Implications of a new century in Latin America (part 1): Overview

Jon Aldous 기자 승인 2023.11.20 15:43 의견 0
McKinsey Global Institute Analysis

The current global turmoil, though seemingly unparalleled, echoes past periods of significant upheaval, each leading to the emergence of a distinct new era. The most recent period saw the expansion of global value chains and a rapid surge in digital technologies, fueling growth and development underpinned by macroeconomic stability, benefiting billions worldwide.

In contrast, Latin America's progress was less pronounced. The region stayed somewhat detached from global economic integration, lagged in adopting new technologies, and didn't position itself at the forefront of innovation. This resulted in comparatively moderate growth, with certain economies grappling with debt and inflation challenges.

Looking ahead, the world is transitioning from a unipolar to a multipolar landscape, with new influential players emerging. This shift brings both opportunities and concerns, particularly in technology. This new phase is characterized by an aging population, increasing inequality, efforts to reduce emissions amidst soaring debts, and decelerating growth.

As Latin America confronts the uncertainties, its leaders and decision-makers are positioned not just to adapt to but to actively shape this forthcoming era.

Over the last two and a half years, a series of extraordinary events have significantly disrupted societies and businesses, posing substantial challenges to the global economy. Drawing from historical insights, it is proposed a framework to understand the impact of current disruptions and anticipate future developments.

This essay focuses on the potential implications of such a global shift for Latin America, a region deeply impacted by these global events. Latin America has faced severe challenges due to economic crisis, escalating inflation affecting low-income groups, and growing political polarization. Like the rest of the world, the region is navigating a period marked by volatility and uncertainty.

The current world of Latin America includes the post-World War II period (1944–46), the oil crisis era (1971–73), and the dissolution of the Soviet Union (1989–92). Each of these periods transformed the global landscape and initiated distinct eras: the Postwar Boom (1944–71), the Era of Contention (1971–89), and the Era of Markets (1989–2019). These eras witnessed profound economic and social transformations. By 2019, the world had undergone significant changes over the past two decades, but the foundational landscape was relatively stable. All the signs show that a new era is going to emerge not only in Latin America but in the whole world.

During the Era of Markets, the world experienced a surge in global economic interconnectedness and rapid digital technology adoption. Latin America, however, did not keep pace with these trends. The region's global trade grew, but not as quickly as countries at similar development stages. Predominantly exporting primary goods, Latin America has limited participation in global value chains. Moreover, while many developing economies, especially in East Asia, reached or exceeded OECD levels of digital adoption, Latin America's gap with OECD countries widened.


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