Page 34 - STRATEGY Magazine (G)

Fast Approaching: What Does Latin America’s Future Hold?
After centuries marked by political and social instability, Latin America and the Caribbean are making great strides. The region needs all its leadership, intellectual, and economic resources to address a new crop of chal- lenges, from feeding, educating, and caring for a burgeoning population to addressing environmental issues with a global impact and developing a strategy for growth in the 21st century.
and faster and cheaper transportation. It is estimated that all but about 15 percent of the region’s population will live in urban areas, which will include hundreds of cities as well as six me- ga-cities, with populations in excess of 10 million each, and three emerging mega-cities. Three of the megacities, Rio de Janeiro, Mexico City, and Buenos Aires, will anchor mega-corridors that will be home to 80 million people.
According to a report by the U.S. National Intelligence Coun- cil (NIC), the distribution of political and economic power throughout the region will continue to be dangerously uneven. With regional GDP growth estimated in the neighborhood of
3.5 percent by 2030, the aggregate regional GDP should be in
the area of US $9 trillion, with an annual per capita income of around US $14,000. The NIC predicts that this will boost the size of the middle class and spur consumerism, both of which will create expectations that many governments will be challenged to anticipate and meet.
The subregions of Central America and the Caribbean Basin ?already face significant challenges because their economies have
According to former U.S. Senator Christopher Dodd, “Latin America is a region of growing importance, expanding markets, rich resources, and boundless opportunity. And it is only to the benefit of us in the United States and Europe to embrace a stron- ger transatlantic partnership with the nations of Latin America.” The firms that invest in Latin America and the Caribbean may indeed reap great rewards, but they—and the region’s leadership and people—will confront many challenges along the way.
DEMOGRAPHICS AND POPULATION
The population of Latin America and the Caribbean is expected to reach just over 700 million by 2030. Migration to urban areas will likely increase due to perceived economic opportunity; en- hanced communication opportunities, especially via the internet;
not been as dynamic as those in the rest of Latin America, and they are not growing at a pace to provide sufficient jobs to their expanding populations. A scenario based on some governments’ inability to deal with those challenges sees some countries suf- fering from, or succumbing to, political instability and associated security issues, as well as transnational criminal activity. If the issues are not solved locally, it is likely that they will become regional problems, requiring strong political will for regional res- olution. If the issues prove to be non-responsive to resolution at the regional level, they may ultimately present the United States and other large powers with significant challenges.
SCARCITY OF RESOURCES
Latin America’s abundant yet largely undeveloped natural resources make the region an attractive investment target for established enterprises from other parts of the world. While there is a global demand for products from the region that drives a strong commodities export market, increases in the size and wealth of the region’s population will heighten domestic demand for those resources.
Especially with respect to agriculture and livestock, though, that demand will be hampered by various components of climate change, especially glacial melting, changing rain patterns,
and unexpected change of seasons. Coupled with the declining availability of new land for agricultural production, the region
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