"Latin America is an economic failure."
Not anymore. Alan Greenspan devoted a chapter in his memoir to Latin America's proclivity for populist politics, which he defined as a "very special brand of short-term focus, which invariably creates very difficult long-term problems." Greenspan's observations were probably seasoned by the disastrous decade of the 1980s, during which the region suffered from chronic severe debt crises and hyperinflation. Today, Latin America is on a path of remarkable economic stability and growth thanks to macroeconomic policies that have brought low inflation and sustainable public finances.
The global recession was a small bump in the road for most of Latin America. Today, the region is growing at an average of 5 percent per year, inflation is in single digits and fiscal deficits are small. Public debt as a share of GDP is much lower than in the developed world. Chile and Peru are the two countries that stand out in terms of economic performance, but considerable success is also apparent in Brazil, Colombia, Mexico, Panama, and Uruguay. Rating agencies have granted all of them investment-grade status, which means that the risk of a default is extremely low. (Argentina and Venezuela are the two salient exceptions in the region.)
This is not just good luck, but a result of good policies. China's insatiable appetite for the region's natural resources has certainly helped, but the more important factor has been responsible macroeconomic management, a choice widely supported by voters in Latin America. Center-left governments -- like those of former President Luiz Inacio Lula da Silva and his successor Dilma Rouseff in Brazil, former President Michelle Bachelet in Chile, and former President Tabare Vasquez and President Jose Mujica in Uruguay -- have made macroeconomic stability a pillar of their economic strategies.