Same issues spiraling unemployment out of control inflation and unsustainable debt what makes it shocking is that this is not an isolated case in one Backwater country no this is a picture of several Latin American countries the blueprint of struggle and pain seems to have taken over the once great region and devolved
Into this lines of hungry people waiting for a meal have doubled in Brazil during the past two years with food inflation reaching 20 this skyrocketing inflation has been condemned by the director of the zero hunger Institute patient in Venezuela is the highest in the world and one of the issues along with Rising
Crime in Rio de Janeiro where there’s been an increase in violence robberies and fire fights are happening in places that were once considered safe cases of child malnutrition in the country have increased along with Hunger behind every door she finds a desperate family as they struggle to make Colombia
So how did Latin America’s economies get into this state what factors have led to several different nations in the region having what ultimately seems like the same blueprint and hence the same kind of struggles and finally how do the failures of Latin America impact the global Community as a
Whole let’s get into it this is Latin America in general Latin America is understood to consist of the entire continent of South America Mexico Central America and the islands of the Caribbean can also be roped into this description as well my point is Latin America constitutes a lot of Nations the
Peoples of Latin America share a history of colonization by the Spaniards and Portuguese from the late 15th through the 18th century as well as movements of independence from Spain and Portugal in the early 19th century now several of these nations share a common Heritage but they also have diverse differences
For the purpose of our discussion today I’ll be referring to Latin economies in a subset of the region but please do take the time to look up the individual countries and the beauties that they have who knows you could be planning a vacation there very soon cough cough Costa Rica
Also please take a moment to like this video your support will do wonders for the Channel with the algorithm also comment below which country’s economic issues you might wish for me to dive into I’m working on an economic series covering various Nations and regions and I’m open to starting up with the most
In-demand national economies for that Series so comment away back to the topic when you look at Latin America’s economic performance it is mediocre at best and that’s stretching the truth a bit mediocre economies are not shocking but when you consider that Latin America is one of the most blessed regions on
Earth with so many abundant natural resources the reason for their struggle becomes questionable Venezuela is a good example as a nation Venezuela is extremely rich in oil I’m talking about Daffy Duck levels of being rich but this doesn’t translate to the nation’s bottom line there are food struggles and no
Stability at all at home this picture is common in several Latin American nations in a way it’s a puzzle how some of the wealthiest 19th century nations in the world are now the most crisis prone is worth a deep dive from what I’ve seen the collapse of
Latin America’s economy comes down to a few key factors most videos on YouTube talk about some reasons and while some may be true those are not the reasons for the collapse of Latin America those are merely the symptoms of the bigger problems what are these bigger problems well
Let’s look at them if you’re watching from Latin America maybe you can do a self-analysis of your country to see if you can relate let’s start with what I feel is the biggest culprit the lack of globalization a lot of the successes enjoyed by many nations in the world has come as a
Result of globalization what is globalization you ask well it’s the word used to describe the growing interdependence of the world’s economies cultures and populations brought about by cross-border trade in goods and services technology and flows of investment people and information in this pursuit of making the world one big
Global Village globalization is the chief weapon unfortunately it is a weapon that Latin America has really been fumbling with many of the Latin American nations have remained closed off to the world this includes heavyweights like Brazil and Argentina who have not been spared from the struggles of the region those two are
Especially culprits because despite being some of the largest economies their trade figures are sad to look at trade accounts for meager portion of their gdps something which should not be especially since the Nations aren’t exactly booming so to say as a region intertrade is very minimal by International metrics it lags behind
Other places in fact Latin America and the Caribbean as a region are a full 11 percentage points below the global average that is to say they are 45 versus a benchmark average of 56 percent when you consider that in the 90s Latin America seemed poised for quite some
Growth even ahead of its peers of the time the curtain reality becomes startling Nations like South Korea and Singapore used to be Rivals of countries like Brazil and Argentina but today stand as their superiors these nations that have bettered the Latin American nations truly opened up
To the world and as a consequence of trade and its Associated benefits have seen the wealth Gap closed with the developed world this is in stark contrast with Latin America which seems to just barely be holding on the question that we are left with is why hasn’t Latin America been
Able to thrive in a more connected world just like with all things there are several reasons many of which I will touch on in a few moments but the key culprit is the lack of regionalization this just means the exchange of trade money and knowledge within Latin America
