With the COVID-19 panic grabbing the headline news and with nations in lockdown, long forgotten are the massive protests sweeping the world against corrupt governments, violence, crime, and the lack of basic living standards.
Indeed, the world was sinking into the “Greatest Depression,” as we have clearly delineated in the Trends Journal over the past year.
Now, with the global meltdown from government actions closing down economies, making bad economic situations much worse, nations south of the equator that were already in decline are falling fast.
As global economies retracted prior to the coronavirus outbreak, demand for the area’s bounty of oil, metals, and other raw materials kept sinking lower.
Copper prices are down 11.6 percent this year and oil more than 30 percent. Latin nations had hoped to pick up soybean sales to China as a result of its U.S. trade war but exports have dwindled and soybean prices in the region have fallen more than 10 percent.
With a few exceptions, “The region is wholly unprepared for this,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics. “It is really vulnerable because of the dependence on commodities exports, China, and foreign investment.”
TREND FORECAST: Those three pillars of Latin America’s economy, commodity exports, China, and foreign investments, have all collapsed. With many of the region’s governments already deep in debt, they won’t be able to borrow more or print more cash to keep their economies from crashing.
With the region’s governments fostering tighter crackdowns on protests, once again, Latin America is following the recipe for dictatorships and increased political turmoil that will drive away investment it will need to rebuild its economies.
