Current trajectory suggests region will struggle to escape middle-income trap
William Bratton November 28, 2021 05:00 JST
Workers arrange blades at an assembly line in Rayong province, east of Bangkok, in April 2016: many of the necessary ingredients for productivity-led development are missing across much of Southeast Asia. © Reuters
William Bratton is author of “China’s Rise, Asia’s Decline.” He was previously head of equity research, Asia-Pacific, at HSBC.
It is easy to forget that it was South America, not Asia, that was once seen as the world’s emerging economic hot spot.
Many of the region’s countries were relatively prosperous in the first half of the 20th century. Argentina, for example, was then one of the world’s richest countries. They also achieved impressive growth rates in the immediate aftermath of World War II.
But South America has fallen far since those halcyon days. The region’s combined gross domestic product, in constant dollar terms, was 22% of the U.S.’s in 1980 but just 17% in 2020. This relative decline is even more stark on a per capita basis. Brazil’s GDP per capita was 22% of the U.S.’s in 1980 but only 14% in 2020, while Mexico’s fell from 25% to 15% over the same period.
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