LAC has been experiencing a golden decade of economic growth since the beginning of the millenium – often due to its booming commodity export industries. The IMF estimates that these industries saw an average annual growth of 15% per year during that period of time accounting nowadays again for half of South American exports for example.
But attention! Dark clouds may raise with a possible slugging global demand and the ‘Dutch disease’. Especially the latter – the Dutch disease – should seem familiar to us not least because the LAC region has suffered from it for centuries. The commodity boom leads to abundant capital inflows, appreciate the currencies and lowers the innternational competitivity of local manufacturers. With this, the economy remains based on commodity exports instead of broadening its portfolio to high-end products until… well, until the commodity export suffers from its global volatility again.