift millions out of poverty, and believe that Latin America’s time had arrived.
But overall, countries chose to focus on fostering consumption rather than investments, and few infrastructure revolutions were made—Brazil being a textbook example. When the global...
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