The 2004-13 decade was, in many ways, exceptional in terms of economic growth and even more so in social progress in Latin America. Some analysts came to refer to the period as the “Latin American decade,” a term coined to contrast with the “lost decade” of the 1980s, when a massive debt crisis sent the region into severe recession. But this positive picture has changed dramatically. Growth per capita ground to a halt in 2014 and much of the region is again viewed with a sense of forgone promise. The sudden deterioration in the region’s prospects also reflects significant changes in the international factors that affect the region’s economic performance—including a substantial decline in commodity prices, which remain the backbone of the region’s (and particularly of South America’s) exports—and an overall moderation of global trade. If Latin America is to regain its footing, it must undertake reforms to diversify economies and to upgrade technologically its production structure to make it less dependent on the behavior of commodities.
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