Latin America: Commodity dependence can lead to Sustained Growth, World Bank report argues

MIAMI - Traditionally considered a curse for a nation˜s development, commodity wealth in Latin America and the Caribbean (LAC) couldon the contraryrepresent a foundation for prosperity, according to a new report released today by the World Bank. The increased demand for minerals and agricultural commodities from Asian markets, especially China, is contributing to a rebound in economic growth as the region leaves behind the global crisis, according to the flagship publication "Natural Resources in Latin America and the Caribbean: Beyond Booms and Busts?" According to the report, in Latin America there has been a substantial shift from exporting commodities to advanced economies to trading instead with emerging economies. For example, the United States˜ share as a destination market declined from 44 percent in 1990 to 37 percent in 2008the latest year for which data is available, while China˜s share rose over tenfold during the same period, from 0.8 percent to 10 percent of total commodity exports. China is Brazil˜s most important market for commodity exports, accounting for almost a fifth of total commodity exports in 2008. If properly managed, the windfall from this commodity-led recovery can help LAC seize this growth opportunity by providing governments with greater fiscal space and serving directly as a key source of growth.