Itself and yes even though this is just a smaller more contained version of globalization you can’t go out into the world to trade if you are closed off to even your own Neighbors Latin American nations are rich in resources very very rich if there was more effort placed into building
Regional links and affiliations the trade within Latin America itself would boom to unprecedented levels to attain such a Target significant changes are required in areas like education Automation and public Investments maybe more than all that A change is required in the mentality that seems solidified
In the Region’s people a big part of why regionalization hasn’t been fully rooted is the simple fact that there are weak intra-regional ties among Latin American nations when you look at Europe as a model European nations have fully grasped the concept of working together and having strong ties
In Latin America this just isn’t the case and believe it or not the lack of strong Regional ties ends up having tries down deficiencies that rot the whole region let me explain Scholars of Global Supply chains or as they call them Global value chains show how being part of international
Manufacturing and production attracts investment and Technology it teaches workers new skills and it enhances the managerial capacity it opens up space for local factories and companies to upgrade their processes and make more sophisticated and higher priced components or Goods these studies also show that without strong commercial ties
To nearby Nations workers and consumers tend to be left on the less productive and less valuable ends of Global Supply chains limited to sending out raw materials and bringing in finished products a reality that probably sounds all too familiar to Latin American ears the nature of exports in Latin America
Has largely remained unchanged and undiversified now keep following when the Regional Supply chains are this limited these Imports tend to have little local content what results from this are products that instead of supporting compete with domestic suppliers and companies with all the domestic competition and downplaying we end up having reduced National output
And in the longer term limited potential economic growth that’s where the problem is the current model that Latin America has adopted limits its own growth and we are at a point where most of these economies have capped domestic growth despite the potential to be bigger than they currently are
It is therefore no surprise that in Latin America less than 20 percent of trade takes place within the region itself this could explain the slow growth in weak links the economic ramifications that come from this only serve to hurt this Latin American economy and this therefore begins to manifest in other
Ways bringing problems like the one I’m about to touch on the more we go deeper into this video the more the snowball effects are going to become clearer another thing that’s become clear is that the CCP won’t sponsor my video as some of you might know I announced on April 1st that the
CCP has decided to sponsor my next video Unfortunately they decided to back out once they saw my past videos it’s fine though because I decided to sponsor my own video again I recently launched YouTube Basics Academy where I share the lessons I’ve learned while growing this
Channel in the past few years if you are someone who’s interested in starting their own channel where you don’t have to show your face you can check out YouTube Basics academy by clicking on the link in the description best of all the first five people to use
The code launch will get a hundred dollars off their purchase and record inflation on inflation inflation Rising prices of food and fuel are a shock the price of meat in Brazil has increased by almost 40 percent inflation has doubled the price of staple food products like rice food
Insecurity in Brazil has increased four times more than the average global rate the rise in fuel prices and record inflation more than 11 a year the situation is so serious in Brazil that experts are comparing Latin America’s largest economy to that of some of the world’s poorest countries inflation has
Been a thorn in Latin America side for a while and the past few years have been especially tough after the pandemic threw everything into the blender for Latin America the Russian invasion of Ukraine made it harder to recover this came with heavy burdens with Nations like Brazil Chile Colombia Mexico and
Peru experiencing high levels of inflation in many cases record-breaking the increase in inflation was initially driven by surging food and energy prices but became broader reflecting monetary policy inertia and wage indexation practices as well as a strong recovery and demand initially for goods but later for services too now when it comes to
How inflation was I would need to go on a case-by-case basis as there is a variation between the nation’s economies but the symptoms of high prices in inflation was spread throughout the region as for what else keeps fueling inflation well take your pick from rising commodity and import prices to
Massive exchange rate depreciations that are all rampant however in spite of being the Doom and Gloom messenger it seems that 2023 might have some encouraging news as growth and less inflation are poised to take place as good as this is it’s simply not enough this year’s regional growth is expected
To slow to just two percent amid higher interest rates and falling commodity prices add to that mixture job creation and consumer spending on goods and services that are both slowing and consumer and business confidence that is weakening as if that’s not enough growth will further be stunted by a Slowdown in
Trading partners particularly the United States and Europe these few Partners who are the lifeblood of the little globalization that Latin America does seem to have limited trade plans for the future this however is a dynamic thing and I’m sure it will improve as for whether inflation will get better on the other
