It may seem hard to believe today, but Brazil and Mexico were once the envy of the world.their economy annual growth of more than 6% From 1951-80, it was almost as fast as postwar growth paradigm South Korea and Japan. Since the debt crisis of the 1980s, Latin America has fallen significantly behind. It has fallen to the bottom of the emerging market category in recent years, underperforming the Middle East or sub-Saharan Africa.

The inability to grow in Latin America has created many puzzling questions and many theories. Low productivity, weak infrastructure, corruption and political instability are recurring themes. Leftist governments in the early 2000s were criticized for not investing enough of the commodity boom to build competitive infrastructure or provide high-quality education and health. The right has been accused of doing too little to address entrenched inequalities, promote effective competition or make taxation fairer.

The coronavirus has brutally exposed Latin America’s limitations; the combined health and economic impact of the pandemic is the worst in the world. Change is now brewing. In a series of key elections, voters in the region turned to incumbents and picked radical newcomers. Peru and Chile lean to the left, while Ecuador, Uruguay and Argentina lean to the right. Brazil and Colombia voted this year.

Fortunately, Latin America’s rich natural resources mean that opportunities abound. The region is rich in two key metals for electrification: copper and lithium. It is home to some of the sunniest and windiest regions in the world and can generate gigawatts of ultra-low-cost electricity to produce and export green hydrogen.

The area is in a middle The tech boom is so big It attracted more private capital than Southeast Asia in the first half of last year. The largest independent digital bank in the world, Nubank, is located in Brazil.Little Uruguay is Leading software exporter.

The U.S. push for production closer to its shores could provide a boost to manufacturing in Mexico and Central America. Brazil promotes the development of globally competitive high-tech agriculture.

To take full advantage of these opportunities, Latin America needs to adopt pragmatic solutions that move away from ideological debate. This should start with the axiom that wealth must be created before it can be shared. A thriving private sector, a fully functioning state, quality public services, the rule of law and foreign investment are all essential elements.

Taxes are too low in some countries, but raising them will only help if the benefits lead to healthier, better educated and more productive citizens and competitive economies. In Latin America, higher government spending often means higher wages and more corruption, not better outcomes.

Citizens in Latin America are increasingly uneasy. Tolerance is minimal for any government that fails to deliver. Their confidence in the elected president is being severely tested.

During the last growth spurt, Mexico was a one-party state, while Brazil was primarily a military dictatorship. If the region is to avoid a plunge back into populist authoritarianism, its new leaders urgently need to demonstrate that democracy can lead to strong, sustainable growth and shared prosperity. This means abandoning dogma and seeking consensus on long-term policies for building effective states, strengthening the rule of law and creating globally competitive economies. time is limited.