Hitting Below the Border

With 17 (and rising) European Union states in formal recession, with even France getting a credit rating downgrade, violent street protests and work stoppages in protest against the German-pressured austerity programs that got them there and a debt crisis that defies near-term solution, Europe’s economic prospects are not looking so hot. As China reins in its growing economy to focus on internal growth, moving more to their centrally-dictated economic policy that is pressuring middle-level companies into larger governmentally-controlled formats, and as a new leadership drills down on spreading the wealth to those provinces that have not enjoyed the growth of the coastal regions and defeating epidemic corruption, China is even less concerned with leveling the playing field to accommodate American demands. Russia… well… they really don’t like us very much and laugh every time we trip or stumble. And Japan seems to define economic contraction; their last good economic year was 1991.

Meanwhile, back in this hemisphere, bleak prospects are brightening fast. Canada seemed almost immune to the foibles of the big downturn, with conservative banks, no real housing collapse and a continued strong development of natural resources and cutting edge technology. They can vaguely remember the time when their dollar, now on parity with the U.S. dollar, was once a fraction of what it is worth today. Nice to have a friendly neighbor like that. But the real shining beacon of economic growth seems to be just about everywhere else in our side of the world.

As Hispanics flexed their voting muscle in the recent election, literally becoming the deciders in the presidential race, they are helping to refine who we are in the 21^st century. Not counting the almost 4 million residents of Puerto Rico, there are well over 50 million persons of Hispanic ethnicity (almost 17% of the total population) in the United States. While border states used to be associated with that Latin bent, Hispanics have large and successful communities all over America, with particularly large representation in places like Chicago. Did President Obama’s executive order allowing a more flexible immigration policy represent a “gift/bribe” to such voters, or was there a profoundly selfish aspect to this policy shift… one that would make Scrooge McDuck rub his hands in monetary glee?

Mexico and Brazil are huge economies with major populations. Both are major players in the petroleum world, along with Venezuela that has some of the largest known oil reserves on earth. Hugo Chavez isn’t forever! Brazil’s massive recent off-shore oil discoveries have created the B in BRICS (the super-economic powers of Brazil, Russia, India, China & South Africa, some of which are having “difficulties” of their own… but definitelynot Brazil) and in CARBS (the resource-rich nations with working markets: Canada, Australia, Russia, Brazil and South Africa). Cuba’s universal education has created a future potential for educated labor, valuable as the United States nears the time when diplomatic relations can be normalized.

While polarized wealth disbursement (sounds like where the U.S. is headed) and chronic corruption have taken their toll on these nations’ growth, as struggles with the narco-trade has put the damper on several of these states, the reality remains that Latin America, to the extent not already developed, may be the next China, in terms of cheap labor and vast resources that will slowly build some of these states into superpowers. New educational standards and their natural resources, found and unfound, will make many of these nations rich. Middle classes will continue to expand as Portuguese and Spanish-speaking nations rise to take their rightful place among the world’s success stories. It won’t be an easy path for many, but the potential is clearly there (if not already on an explosive growth path).

The U.S. seems to have placed Latin America on a back burner in recent years, focusing on turmoil in the Middle East, the growth of the Asian tigers and our old world ties to Europe. But as America’s ethnic complexion changes, it may be high time to use our new ethnic face to embrace our own pool of golden sunshine to the south. We need to mend fences, open doors and take Latin America seriously… perhaps moving our relations with that part of the world to a new heightened priority. It is most certainly in their best interest… and ours. Not through our traditional domineering and arrogant methods… but treating them like true partners in what could be staggeringly solid economic growth for our entire hemisphere.

I’m Peter Dekom, and there is gold in them thar hills… and some long-term joy in helping make our hemisphere a better place for those who live in it.