Latin America and the Caribbean: Slowing growth
Prosperity in Latin America and the Caribbean has been rising since 2009, but it has stagnated since 2014, resulting in the region’s prosperity falling closer to the global average.
Reasons for the changes in Latin America and the Caribbean’s prosperity are as follows.
- All countries saw an improvement in their market access and infrastructure, with Colombia (68th) improving the most, followed by Panama (48th). Both these countries experienced significant improvements in internet bandwidth, coverage, and usage, and they signed bilateral free trade agreements with the United States in 2012.
- Safety and security improvements in the region are characterised by a reduction in the level of politically related terror and violence, including reductions in the rates of extrajudicial killings and political imprisonment, particularly exemplified by Colombia (152nd), Ecuador (73rd), and Guyana (86th).
- The improvement in education, seen in 20 countries across the region, is exemplified by Peru (63rd), which has enacted extensive reforms to the education system.2 In the last 10 years, secondary education completion rates rose by 24 percentage points, the average number of years women spend in school also increased from 10.6 to 11.6 years, and the literacy rate of the adult population rose from 90% to 94%.
- Governance across the region has weakened, with 15 countries deteriorating. This is evidenced by the recently inflamed political situation in Venezuela (167th), as well as deteriorations in government effectiveness and political accountability in Chile (28th), Haiti (149th), and Nicaragua (137th). On the other hand, Ecuador (109th) and Argentina (53rd) have bucked the trend, both countries rising 24 rankings over the decade.
- Economic quality has declined in aggregate across the region, although this has been driven by a concentrated decline in just 9 of 25 countries. The increased macroeconomic fragility of Venezuela (165th), and declining fiscal sustainability in Brazil (102nd) have driven the decline.