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UPI
3 days ago
- Business
- UPI
Bolivia marks bicentennial amid deepest political, economic crisis
Amid a a variety of national problems, Bolivian President Luis Arce arrives at the bicentennial commemorations of the country's independence in Sucre on Wednesday. Photo by Gabriel Marquez/EPA Aug. 7 (UPI) -- Bolivia marked 200 years as a republic this week, but the atmosphere was far from festive. A deep political crisis, collapsing international reserves, shortages of fuel and U.S. dollars, and a complete rupture within the ruling party overshadowed the bicentennial celebrations. With less than two weeks until the Aug. 17 general election, the ruling Movement for Socialism, or MAS, party -- dominant for the past 20 years -- lacks a unifying candidate. Meanwhile, the opposition, led by businessman Samuel Doria Medina, has capitalized on the crisis and now leads in the polls, though his support remains under 20%. During official celebrations on Wednesday, President Luis Arce avoided any mention of the institutional crisis facing the country and instead focused on defending his economic model. His speech sought to link Bolivia's bicentennial with the political project MAS has promoted since 2006, rooted in the popular movement. Arce reaffirmed the principles of a pluralistic economy, the 2006 nationalization of hydrocarbons, state control over strategic resources and the push for industrialization as essential to achieving economic independence in Bolivia. According to a recent report by the Economic Commission for Latin America and the Caribbean, of ECLAC, Bolivia maintains an expansionary fiscal policy, but it is built on unsustainable foundations. One of them is the subsidy on hydrocarbons, which has weakened the government's ability to respond to other social needs. GDP growth is projected at 1.4% in 2025, with a further slowdown to 1.1% expected in 2026. "An expansion insufficient to reduce poverty, create formal employment or sustain public finances," the report warned. ECLAC warned that the policy "has deteriorated public accounts" and that maintaining it "severely limits fiscal space." The problem is compounded by an economy heavily reliant on gas and minerals, with little progress in diversifying production. "Subsidies must be urgently reviewed," the organization said. In 2024, public spending remained high, while fiscal revenue declined due to lower natural gas output and an unfavorable international climate. Bolivia holds one of the world's largest lithium reserves, but production in 2024 reached only 2,000 tons -- far short of the 150,000-ton goal. The industry has struggled to grow amid institutional instability, lack of transparency in international contracts and limited investment. One of the most alarming indicators for analysts is the level of Bolivia's net international reserves. The country ended 2024 with just $1.976 billion -- only $50 million of it in liquid foreign currency. Adding to this is growing social unrest, as sectors including transportation, agribusiness and commerce report fuel shortages, import restrictions and an economy increasingly strained by soaring food prices. Widespread distrust in Bolivia's electoral, judicial and oversight institutions has deepened the perception of a country adrift. To complete the picture, former President Evo Morales -- barred from running again by the Constitutional Court and lacking official party backing -- called from his stronghold in the Tropic of Cochabamba for voters to cast null ballots in the Aug. 17 election. In a message released during the bicentennial, Morales described the null ballot as a "democratic rebellion" and a referendum against what he called a "delegitimized" election, designed to favor the ruling party and preserve an "old elite democracy" that excludes the people. His supporters, including loyal lawmakers, have opened campaign offices in regions such as Santa Cruz and claim null ballots will exceed 60%, warning: "Without Evo, there are no elections."
