How Latin America could be a commodities superpower (The Economist, 10 August 2023)

How Latin America could be a commodities superpower (The Economist, 10 August 2023)

15 August 2023

This article, published by The Economist on 10 August, asserts that with a rich history spanning over five centuries as a key commodity supplier, Latin America is poised to become the 21st-century's commodity superpower.

The Economist attributes this potential resurgence in part to the global transition to clean energy: Latin America boasts over 20% of global reserves of metals that are essential for green technologies, including 60% of the world's lithium. Latin America also provides 30% of the world's corn, beef, and poultry, and is strategically positioned as the West aims to diversify its trade relations away from China. Recent foreign investments, such as a $3bn Saudi investment in Brazilian mining company Vale underscore this trend.

But the region's relationship with commodities has been historically tumultuous, marked by economic imbalances and political unrest, and the current political landscape, with its rising populism, may hinder foreign investments. The article argues that, in order to escape its resource trap, Latin American governments should strive to distribute benefits more equitably to local communities, and channel investment into critical areas such as education and infrastructure.

Read the article here (behind paywall).

The Land Group

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