End it’s questionable the high inflation high prices and rough economic conditions leads to other factors let me explain I want you to note however how all of this is a rolling chain that just keeps feeding into itself more problems be getting more problems just like the lack of globalization contributed to
Weak economies and hence High inflation we now have high inflation and prices giving us this another military operation in the streets of Rio this is what poor Brazilians in hundreds of slums are going through day in and day out the murder rate in Chile has gone up
An astonishing 30 in the last six months alone abductions have become big business in recent years these men say poverty has led them to the life of crime armed with assault rifles and with their identity hidden drug traffickers and members of the feared Venezuela criminal organization have focused in on Chile
The challenge with economic problems is that once they reach a certain threshold they slip into the rest of the economic and National fabric problems bound to produce more problems and often this manifests in the erosion or degradation of Social and moral structures as slowing growth High inflation and Global
Uncertainty shoot Sky High there is increased tension towards what the future holds for many Latin American citizens and that causes various ruptures within Society this can easily manifest into Political changes and that is how destabilization takes place within Nations the pandemic pressures revealed a huge problem one that has
Only been highlighted the more problems have been magnified in the pandemic and even now as times Harden the poorer people have borne the brunt of the economic Fallout it is not a special situation or condition that is exclusive to Latin America the poor always suffer first in
Any region of the world the challenge is that when the poor constitute a good deal of the population in Latin America and their suffering which seems never-ending starts to get highlighted this leads to a small more rather large phenomenon called inequality inequality quickly snowballs into Political destabilization
Look at it this way for Latin America the combination of slower economic growth and persistent inequality is a source of anxiety for all political actors in the region the political effect of the stabilization of inequality cannot be underestimated people are directly affected by differences in income in terms of Life outcomes however their
Perception of fairness and Justice is also strongly linked to levels of inequality negative perceptions regarding the fairness of a society are a source of anxiety for economic Elites this becomes an additional barrier in economic Waters because in the face of instability people do not Thrive economically because they fear that populist
Politicians might come into office and wreak havoc on economic stability this derails business growth and provides an air of uncertainty to those willing to invest in economic structures it’s not one-sided though you also have leftist parties and politicians who worry that economic Elites and international financial institutions will overreact to
Demands of redistribution by curtailing the ability of the underprivileged to influence policy this anxiety-filled context may lead to situations such as the current political turmoil in Brazil which should be a cautionary note for the rest of the region uncertainty has led to anxiety and inequality which has led to more destabilization
This has manifested in this breaking situation in Brazil thousands of supporters of ousted former president bolsonaro storm Congress the Supreme Court and the presidential Palace protesting October’s election results supporters of former Brazilian president jair bolsonaro ransacked the National Congress Supreme Court and presidential Palace in the capital Brazilia a symptom
Of a contentious presidential election current president yair bolsonaro supporters unwilling to accept his narrow but decisive defeat when it happens on a larger scale just like it is in Latin America it then makes sense how the whole Region’s economic and social collapse becomes more highlighted I think I’ve given you quite the picture
Of this snowball event and how it’s aiding the collapse of Latin America’s economy but if I don’t talk about this last thing this video would feel incomplete if you live or have lived in Latin America this might hit close to home I’m talking about the level of violence and crime in this region
Where poverty and inequality are Strife you will undoubtedly see the mark of crime and violence as I said earlier in the video in the face of economic pressures social and moral constructs quickly erode and this is seen heavily in Latin America crime and violence in Latin America have become so rampant they present
Themselves in two forms the first one is an increase in interpersonal violence throughout the region this has become so normalized that Latin American cities have some of the highest crime rates in the world the second manifests itself in organized crime especially in areas that are relevant for drug-related markets this
Is the type of violence that we see magnified by media when they put that yellow filter when the scene switches to Latin America cities and movies yes we see you Hollywood I do have to say however that there are variations in the crime rates within Latin America itself
You see some countries like Honduras and El Salvador that share the highest levels of homicides around the world and you have others like Chile and Uruguay that are among the lowest the variations can be expressed as a result of the differences in just how deep the contributing factors are within a
Certain city or country this is to say the poorer and more destabilized a region the more crime you get the drift it creates a kind of unique stress when violence and crime adds to the uncertainty of say opening a business if you can’t depend on the basic rule of law and public authorities
To act the way they should well things get complicated the protectors become the enablers that right there is a recipe for disaster so
