January 22, 2018

Official from UN’s regional body Jürgen Weller talks to the Herald

Tuesday, August 5, 2014

South American commodity exporters most exposed to crisis

By Federico Poore
Herald Staff
The big picture for Latin America can be summarized in the title of one of the chapters of ECLAC’s report published yesterday: “private consumption decelerates and investment stagnates, while government consumption and exports drive growth.”

Economic growth has been slowing since 2011, and figures available for the first half of 2014 indicate that the region will not match the growth rate of 2.5 percent recorded last year.

“The main factor leading to reduced dynamism in the region’s economies is an external scenario less favourable than during a great deal of the last decade,” Jürgen Weller, an official in charge of ECLAC’s Economic Development Division, told the Herald.

“Countries most affected by these changes of scenario are precisely those who previously benefited from the dynamic demand of the region’s commodities. This means that those most affected will be those South American countries that mostly rely on mineral and metal exports, agroindustrial products and, probably to a lesser extent, oil and gas,” Weller added.

In this context, the ECLAC official explained that Central American and Caribbean nations (whose major exports are financial services) were not so benefited by the previous boom and will not be hit so hard by the new scenario.

Running at different speeds

While some countries were able to show steady growth rates, others had suffered uneven figures during the last four years.

Bolivia, Colombia and Peru have seen strong and steady increases in their rate of growth — in each case, increments ranged from between four and 6.8 percent.

On the other hand, Paraguay and Venezuela delivered bumpy performances.

The country led by the late Hugo Chávez and then by Nicolás Maduro grew by 5.6 percent in 2012, only to slow down to a disappointing 1.3 percent a year later — its economy is expected to fall by 0.5 percent this year. Another extreme example is the Paraguayan economy, which shrunk by 1.2 percent in 2012, only to grow by an amazing 13.6 percent in 2013.


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