But Mr. Guerria is more optimistic. With the help of Chinese investment in infrastructure projects throughout the region, “Latin America is tapping into global markets,” says Guerria, who formerly headed Mexico's Finance Ministry and Foreign Affairs Ministry. Integration with the global economy "is absolutely integral," he says, and it will be key toward realizing a “Latin America decade."
The first transcontinental highway is to open later this year. It will connect Brazil to Peru's Pacific ports for the first time and bring it closer to the economies of China, South Korea, and Japan. Only about 25 percent of the region's roads are currently paved, compared to the 80 percent average among OECD nations, says Guerria.
Region must boost education, equality
But Chinese investment won't alone guarantee success. "I'd like to inject some caution into our discussions,” Guerria said in an April 2 speech at a business conference on Latin America at the Massachusetts Institute of Technology (MIT) in Cambridge, Mass. “This will not be Latin America's decade if Latin American countries continue to top global rankings of inequality.”
The region must boost educational standards and social programs while tackling income inequality, lax tax collection, and weak rule of law, he said.
Guerria called it unacceptable that the region's richest 10 percent earn 40 percent of all income, while the bottom 10 percent earn 1 percent of all income. This inequality is exacerbated by problems with taxation and social programs, he said. “Before taxes and transfers for social security, inequality is not much different between United States, Europe, and Latin America.”