LATIN AMERICA Discord is stacking the odds against competitive growth
Feb 01, 2008 | 01:36 PM
The Latin American steel industry's "red alert" on imports of Chinese steel, which grew 35.6 percent to 1.6 million tonnes in the first 10 months of 2007, begs several questions. The most pressing is why the region's steel industry, blessed with abundant local raw materials, is unable to compete effectively in its own backyard?
The region is less vulnerable to external economic shocks than in the past, due in most cases to reduced public debt levels and increased international reserves, according to Latin American economic thinktank Comisión Económica para América Latina y el Caribe. As such, one theory gaining ground is that the main threat to competitive growth doesn't come from the likes of China but from within the region itself.
Glaring disparities and even squabbles between the 23 Latin American nations are, we now hear, holding back the region's overall economic growth and investment levels. Despite the existence of regional trade groupings such as the Southern Cone Common Market (Mercosul) and the Andean Pact, the trend has been to seek national rather than regional solutions to regional problems such as cost increases and rising Chinese steel imports. The consequence of this is that while economic growth since 2003 has averaged 7.5 percent annually in emerging nations and 9 percent in Asia, Latin America is lagging behind at 5-percent growth despite its wealth of raw materials.....
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