Formalized or not, there has long been a protective relationship between Latin America and the United States that began with the Monroe Doctrine in 1823. Even North America’s economic prosperity has long benefited the Southern continent. In 1991, for example, Argentina pegged the value of its peso to the U.S. dollar for nearly a decade to help control skyrocketing inflation, which in 1989 had reached 3080 percent. The policy worked and led to a prosperous era in the 1990s.
Today however, being hit with the sub-prime fiasco and swelling fossil fuel prices, the big cousin to the North is faltering. Latin America hasn’t missed a beat though, says Carlos Riviera, president of Global Search, an MRINetwork Worldwide office based in Mexico City that works throughout Latin America. He points out that Latin America’s 5.9 percent GDP growth in 2007 is better than both the U.S. and EU and is second only to Asia.
“Multiple free-trade agreements, foreign investment and growing internal economies are creating a ground swell in the Latin America job market,” says Riviera. “While the supply of labor remains strong, both local and international companies are coming up short when seeking professional talent.”
International corporations like Citigroup, McKinsey & Co, Novartis and Kraft Foods are known to send local students on scholarships to U.S. business schools to then return and work for the companies in their home countries, says Riviera.
In the past, U.S. recessions have adversely affected Latin America as money from the North dried up. This time, however, the European and U.S. economic slowdowns have combined with a growing middle class and Asian inflation to create an economic situation that Latin America is, at last, in a position to take advantage of.
Latin America used to be a good place for companies importing to the United States. Today, with shipping lines available from both the Atlantic and the Pacific, Latin America has become a place to do business when selling to just about any part of the world. In 2007, Chile exported nearly US$66 billion to Japan, U.S., Netherlands, Brazil, Italy, China, France and others, with no more than 15 percent of exports going to any one country.
“In the next decade we can expect Latin America to feature much more prominently on the international economic stage,” says Riviera. “Our time has come.”
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