India’s boom to benefit S American exporters

MUMBAI: China and India’s rapid growth is a positive for Latin America and the Caribbean as a whole, states a recent World Bank study. Higher commodity prices, driven by purchases from China and India, would benefit exporters of copper and soy in South America.

The study, released on Wednesday, was prepared by World Bank economists Daniel Lederman, Marcelo Olarreaga, and Guillermo Perry.“The robust growth of China and India is not a zero sum game for Latin America and the Caribbean(LACs),” noted Mr Perry.

“The overall regional effects of the larger presence of the two Asian economies have been positive, but the countries have not taken full advantage of the rapidly growing markets in China and India, nor of the global opportunities generated by cheap intermediate inputs and new production networks,” he said.

Today, China’s and India’s share of world exports is 50% more than that of LACs, whereas in 1990 the opposite was true. Export of services by LACs to the US — its main market — is seven times more than China and India put together. On the other hand, the report says that overall gains have been accompanied by some pain.

Some industries, firms and sub-regions are being negatively affected by the rapid growth in China and India, particularly in Mexico and Central America. Some of these industries include industrial and electrical machinery, electronics, transport equipment, and textiles.