The Emerging Central Power in Latin America?

The history of Latin American economy is a tale of many ups and downs, an inconsistent struggle for development which has also caused many political shifts-and, in many cases, troubles. Following a wave of free-market reforms in the 1990s, the region-and South America, in particular-shifted politically from the center-right to the center-left in the early 2000s. The trend, known as the "Pink Tide," profited from the concurrent commodities boom, with Chinese demand for basic products such as soy and iron reaching levels never seen before. The resulting cash inflow allowed Brazil and other countries in the region to reduce inequality and lift millions out of poverty, leading many to believe that Latin America's time had arrived.

But overall, countries chose to focus on fostering consumption rather than investments or increased productivity, and few infrastructure revolutions were made-Brazil being a textbook example. When the global financial crisis finally hit the region (after some delay), the fall from grace was rather brutal. Brazil in particular suffered several years of deep economic recession followed by the current anemic recovery. Brazil and the rest of Latin America is set to grow at much lower rates than the rest of the world this decade, and many of those who left poverty during the boom years have fallen back into economic desperation.