A Few Not-So-Crazy Ideas for Latin America in 2010

Andres Oppenheimer

Now that it's 2010, let me share with you some of the things I learned over the past 12 months while writing my columns on Latin American affairs. Some of them are surprisingly simple, but could make a big difference.

Here they go, in no particular order:

-- We need a GEP (I'll explain in a minute.) Right now, economists measure how countries are doing by looking at their gross domestic product, or GDP. But Latin America will never solve its poverty problem unless it improves its educational standards, because -- no matter how much their economies grow -- the benefits of growth tend to stay among those with enough education to enter the formal economy. It's time to create a Gross Educational Product, or GEP.

-- Get into the ideas market. While the bulk of Latin American exports are raw materials or light manufacturing, the world economy is increasingly rewarding those who create new concepts. Innovation is the name of the game.

During recent trips to Peru and the Dominican Republic, I learned that local textile manufacturers who produce finished polo shirts and jeans for Ralph Lauren, Calvin Klein and other major firms get less than 20 percent of the retail price of the garments they sell in the U.S. market. Eighty-five percent goes to the people who produced the branding, designs, advertising and other non-manufacturing functions.

Likewise, Latin American coffee exporters get less than 5 percent of the retail price of a cup of their coffee in the U.S. The bulk of the profits goes to those who do the genetic engineering, processing, labeling and branding.

FOSTERING TRADE

-- Expand free-trade deals outside the region. Latin America and the Caribbean account for about 5 percent of world trade, pretty much the same as 30 years ago. Asia's share of world trade, meanwhile, has increased from 6 to 23 percent over the same three decades. And Asia's chunk of world trade will grow even faster starting Jan. 1 when a mega free-trade agreement between China and the 10-country Association of Southeast Asian Nations (ASEAN) goes into effect.

This means that Latin America -- and the United States and Europe, as well -- will find it even harder to export to Asia. If Latin American countries don't sign new free-trade agreements with the world's largest economies, they will be limited to their regional market, and condemned to continued stagnation.

-- Teach English, Portuguese and other foreign languages for free. In recent trips to Finland, Sweden and Israel, I was surprised by the answer I got when I asked why so many people speak English, making it easier for their countries to insert themselves into the global economy. Many people told me, "Very easy: We don't dub the cartoons on TV!" In other words, children grow up watching cartoons in English.

As China and other Asian countries begin to teach mandatory English starting in third grade -- most Latin American countries begin teaching English at seventh grade -- it wouldn't be a bad idea for Latin American countries to stop dubbing their TV cartoons. And the same goes for the U.S., where non-Hispanic children could benefit from Spanish-language cartoons on English-language channels.

-- Create a common Latin American visa. With China preparing to send 100 million tourists a year to the rest of the world by 2020, and large numbers of foreigners expecting to go to Brazil for the 2014 World Cup of soccer and 2016 Olympic Games, Latin Americans should sign a deal for a regional visa for foreign visitors.

LOOKING FORWARD

My conclusion: I know, many of you must be thinking that I've lost my marbles and that in a region where some countries such as Venezuela and Bolivia are trying to ban foreign languages to revive indigenous tongues of a mythic past, or reduce economic ties with the United States and the European Union to focus inward, most of these ideas are wishful thinking.

But I'm an optimist, and I believe that most Latin American countries want to embrace modernity. And perhaps under the influence of the holiday spirit, my levels of hopefulness have risen even higher. So I wish you happy holidays, and let some of these wishes come true!

NEWS & CURRENT EVENTS ...

Latin America: A Few Not-So-Crazy Ideas for Latin America in 2010 | Latin America