Economic Development Is a Fairy Tale for Poor Nations
Manufacturing won’t pull them out of poverty. Neither will commodities. Their last, improbable hope: Build a middle class around services.
Still waiting for development.
Photographer: Cris Bouroncle/AFP via Getty Images
Latin America was a pretty poor place in 1980. Its gross domestic product per person amounted to only 42% of that of the average citizen of the so-called Group of Seven rich nations that then ruled the roost.
Then lots of things happened: Governments from Buenos Aires to Mexico City did a 180 on a half-century of statist, inward-looking economic policy. They slashed budgets and sold off public enterprises; opened up to trade and foreign capital. Mexico hitched its economy to the United States through Nafta. Brazil and Argentina tied the knot (sort of) via Mercosur. China swooped in to buy the region’s commodities.