Miami Herald
4 days ago
- Business
- Miami Herald
Latin America's 2025 growth forecast rises slightly
Aug. 6 (UPI) -- The Economic Commission for Latin America and the Caribbean, or ECLAC, has raised its 2025 regional growth forecast to 2.2%, up from the 2.0% estimate issued in April. The slight increase is due to improved economic performance in the first quarter of the year, although the agency warns the region remains stuck in a prolonged period of low growth. In its updated outlook released Tuesday, ECLAC projects Latin America's GDP will grow by 2.3% in 2026. However, the agency cautioned that growth prospects vary significantly across countries and subregions. South America is projected to lead regional growth in 2025, with gross domestic product expanding 2.7%, driven by recoveries in Argentina and Ecuador, faster growth in Colombia and strong performance in Paraguay. Still, other South American economies are expected to slow compared to 2024. In contrast, Central America and Mexico are forecast to grow just 1.0% in 2025, down from 1.8% the previous year, due largely to weakening external demand -- particularly from the United States. Even so, Guatemala, Panama and the Dominican Republic are expected to maintain growth above 3.5%, supported by a strong services sector and rising remittances. In the Caribbean, excluding Guyana, growth is projected at 1.8% in 2025 and 1.7% in 2026. The region continues to struggle with declining tourism, high energy and transport costs, and heightened vulnerability to natural disasters. In contrast, Guyana is expected to maintain strong growth, fueled by continued investment in the oil and gas sector. Globally, ECLAC anticipates an adverse economic environment marked by geopolitical tensions, economic fragmentation, restrictive financial conditions and slowing global trade. Rising current account deficits and increased reliance on external capital are adding to Latin America's vulnerability. The report also projects a slowdown in job creation. Although the regional unemployment rate is expected to hold steady at about 5.6%, the pace of job growth is likely to weaken, while informality and gender gaps in the labor market persist. Inflation is forecast to remain stable at around 3% in 2025 and 2026, though the report warns that risks of renewed upward pressure remain. Copyright 2025 UPI News Corporation. All Rights Reserved.
UPI
4 days ago
- Business
- UPI
Latin America's 2025 growth forecast rises slightly
Workers rest at a construction site in Buenos Aires in 2024. South America is projected to lead regional growth in 2025, with gross domestic product expanding 2.7%, driven by recoveries in Argentina and Ecuador, faster growth in Colombia and strong performance in Paraguay. File Photo by Juan Ignacio/EPA Aug. 6 (UPI) -- The Economic Commission for Latin America and the Caribbean, or ECLAC, has raised its 2025 regional growth forecast to 2.2%, up from the 2.0% estimate issued in April. The slight increase is due to improved economic performance in the first quarter of the year, although the agency warns the region remains stuck in a prolonged period of low growth. In its updated outlook released Tuesday, ECLAC projects Latin America's GDP will grow by 2.3% in 2026. However, the agency cautioned that growth prospects vary significantly across countries and subregions. South America is projected to lead regional growth in 2025, with gross domestic product expanding 2.7%, driven by recoveries in Argentina and Ecuador, faster growth in Colombia and strong performance in Paraguay. Still, other South American economies are expected to slow compared to 2024. In contrast, Central America and Mexico are forecast to grow just 1.0% in 2025, down from 1.8% the previous year, due largely to weakening external demand -- particularly from the United States. Even so, Guatemala, Panama and the Dominican Republic are expected to maintain growth above 3.5%, supported by a strong services sector and rising remittances. In the Caribbean, excluding Guyana, growth is projected at 1.8% in 2025 and 1.7% in 2026. The region continues to struggle with declining tourism, high energy and transport costs, and heightened vulnerability to natural disasters. In contrast, Guyana is expected to maintain strong growth, fueled by continued investment in the oil and gas sector. Globally, ECLAC anticipates an adverse economic environment marked by geopolitical tensions, economic fragmentation, restrictive financial conditions and slowing global trade. Rising current account deficits and increased reliance on external capital are adding to Latin America's vulnerability. The report also projects a slowdown in job creation. Although the regional unemployment rate is expected to hold steady at about 5.6%, the pace of job growth is likely to weaken, while informality and gender gaps in the labor market persist. Inflation is forecast to remain stable at around 3% in 2025 and 2026, though the report warns that risks of renewed upward pressure remain.
Reuters
17-07-2025
- Business
- Reuters
Latin America's foreign direct investment rose 7% last year, but new flows stagnate
SANTIAGO, July 17 (Reuters) - Foreign direct investment (FDI) in Latin America grew by 7.1% in 2024 to $188.96 billion, but new investment interest has stagnated, the Economic Commission for Latin America and the Caribbean (ECLAC) said on Thursday. FDI is a key driver of economic growth in Latin America, but lack of new investment has raised concerns about the region's long-term competitiveness and appeal to foreign investors. "It is expected that changes in tariff and trade policies in the United States will influence medium- and long-term investment decisions," ECLAC said in its report. FDI inflows in 2024 rose 7.1% from 2023, representing 13.7% of gross fixed capital formation and 2.8% of GDP. However, these figures remained below the 16.8% and 3.3%, respectively, recorded during the 2010s. Brazil received the largest share of FDI at 38%, followed by Mexico with 24%. Argentina saw a 44% increase in natural resource investments, while Guyana experienced a 43% rise due to more spending in its hydrocarbon sector. ECLAC urged Latin American governments to focus on strategies that sustain investor interest, particularly as manufacturing investment rises and services decline. The region may need to adapt to global tariff changes and reconfigure value chains to stay competitive.
