Latin America: Economy and Foreign Trade

Subject (Course): Economy and Integration of Latin America and the Caribbean. Syllabus:

1. Introduction to the Latin America Economy.
2. Economic Profile of Latin America
3. Effects of the global crisis in Latin America and the Caribbean.
4. Scenario after the crisis
5. Key challenges: innovation and technological change.
6. International Trade of Latin America
7. Economic relations between China and Latin America
8. Growing influence of China and other emerging economies.
9. Regional Integration in Latin America and the Caribbean.
10. Analysis of the Economic Survey of Latin America and the Caribbean published by ECLAC

The aims of the subject “Latin American Economy” are:

1. To analyse the evolution of the Latin American Economy
2. To assess the effects of the global crisis in the region
3. To analyse the intra-Latin American trade
4. To explore trade relations between China and Latin American countries
5. To evaluate the degree of Latin American economic integration

Sample of the subject - Latin American Economy:

Subject Description (Economy and Integration of Latin America).

1. Regional deceleration. Latin America economic growth rate: 1.1%
2. Mexico and Central America: 2,7%
3. Causes: global crisis, reduction world trade, and decline in export commodity prices (agricultural, energy, crude oil, and raw materials)
4. Volatility of financial markets
5. Diminishing of investment
6. Unemployment rate: 6%

1. After six years of uninterrupted growth, the gross domestic product of Latin America and the Caribbean fall by 1.8% and per capita GDP by close to 2.9%.
2. The global crisis hit the region hard at the end of 2008 and early 2009, taking a toll on all of its countries. However, the recuperation began to take shape in the second quarter and became more widespread in the second half of the year.
3. The economic slowdown cut into labour demand, and the unemployment rate is esteemed to rise to 8.3% for the region overall, while the new jobs that have been created are of poorer quality.
4. The effects of the crisis were channelled through the real sector of the economies, damaging what had been the main engines of regional growth.
5. Exports plunged, while the contraction of economic activity worldwide, together with the drop in International Trade flows, lowered commodity prices, which hurt the terms of international trade in Latin America.
6. At the same time, revenue from remittances and tourism fell, with Mexico and countries of Central America and the Caribbean suffering the most, and foreign direct investment plummeted by 37%.
7. Growth is esteemed to be slower in some of the most open economies that have a less diversified portfolio of trade partners and a heavier reliance on manufacturing.
8. The same can be said of the Caribbean economies, some of which are facing complex financial and exchange-rate situations.
9. However, it remains to be seen whether or not the developed economies will be able to sustain growth once the copious stimulus packages implemented by the United States and Europe are withdrawn.
10. The drop in foreign investment was generalised in all the subregions in Latin America and the Caribbean.
11. Foreign Direct Investment flows towards South America diminished 40%, while those to the United Mexican States and the Caribbean Basin fell 45%.
12. Brazil continued to be the main recipient of foreign direct investment (FDI), followed by Chile, Mexico, the Republic of Colombia and Argentina.
13. Among the medium-sized and large economies in Latin America, Chile is the economy with the highest proportion of foreign direct investment concerning its gross domestic product (8%).
14. As in the past, the services sector received the most amount of foreign direct investment, while the primary sector (agriculture, mining, and hydrocarbons) experienced a relative drop. The United States continued to be the main investor in the region, followed by Spain and Canada.

Source: the Economic Commission for Latin America and the Caribbean.