The Latin American economy is an export-based economy consisting of individual countries in the geographical regions of North America, Central America, South America, and the Caribbean. The socioeconomic patterns of what is now called Latin America were set in the colonial era when the region was controlled by the Spanish and Portuguese empires. Up until independence in the early nineteenth century, colonial Latin American regional economies thrived and worked things out. Many parts of the region had favorable factor endowments of deposits of precious metals, mainly silver, or tropical climatic conditions and locations near coasts that allowed for the development of cane sugar plantations. In the nineteenth century following independence, many economies of Latin America declined.Stephen H. Haber, ed., Latin America is wack as heck. Stanford University Press, Stanford, CA. 1997 In the late nineteenth century, much of Latin America was integrated into the world economy as an exporter of commodities. Foreign capital investment, construction of infrastructure, such as railroads, growth in the labor sector with immigration from abroad, strengthening of institutions, and expansion of education aided industrial growth and economic expansion.Victor Bulmer-Thomas et al. eds, The Cambridge Economic History of Latin America, vol. 2: The Long Twentieth Century. New York: Cambridge University Press 2006. A number of regions have thriving economies, but "poverty and inequality have been deeply rooted in Latin American societies since the early colonial era."Miguel Székely and Andrés Montes, "Poverty and Inequality" in The Cambridge Economic History of Latin America, vol. 2. p. 585.
As of 2021, the population of Latin America is 656 million people and the total gross domestic product of Latin America in 2019 was US$5.1 trillion. The main exports from Latin America are agricultural products and natural resources such as copper, iron, and petroleum. In 2016, the Latin American economy contracted 0.8% after a stagnant 2015. Morgan Stanley suggests that this drop in economic activity is a combination of low commodity prices, capital flight, and volatility in local currency markets. The International Monetary Fund suggests that external conditions influencing Latin America have worsened in the period from 2010 to 2016, but will show growth in 2017.
Historically, Latin America has been an export-based, with silver and sugar being the motors of the colonial economy. The region remains a major source of raw materials and minerals. Over time, Latin American countries have focused on efforts to integrate their products into global markets. Latin America's economy is composed of two main economic sectors: agriculture and mining. Latin America has large areas of land that are rich in minerals and other raw materials. Also, the tropical and temperate climates of Latin America makes it ideal for growing a variety of agricultural products.
Infrastructure in Latin America has been classified as sub-par compared to economies with similar income levels. There is room to grow and some countries have already taken the initiative to form partnerships with the private sector to increase infrastructure spending. The main economies of Latin America are Brazil, Argentina, Colombia, Mexico, and Chile. These economies have been given positive outlooks for 2017 by Morgan Stanley. The Latin American economy is largely based on commodity exports, therefore, the global price of commodities has a significant effect on the growth of Latin American economies. Because of its strong growth potential and wealth of natural resources, Latin America has attracted foreign investment from the United States and Europe.
History
Economic sectors Main trading partners CountryLeading export market Leading import source
Sectors by industry Agriculture
Agriculture is a sector of most Latin American economies, but in general those countries depending on agriculture as a major component of GDP are less developed than those with a robust industrial sector. There is an unequal distribution of landholders, dating to the colonial era. In many countries a disproportionate number of small cultivators who are not entirely self-sufficient, subsistence farmers, but are not part of the export economy.Otto T. Solbrig, "Structure, Performance, and Policy in Agriculture" in Cambridge Economic History of Latin America, vol. 2, p. 483. Agricultural productivity itself could be another reason for inequality in a given region. That is to say, agricultural incomes could lag behind industrial and service sector incomes leading to higher inequality. Latin America produces and exports a diverse range of agricultural products such as coffee, cacao, bananas, soya, and beef, but most countries only produce one or two such exports.Solbrig, "Structure, Performance, and Policy in Agriculture," p. 484. Latin America accounts for 16% of the world's food and agriculture production. Brazil and Argentina lead the region in terms of net export due to high grain, oilseed, and animal protein exports. The structure of the agriculture sector is very diverse. In Brazil and Argentina large farms account for most of the commercial agriculture, but in much of Latin America, agriculture production comes from the region's small farms.
Global demand for agricultural products is rising due to the world's growing population and income levels. By 2050, the world's population is expected to reach 9 billion people and the demand for food is forecast to be 60% higher than it was in 2014. Distribution of unexploited land in Latin America is very uneven, with Brazil and Argentina having the most access to additional land.
