YOUNG VOICES: Latin America becoming economic powerhouse

2013-11-25T00:00:00Z YOUNG VOICES: Latin America becoming economic powerhouseBy Phillip Arteaga nwitimes.com
November 25, 2013 12:00 am  • 

I was visiting a few weeks ago with a friend who had just gotten back from a two-month business trip in Latin America. We were speaking about how Latin American nations are truly growing. The discussion progressed to how they will become the new contenders of the world.

Brazil, for instance, is expected to launch the largest oil well in the world, which will start seeing returns in 2018. By 2020, Brazil is expected to be one of the largest oil exporters. Oil companies such as Royal Dutch Shell PLC and Total SA have swooped in to gain some oil rights. The world’s largest iron mine is expected to create about 30,000 jobs in Parauapebas, Brazil.

Even though Brazil’s economy grew only 0.9 percent last year compared to 7.5 percent growth seen in 2010, in less than eight months, the World Cup will be there. The revenue generated by this event is predicted to add $70 billion to the economy.

Other countries are also generating new sources of income. Argentina has undiscovered riches in their country, primarily huge amounts of oil and natural gas.

Houston-based Schlumberger, one of world’s largest oilfield service company has been in Argentina for more than 50 years, developing this market. It could be an investor’s dream with the untapped resources available.

Venezuela has proven oil reserves of 211 billion barrels. This is the second largest oil reserve in the world. By the year 2015, Venezuelan oil output is expected to be 4.5 million barrels per day. 

In Columbia, the $4 billion Bicentenario pipeline will connect Yopal, Columbia, and new oilfields in Puerto Convenas by 2015.

Peru’s $50 billion backlog of announced gold, copper and other mining activity will stimulate road and maritime infrastructure projects, including a $600 million investment in the Almirante Miguel Grau Port facility.

Even alternative energy companies are looking at Latin America. Enel Green Power plans to have 700 megawatts of renewable capacity in Brazil and 500 megawatts in Chile by 2017. The hotel industry is predicted to grow rapidly increasing its room capacity by 65 percent over the next 10 years to meet the demand of the other growing industries.

Some of the Latin American countries with high unemployment and slow economic growth have provided tax code changes that encourage investment. Overall, the Latin American economy is predicted to grow at a rate of 3.6 percent in 2013, compared with the predicted rate of 2 percent in the United States.

Latin America is up and coming, and it has become a buyer’s market.

As in many cases, when one industry increases, other industries follow. It will be interesting to see the development of this growing market.

Phillip Arteaga, of Munster, is a sophomore at Purdue University Calumet. The opinions are the writer's.

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