Latin America and the Caribbean, the Worst Run Region in the World.

The population of poor individuals (defined as those living on less than 1,9 USD/day) is concentrated in Africa, Asia and Latin America and the Caribbean. The explanations for this are plenty but I am convinced that the first and foremost is poor governance. Africa has by far the most ruinous administrators and Asia the most authoritarian. But the rulers of Latin America and the Caribbean (LACAR) stand above all in their level of incompetence.

LACAR has neither the burden of overpopulation that Asia has (144p/km2 vs 32p/km2) nor the ethnic enmities that entangle Africa in endless conflicts. It did not endure any large scale war during the previous century, and amid other natural resources it enjoys the largest fresh water reserves.

LACAR has certainly had the easiest path to develop and yet continues to underperform. In the 1970’s it was the Asian Tigers who left it behind, in 2016 it was China. Peru and Colombia’s GDP per capita was 5 and 6 times that of China in 1980. Countries in Asia with huge populations like Vietnam (92M), Indonesia (261M) and the Philippines (103M), although still much poorer, are making important headways growing at approx 6% per year during the last decade. Latin America’s growth per year in the same period was approx half that. Don’t forget the effect of compounding on the aggregate growth.

Although LACAR enjoyed growth above 4% between 2004 and 2011*, it lasted what the commodity boom lasted. The stoppage observed today is the evidence its economy didn’t evolve. The paragon of the region’s mismanagement is without a doubt Venezuela, a country that having no ethnic or religious strife and holding the largest proven oil reserves in the world is currently ruined. But representative economies of the region such as Brazil, Argentina and Mexico don’t have much going their way either.

One of the most comprehensive indexes that ranks countries in the wellbeing of their citizens is the Global Prosperity Index. In it, only Chile, Uruguay and Costa Rica (4% of the population of LACAR) are amongst the top 30 of 149 nations evaluated** Of the many unfulfilled duties of the governments in the region, education, the mother of equal opportunity, stands out. Only Chile makes it to the top 50.

What is there to blame if not the sheer incompetence of its leaders? And to what extent does the frustration/rage this generates explains that 1 out of 3 homicides in the world happens in LACAR, when it accommodates only 8% of the population?

Disheartening enough, current events show no change in the horizon. Brazil’s political elites – from both left and right – continue immerse in the largest ever scandal of corruption. In Argentina the populist Cristina Fernandez de Kirchner might win the first round to represent in the senate the province of Buenos Aires (the most populous one). Colombia’s much celebrated peace agreement conceals a political divide – between those in favor and those against the agreement – that can jettison the progress made if the opposition reaches power in next years presidential election. And sticking to the primary definition of a state as the owner of the monopoly of violence, Mexico is probably the largest failed state in the world.

Mediocre leaders keep being elected (even after they’ve proved their ineptitude), because of the lack of education of the population and the lack of education of the population is the result of the rule by mediocre leaders. It is compelling to find a way to end this vicious cycle.

@davidabuchar

*(except 2009)

** to be more precise Chile ranks 31st