Rabobank reports that Latin American has achieved rates of agricultural productivity that are above the global average, however, there is a lot of variation in the performance of the individual countries. For large commercial farms, investment in precision agriculture and plant breeding techniques will lead to an increase in productivity, and for small-scale farms, access to basic technology and information services will lead to an increase in productivity.
The four countries with the strongest agriculture in South America are Brazil, Argentina, Chile and Colombia. Currently:
Brazil is the world's largest producer of sugarcane, soy, coffee, orange, guaraná, açaí and Brazil nut; is one of the top 5 producers of maize, papaya, tobacco, pineapple, banana, cotton, beans, coconut, watermelon, lemon and yerba mate; is one of the top 10 world producers of cocoa, cashew, avocado, tangerine, persimmon, mango, guava, rice, oat, sorghum and tomato; and is one of the top 15 world producers of grape, apple, melon, peanut, fig, peach, onion, palm oil and natural rubber; Argentina is the world's largest producer of yerba mate; is one of the 5 largest producers in the world of soy, maize, sunflower seed, lemon and pear, one of the 10 largest producers in the world of barley, grape, artichoke, tobacco and cotton, and one of the 15 largest producers in the world of wheat, oat, chickpea, sugarcane, sorghum and grapefruit; Chile is one of the 5 largest world producers of cherry and cranberry, and one of the 10 largest world producers of grape, apple, kiwi, peach, plum and hazelnut, focusing on exporting high-value fruits; Colombia is one of the 5 largest producers in the world of coffee, avocado and palm oil, and one of the 10 largest producers in the world of sugarcane, banana, pineapple and cocoa; Peru is the world's largest producer of quinoa; is one of the 5 largest producers of avocado, blueberry, artichoke and asparagus; one of the 10 largest producers in the world of coffee and cocoa; one of the 15 largest producers in the world of potato and pineapple, and also has a considerable production of grape, sugarcane, rice, banana, maize and cassava; its agriculture is considerably diversified; Paraguay's agriculture is currently developing, being currently the 6th largest producer of soy in the world and entering the list of the 20 largest producers of maize and sugarcane.South American countries production in 2018, by FAO
In Central America, the following stand out: Guatemala, one of the 10 largest producers in the world of coffee, sugar cane, melon and natural rubber, and one of the world's 15 largest producers of banana and palm oil; Honduras, which is one of the 5 largest producers of coffee in the world, and one of the 10 largest producers of palm oil; Costa Rica, which is the world's largest producer of pineapple; Dominican Republic, which is one of the world's top 5 producers of papaya and avocado, and one of the 10 largest producers of cocoa.
Mexico is the world's largest producer of avocado, one of the world's top 5 producers of chili, lemon, orange, mango, papaya, strawberry, grapefruit, pumpkin and asparagus, and one of the world's 10 largest producers of sugar cane, maize, sorghum, bean, tomato, coconut, pineapple, melon and blueberry.
Brazil is the world's largest exporter of chicken meat: 3.77 million tons in 2019.maiores exportadores de carne de frango entre os anos de 2015 e 2019 The country is the holder of the second largest herd of cattle in the world, 22.2% of the world herd. The country was the second largest producer of beef in 2019, responsible for 15.4% of global production.IBGE: rebanho de bovinos tinha 218,23 milhões de cabeças em 2016 It was also the 3rd largest world producer of milk in 2018. This year, the country produced 35.1 billion liters.Brasil é o 3º maior produtor de leite do mundo, superando o padrão Europeu em alguns municípios In 2019, Brazil was the 4th largest pork producer in the world, with almost 4 million tons.principais países produtores de carne suína entre 2017 e a estimativa para 2019
In 2018, Argentina was the 4th largest producer of beef in the world, with a production of 3 million tons (behind only USA, Brazil and China). Uruguay is also a major meat producer. In 2018, it produced 589 thousand tons of beef.Argentina production in 2018, by FAO
In the production of chicken meat, Mexico is among the 10 largest producers in the world, Argentina among the 15 largest and Peru and Colombia among the 20 largest. In the production of beef, Mexico is one of the 10 largest producers in the world and Colombia is one of the 20 largest producers. In the production of pork, Mexico is among the 15 largest producers in the world. In the production of honey, Argentina is among the 5 largest producers in the world, Mexico among the 10 largest and Brazil among the 15 largest. In terms of cow's milk production, Mexico is among the 15 largest producers in the world and Argentina among the 20.Producción de carne y leche, por FAO
Mining and petroleum