The key points
- The grain of Argentina and the soy of Brazil
- Markets could still bet on South America
- The EU-Mercosur agreement
Countries rich in natural resources and extraordinary potential. So yes, the Russian-Ukrainian crisis can benefit some Latin American countries. Export restrictions, logistical problems, blocked ports and bombed ones, would allow one of the world‘s granaries, for example Argentina, to gain market positions. And then get back on the wings of an economic recovery.
This is the opinion of Antonella Mori – professor of Macroeconomics at Bocconi University and Head of the Latin America Program of ISPI – who expresses a shy optimism for the subcontinent. A region, although plagued by Covid and very high inflation, which now reveals interesting opportunities for recovery.
Professor Mori, is it the right time for Latin America?
It is always difficult to generalize, but let’s say that I expect benefits for Argentina, Brazil, Uruguay, Paraguay, Colombia, Venezuela. High prices of agricultural commodities and growing demand are two key elements for a recovery. Even if there is the crux of fertilizers, which so far have been imported from Russia and therefore could represent a critical issue.
A breath of fresh air for the Global South after the recessions caused by the pandemic?
Argentina is a major producer of wheat, Brazil of soy. Yes, on paper they should benefit from the collapse of exports from Ukraine and Russia. If we then extend the reasoning to the energy sector, the opportunities multiply: let’s think of the renewable energy sector. Solar, wind and hydrogen are areas in which Latin America can be the ideal partner for Europe
Commodities allow governments large collections. And financial markets should welcome the entry of hard currency into still fragile countries. Even if in the past several occasions have been wasted.
The markets have no memory, they look to the potential, which is enormous. And they believe it. So much so that one of the Argentine governments, recently, managed to place a 100-year-old title, the Matusalem bond.