The initial impact at least appears negative according to the IMF (International Monetary Fund), but does this have to continue to be the case is the next question. On the surface, the slowdown in China and the presumed Latin American reliance on commodity exports would bode poorly for future growth. That certainly may be the case for Venezuela or even disproportionately impact Brazil, but many of the states in the region are oil importers. Further, reform of the economy and a continued transition to greater economic equality and economies more reliant upon internal consumption could make the new environment into one of opportunity.
The Western Hemisphere as a whole remains relatively robust compared to the remainder of the globe. The US has continued its recovery since the “big recession” of the previous decade. In fact, the first signs of sustained growth highlight a move away from bottom level monetary policy at the same time China appears to be going the opposite way and Europe, well it’s just stuck in place. Perhaps the bigger danger to Latin America and the Caribbean could come from the flawed policy of austerity that is now eroding European wealth and political values.
Latin America could learn the lessons, move to broaden its economic base both in terms of exports and internal consumption and further reforms, from job creation to regulatory flexibility. This also does not have to come at the expense of the environment or progressive politics. Latin America has already made some great strides when seen from a half century earlier even if at times there appears to be regression. As in the cases of certain regions in Asia, Africa, and the Baltics, Latin America and the Caribbean could also leapfrog old industries and move forward without the mistakes of the past, from technology to clean energy. (See: “Solar Energy Has a Future, but Needs Support Now!”) With ample resources and a hard working population the base is still strong. (Read more of the IMF’s report: “(Yet) Another Year of Subpar Growth: Latin America & the Caribbean in 2015.”)
Link to Full Chart: “Net Oil Exports, 2014”