• David G Arvidsson

Top 5 challenges in Latin America -the next 10 years

Updated: Apr 2




The pandemic has proven to be very challenging for Latin America who has one of the highest COVID-19 death rates in the world. Unfortunately, this magnificent region was experiencing challenges even before the pandemic and will be experiencing more challenges afterward. Disregarding the pandemic, I have listed the top five challenges in Latin America in the next decade, some countries are more affected than others, that I believe is halting the development of the continent. This includes economic, political and social development, which have all been considered. It is also important to understand that many challenges are intertwined meaning that one challenge creates another and another, starting a domino effect almost impossible to stop once put into motion.


I came up with a rating system based on my personal believes and knowledge, rating the challenges between 1 to 5 in three different categories.


1 – very low

5 – very high


The three categories:

The chance of solving the challenge

- The overall probability solving the challenge


Economic impact

- Foreign direct investment (FDI). How foreign investors will be affected negatively

- Economic growth impact


Social and security impact

- Freedom of the press

- Freedom of political expression

- Overall security



#5 Foreign involvement


Economic Impact

4

Social and security

2

Chance of solving

3


This challenge is a tricky one because it’s a fine line between challenge and opportunity. Countries are dependent on foreign companies to invest, which creates jobs and improves the economy in general. But the challenge is that countries are now becoming dependent on foreign investment and allowing foreign companies to dictate the terms instead of the other way around. This has become a new form of colonization, where instead of rich countries exploiting poor countries, multinational corporations are now exploiting poor countries.


The influence of China has not gone unnoticed, historically the US has been the dominant force in the region, but China has now through strategic investments and trade become a force to reckon with in the region. According to the TIME “in 2019, Chinese companies invested $12.8 billion in Latin America, up 16.5% from 2018, concentrating on regional infrastructure such as ports, roads, dams and railways.” These investments are necessary to provide Latin America with the right tools to compete with other regions in the world. But to what cost?


The influence of multinational corporations will become even more evident when countries start vaccinating their citizens after the ongoing pandemic, and many poorer countries in the region will have to comply with the demands of larger corporations.

The influence of multinational corporations will only increase in the next ten years and only time will tell what the outcome will look like but there is a high probability that countries will become even more dependent than they were a few decades ago.


#4 Climate Change


Economic Impact

4

Social and security

3

Chance of solving

3


Latin America consists of some of the countries that are the most reliant on its natural resources. Colombia with its coffee farms, Honduras with its banana plantation and Mexico with its avocado plantations among many others. The slightest change in temperature can affect the seasonal life cycle of a plant. In the past, the climate conditions were more predictable making it easier to adapt for the farmers, but with the growing uncertainty of the climate, it is becoming harder and harder for farmers to grow their crops.

Coffee for example is one of the crops that is very vulnerable to climate change. Climate change is set to increase temperatures, reduce water availability and decrease moist which are all essential components to grow coffee. Coffee farmers are forced to move further up the mountains to a more suitable location, making it expensive and lowering productivity.


Climate change is also creating frequency and severity of extreme weather such as droughts, sea level rise and heavy rain.



https://www.nbcnews.com/news/world/colombia-s-coffee-danger-these-scientists-are-fighting-save-it-n891221



#3 Inequality


Economic Impact

4

Social and security

5

Chance of solving

2

The challenge that is closest to my heart is inequality. Latin America is the most unequal region in the world and the consequences are devastating for the overall sustainable growth of the region and social inclusion. Even though the poverty rate has decreased, the fact that a few own almost everything creates an unbalanced society that creates amazing opportunities for a very small percentage of the population and leaves the rest of the population with almost no opportunities.


The best example can be found in Chile, which is seen as a role model in terms of how well they have managed to stimulate their economy and move forward from more than 15 years of dictatorship. In general, Chile’s economic growth has outperformed the rest of the continent.



https://en.wikipedia.org/wiki/Economic_history_of_Chile


But while the economy has been growing steadily the majority of the population has not experienced it. So, in the Fall of 2019, what seemed to be a meaningless increase in bus fares, started a chain of events that led to a number of demonstrations that lasted for months. The main reason was the fact that the Chilean population was tired of the inequality in the country. But Chile is not the only country experiencing this challenge, and I believe it will be the first of many countries that demonstrate against this growing problem. Because inequality does not only include income inequality but perhaps even more important the access to health care, good education, gender equality, etc. It has become clearer than ever during the pandemic that those that have access to good health care have a higher probability of surviving a deadly disease. After the pandemic is over, the focus will once again point towards how some people live like kings and queens while others are struggling to make a living.

#2 Crime and insecurity


Economic Impact

4

Social and security

5

Chance of solving

2


This is evident in some countries more than others but the growing concern of gang-related violence, femicide and political persecution can be experienced throughout Latin America. Taking Mexico as an example, gang-related violence has skyrocketed since 2008 and there is no solution in sight. Perhaps even more concerning is the growing number of femicide cases, which according to the World Politics Review , an average of ten women are murdered in Mexico every day, and femicide has jumped by 137 percent over the past five years. These are very worrying numbers and sad news, but hopefully, the ongoing demonstrations will create some sort of change and provide more security to women. There is not one simple cause for this growing problem but many studies that I found have claimed that this will be an ongoing problem until impunity is fought. The perpetrator manages to get away with their crime far too often and governments need to make a clear statement that they are taking this problem seriously in order to see real change. Femicide is defined as “the intentional killing of women or girls because they are female".




Photo: Alfredo Estrella/AFP



#1 Corruption

Economic impact

5

Social and security impact

5

Chance of solving

1

For me, this is the source of all challenges. I believe that if this challenge could be solved, all the rest could also be solved. But that is easier said than done. Corruption is part of the DNA of Latin America and existed as long as the countries themselves. It is a combination of inherited problems from the colonizing powers and the incompetence of governments and their leaders.

When studying the complexity of Latin America sooner or later you will bump into two competing theories that try to explain why Latin America looks the way it does: Modernization theory and Dependency theory.

To put it simply, Modernization theory tries to explain that societies, regardless of its historic background, have the ability to modernize through reforms and innovation. Modernization theory refers to a model of a progressive transition from a “pre-modern” to “modern” society. If a “pre-modern” country (in other words a developing country) decides to adopt more progressive “ideas” the end result will be that the developing country will become a developed country.


Dependency theory on the other hand is the theory that opposes Modernization theory. Dependency theory believes that the poor countries are dependent on the rich countries, claiming that the developing countries will never be able to become rich countries. Simplifying it, dependency theory claims that poor states are impoverished, and rich ones enriched by the way the poor countries are integrated into the “world system”. Rich countries are exploiting poor countries on their natural resources and have been doing so since the colonization era.


If we want to use these two theories to explain the reason why there is so much corruption, I believe that the truth lays somewhere in between. As mentioned, corruption is to some extent inherited from the colonial powers and how they are exploiting Latin American countries of their natural resources. Rich countries prefer leaders that maintain the status quo because it means that they will keep profiting. But there are countries, such as Uruguay, that have managed to create a transparent and democratic country, but in order to do so serious changes had to be made, through reforms and innovation.



- David, Mar 2021