The earnings of top bankers in Brazil have accelerated past those in New York or London. LAN airlines just merged with TAM to create the second largest airline in the world – appropriately named LATAM. Positive anecdotes abound, reflecting an optimism that for so long was missing.
Latin America has always been sexy and exciting, but now it is also a good place to make millions. A report from Deloitte last year said that the number of millionaire households in Brazil would pass a million by 2020.
A debate I attended at the Royal Geographical Society last year asked whether this century will be Asia’s or Latin America’s. But there is no need for competition. The relationship is mutually beneficial: As China grows, it requires more of the natural resources that Latin America has in abundance. But for what it’s worth, the richest man in the world is not Chinese: Carlos Slim is Mexican.
There are concerns. Economies remain under-diversified, relying too heavily on China’s endless quest for raw materials. Sensible politicians in the region are aware of the need to implement reforms to diversify and mitigate the risk of dependency.
The biggest threat, as ever in this part of the world, remains political – populism has been dangerous. Venezuelan president Hugo Chavez’s mismanagement of the economy has left him discredited on the global stage but he remains popular domestically.
Despite the risks, Goldman Sachs has forecast that by 2050 Brazil and Mexico will be permanent fixtures within the world’s six largest economies.
By this time the United States, due to its Latino population’s elevated birth rates, will be so Hispanized that the Spanish language will rival English for predominance. The influence of Latin America is being felt everywhere. The future is Latin. (CNN)