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Economy

Latin America Must Break The Commodity Curse

The death of Hugo Chavez, who propped up Venezuela with oil profits, is another reminder that Latin America needs to look for economic development beyond natural resources.

Aluminium mining in Brazil
Aluminium mining in Brazil

SANTIAGO - There are a lot of Latin American countries complaining about their overvalued currency, which strips them of competitively in the export market and allows their markets to be invaded by cheap imports.

One of the problems is Latin America’s built-in treasure. The region is rich in natural resources, and the current economic boom in Latin America is largely thanks to the high prices for many of the commodities that Latin America exports.

At the moment, over 90 percent of Latin Americans live in countries that are commodity exporters. That number includes Mexico, which has managed to diversify its economy but continues to rely on petroleum exports for a large portion of government revenues.

The truth is that the economic history for many countries in Latin America is closely connected to the rise and fall of commodity prices. In Ecuador, for example, there is the cacao era, the banana era and the oil era. In Chile, miners at the beginning of the 20th century rode the riches of the saltpeter (a key ingredient in fertilizers) boom, but the prices crashed in the 1920s as it was replaced by synthetic ingredients. That brought poverty and political instability to the whole country until world demand for copper brought back relative prosperity.

Latin America’s dependance on commodity exports also explains why the region suffered so little during the 2008-2009 global financial crisis. When the rich countries entered an economic recession, Latin America was able to keep growing thanks to the demand for raw materials from China.

The rise of China and other developing countries over the past decade, together with the stable demand from developed countries, has kept commodity prices shooting upward, flooding our countries with dollars. This abundance has helped the dollar become even cheaper, making imports easier. But this, of course, has made it harder to export products that are not raw materials.

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Society

Urban Indigenous: How Peru's Shipibo-Conibo Keep Amazon Culture Alive In The City

For four years, indigenous photographer David Díaz Gonzales has documented the lives and movements of his Shipibo-Conibo community, as many of them migrated from their native Peruvian Amazon to the city. A work of remembrance and resistance.

For Shipibo-Conibo women, sporting a fringe is usually a sign of celebration or ceremony.

Rosa Chávez Yacila

YARINACOCHA — It was decades ago when the Shipibo-Conibo left their settlements along the banks of the Ucayali River, in eastern Peru, to begin a great migration to the cities. Still among the largest Amazonian communities in Peru — 32,964 according to the Ministry of Culture — though most Shipibo-Conibo now live in the urban district of Yarinacocha.

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