Page 13 - MONTT GROUP LATIN AMERICAN MAGAZINE JANUARY, 2020(Ingles) .pdf

Gross Domestic Product of the Asian giant reached 15 percent, despite the measures taken to avoid overheating its economy.
The hunger for commodities had been growing for more than a decade, to the point that only in 2010 imports increased by almost 40 percent to stand at 1.39 trillion dollars. Much of the demand was satis ed with Latin American primary products, such as copper, soy, oil and others, thanks to which China stimulated an unusual expansion in the region. The economic growth of the continent literally exploded, with great political stability, an impressive improvement in the quality of life of the population and the restructuring of the entire social body.
This began to be noticed immediately in numbers. In fact, in 2010, Latin America’s GDP increased by almost six percent on average, led by Argentina, with 10 percent; Peru, with 8 ,5 percent and then Brazil with 7,5 percent. Chile reached 5,2 percent annually, but in the fourth quarter of that year it climbed to 5,8 percent.
Middle Class Boom
As of 2000, the per capita product in the region began to increase at an average annual rate of almost three percent and income inequality fell due to the accelerated reductions in the pay gap between high and low- skilled workers.
Thus, according to the World Bank, between 2002 and 2014 the percentages of poverty throughout the territory fell from 44 to 28 percent and of extreme precariousness from 19 to 12 percent. In that period Latin America went from having 225 million people in poverty to 167
million, and from 99 million in total indigence to 71 million.
Regarding the changes in the middle class in Latin America, the World Bank itself establishes that between 2003 and 2009 it grew by about 50 percent, that is, the amount of person who entered this segment was about 49 million, until reaching the amount of 152 million. In Chile, speci cally, in less than two decades the middle class tripled, from 23,7 percent of the population in 1990 to 64,3 percent in 2015. This is equivalent to saying that today about 11,3 million people and 3,7 million homes belong to that social group.
End of Euphoria
All this unusual phase of expansion coincided with governments, in a large number of Latin American countries, belonging to the so-called Red Tide, that group of left-wing Heads of State, that made the so- called Socialism of the 21st Century, which for over a decade led the destinations of almost three quarters of the people who lived in the region, about 350 million inhabitants. Thanks to the economic expansion provided by China’s demand for raw materials, public spending grew during the period, burdensome and often free social programs were promoted, but those governments forgot to save by the end of the boom. Not only that, with fiscal co ers brimming with money, many succumbed to the temptation of corruption, including cases heard in Argentina, Peru, Brazil; soon misgovernment, crime, violence broke out.
In 2014, economic bonanza began to decline, but in 2015, China
closed the rst factories of its heavy industry as well as many plants. The euphoria was coming to an end. To the disappointment of many, the Asian country grew only to seven percent, far from 15 percent, the lowest increase in the last 25 years. What made the Chinese situation official to the world was when the leaders began to talk that this new reality would be their “new normality”, a euphemism to refer to the stagnation that would remain for a long time in the second economy of the planet.
As states became impoverished in Latin America, social programs began to be cut. Political and social problems soon broke out and, in that situation, immigration within the region increased from those who had fallen back into poverty or were about to do so, on that slide of booming and decaying wealth. In parallel, that emerging middle class, which was still a oat, indebted, sparsely consolidated, began to react and demand the governments for the restitution of previous living standards.
Citizen Frustration
This began to be clearly re ected in the statistics: while in 2014 there were 46 million poor people in the region, in 2018 they reached 63 million, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC). The greatest increase in extreme poverty happened between 2015 and 2016, while the last increase was one million people between 2017 and 2018.
As a result, the regional ideological map changed radically and the
Montt Latin American Magazine p13
Why Are People Taking to the Streets Across Latin America?