Latin America: Brief profile
The developing world, where economic and social challenges are most pronounced, spans three key regions: Africa, Asia, and Latin America. In Africa, widespread poverty, political instability, and underdeveloped infrastructure are common, though there is significant variation; countries like South Africa and Mauritius have more advanced economies compared to nations such as Chad or South Sudan. Asia presents a stark contrast, with highly developed economies like Japan, South Korea, and Singapore alongside developing giants such as India and Indonesia, as well as poorer nations like Afghanistan and Nepal. Finally, in Latin America, countries like Brazil and Mexico have emerging economies with growing middle classes, while others, such as Haiti and parts of Central America, struggle with deep poverty and inequality. Despite these disparities, each region showcases both the challenges and potential of the developing world.
Regional Overview
Latin America comprises 33 independent nations and 17 external territories in Central America, South America, and the Caribbean, with a total population near 650 million (8.1% of the global total). Brazil (213 million) and Mexico (126 million) together account for more than half. Spanish is the main language, though Portuguese prevails in Brazil. Urban hubs such as São Paulo (22.8 million), Rio de Janeiro (13.8 million), Mexico City (22.5 million), Buenos Aires (15.6 million), Bogotá (11.7 million), and Lima (11.4 million) are central to regional growth, yet rural–urban disparities remain pronounced.
Colonial Legacies & Independence
European colonization by Spain and Portugal left lasting social, linguistic, and political foundations. While many territories achieved independence in the early 19th century, others followed later. Cuba was under Spanish control until 1898, then governed by the United States until 1902; the Dominican Republic wrestled with Spanish and Haitian rule; Panama separated from Colombia in 1903 with U.S. assistance; Belize became independent in 1981; and Guyana (1966) and Suriname (1975) highlight how staggered timelines shaped diverse political trajectories.
Economic Landscape
GDP per capita (pp) spans from roughly $3,000 in Haiti to around $30,000 in Chile and Uruguay; Colombia and Peru, at approximately $15,000, sit near the median. Human Development Index scores echo these divides, with Chile, Argentina, and Uruguay (0.85+) at the top and Haiti (0.55) at the bottom. In total GDP (ppp), Brazil ($4.2 trillion), Mexico ($3.0 trillion), and Argentina ($1.1 trillion) outsize Colombia ($1.0 trillion) and Chile ($0.6 trillion). Commodities remain integral to exports, though manufacturing, services, and nearshoring now bring wider opportunities.
Food & agricultural capitals
• Michoacán, Mexico – Avocado Capital of the World 🥑• São Paulo State, Brazil – Orange Juice Capital 🍊
• Guayaquil, Ecuador – Banana Capital 🍌
• Colombia's Coffee Triangle – Coffee Capital ☕
• Mendoza, Argentina – Wine Capital 🍷
• Oaxaca, Mexico – Mezcal Capital 🍶
• Rosario, Argentina – Soybean Capital 🌱
Economic & trade capitals
• Panama City, Panama – Trade & Logistics Capital 🚢• São Paulo, Brazil – Financial Capital 💰
• Montevideo, Uruguay – Banking & Offshore Finance Hub 🏦
• Antofagasta, Chile – Copper Mining Capital 🏗️
• Guadalajara, Mexico – Tech Capital 💻
• Bariloche, Argentina – Chocolate Capital 🍫
Top-Tier Countries: Chile, Uruguay, Costa Rica, Panama
Stable governance and transparent institutions are common threads. Chile draws on mining and service industries, Uruguay on emerging tech and finance, Costa Rica on tourism and high-value services, and Panama on its banking and logistics sectors. Their comparatively higher GDP per capita and lower corruption foster investor confidence and long-term social investments.
Bottom-Tier Countries: Nicaragua, Cuba, Haiti, Venezuela
Though each country's challenges differ, all endure systemic governance strains. Nicaragua's authoritarian shift curbs economic freedoms; Cuba's centralized economy limits trade; Haiti grapples with deep poverty and failing infrastructure; and Venezuela's resource mismanagement has triggered hyperinflation and mass displacement. Such conditions hinder economic momentum and strain social cohesion.
Global Positioning
Latin America's role in global supply chains is anchored by abundant agriculture and mineral production. Brazil leads in oranges, soy, and iron ore; Chile dominates copper output; and Argentina and Bolivia hold key lithium deposits. Mexico and Peru contribute large silver exports, while Venezuela possesses significant oil reserves. Rapidly evolving manufacturing—especially Mexico's automotive, aerospace, and electronics industries—and Brazil's robust agribusiness underscore the region's broadening economic base. Nearshoring, particularly in Mexico and several Central American economies, strengthens ties to North American markets. Worldwide demand for copper, lithium, and agricultural staples positions multiple Latin American exporters favorably in the shifting global economy.
Labor And Migration
Latin American migration unfolds both across borders and within countries, driven by uneven economic prospects, political unrest, and sector-specific labor demands. Skilled professionals often move to North America or Europe in search of higher wages and research opportunities, a “brain drain” that curtails innovation and local competitiveness. Low-skilled workers commonly take on agricultural, construction, or domestic roles abroad, often facing uncertain legal status or wage exploitation. Within the region, many Bolivians and Paraguayans seek employment in Argentina, while Venezuelans continue dispersing to multiple neighbors. Seasonal migration is also strong within countries: for instance, rural workers in Mexico or Brazil travel to more prosperous agricultural zones for harvest work. Remittances from these movements bolster local economies but do not fully offset the social costs of family separation, limited labor protections, and possible discrimination. Ultimately, the interplay of push-and-pull factors—ranging from wage differentials to political instability—sustains a complex migration landscape that significantly affects labor markets, development, and social welfare.
Questions
1. Labour Migration: What are the key “push” and “pull” factors driving labor migration within and out of Latin America?
2. Remittances: How do remittances impact local economies? Do they contribute to sustainable economic development?
Exercises
1. Research a Latin American country not discussed extensively in the excerpt and analyze its economic strengths and challenges. Prepare a short report or presentation on its global positioning.
2. Choose one developing country that underwent economic restructuring (for instance, through an IMF/World Bank structural adjustment program or a free trade agreement). Investigate the outcomes of those policies on the country's economy and workers. Key points to research could include changes in employment levels, working conditions, wages, or public services after the policies were implemented.
3. Identify a recent news article or report about migrant workers or labor migration. This could be about guest workers in the Middle East, refugees seeking employment, cross-border seasonal farm workers, tech workers moving on skilled visas, etc. Briefly summarize the case – Who are the migrants? Where are they coming from and going to? What kind of work are they doing, and under what conditions? What prompted their migration (economic need, conflict, recruitment by companies, etc.)?
Last updated: Spring 2025