Political Risk Latin America Blog @PolRiskLatam

Think Again: Latin America

Posted in News and Articles, Political Risk by politicalrisklatam on March 21, 2011

by Mauricio Cardenas for Foreign Policy, March 17, 2011.

America’s backyard is no longer an afterthought — or Washington’s to claim.

“Resurgent Latin America is a Threat to U.S. Interests.”

Quite the opposite. Listen to some of the rhetoric in Washington and you would think that Latin America only impacts the U.S. economy by sucking away manufacturing jobs and flooding the country with illegal immigrants. The truth is that U.S. economic interests are more entwined with those of its southern neighbors than ever. This is an overwhelmingly positive development.

For instance, U.S. oil imports from Latin America are larger than those from the Middle East. Saudi Arabia, Iraq, and Kuwait combined make up only 20 percent of U.S. oil imports. Latin American countries — specifically Venezuela, Mexico, Ecuador, Colombia, and Trinidad and Tobago — account for one third of U.S imports. For the United States, assuring a stable oil supply from its Latin American neighbors should be no less important than preserving stability in the Middle East.

Also, the Latin American consumer market is by no means irrelevant for U.S. companies. The region’s GDP is $4.2 trillion, roughly 84 percent of China’s $5 trillion. With only 40 percent of China’s population, Latin America’s average per capita income is twice that of China’s. Therefore, Latin American households are important consumers of U.S. manufactured goods and services. For example, in 2010, 20 percent of Citicorp’s overall profits came from Latin America. (continue reading… )



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