Miami Herald
11-07-2025
- Business
- Miami Herald
The AI revolution is leaving Latin America behind. Can the region catch up?
A new study has left me wondering whether Latin American leaders are wasting their time on trivialities instead of tackling the region's biggest threat — its catastrophic lag in artificial intelligence (AI). Latin America makes up 6.3% of the world economy but accounts for only 1.6% of global investment in AI, according to the study commissioned by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). It's the region investing the least in AI. While the United States spends $78 billion a year, Asia $61 billion, Europe $22 billion and the Middle East and Africa combined $3.6 billion, Latin America invests only $2.6 billion a year in AI, the study says. Even worse, AI investments fell in Brazil, Argentina, Colombia and Peru between 2019 and 2023, the study says. Brazil currently leads the region's AI spending with $1.1 billion, followed by Mexico ($660 million), Chile ($163 million), Argentina ($146 million), Colombia ($136 million) and Peru ($77 million.) Despite these sobering numbers, there's relatively little public debate in the region about its AI challenges. I follow Latin America's news daily and rarely see presidents warning about the dangers of remaining passive amid the greatest technological revolution in centuries. Recently, several top tech entrepreneurs told me that Latin America is so far behind in AI that it should focus on its competitive advantages: food, other commodities, energy and tourism. Countries should stick to traditional exports and add value to them, they argued. Luis Von Ahn, the Guatemalan-born billionaire who founded the CAPTCHA online security test and the 500 million-user Duolingo language platform, told me he doesn't know of a single large language model developed in Latin America — not even a more modest version of ChatGPT, Gemini, Perplexity or China's DeepSeek. 'Everything is being done in the United States and China, and a bit in Europe,' he said. Even more worrisome, some Latin American countries are investing in call centers and customer support firms, industries doomed to be replaced by AI, he warned. 'That's a huge waste of time. Call centers are likely to vanish within five years,' he told me. When I asked him what Latin American countries should do, Von Ahn recommended developing AI applications to make key industries like agriculture and tourism more efficient. 'Even with the smartest AI, tourism will survive and humans will keep eating avocados,' Von Ahn told me. 'That's where I'd focus, not on outsourcing.' Raúl Katz, co-author of the new ECLAC study and director of business strategy research at Columbia University's Institute for Tele-Information, told me that — whether in traditional or new industries — countries have no choice but to invest in AI adoption. 'If Latin American companies don't ramp up AI use in billing, logistics, distribution and supply chain processes, they'll fall even further behind and so will their countries' economies,' Katz warned. The region's biggest problem is that more than 95% of its companies are small or medium-sized firms, which lack the money or skilled staff to adopt AI and boost productivity. Building data centers matters, but 'the main obstacle isn't infrastructure — it's companies' capacity to adopt new technologies,' he said. The solution, he added, is to invest in tech institutes across each country to help small businesses adopt AI, like Germany and Japan do, and to boost college graduation rates. While 52% of Americans over 25 have a college degree, only 22% of Brazilians and Mexicans do, according to ECLAC. Asked about Von Ahn's suggestion to focus on food and tourism, Katz said that AI adoption is essential even there. 'To add value to your agricultural exports, you'll need AI,' he said. 'There are many ways in which you can increase your yields in agriculture using AI to measure the soil's humidity and estimate how much fertilizer or seeds you will need.' In short, Latin America's choice isn't between commodities or technology. It's about adopting AI to boost productivity across all industries. If Latin America keeps sleepwalking through the AI revolution, it will face massive job losses, slower economic growth and a new wave of migration. Either the region puts AI at the top of its agenda, or its future will look grimmer than its present. Don't miss the 'Oppenheimer Presenta' TV show on Sundays at 9 pm E.T. on CNN en Español. Blog:
