Latin America: Facts and Fiction

Posted on March 9, 2012


After criss-crossing 15 Latin American countries during the last 7 months, we are towards the end.  The continent has left us with many impressions – some puzzling and others simply leaving us with lifelong memories and good reasons to return.

Expecting bad roads, unsafe travels and poverty, Latin America has positively surprised me. With some very honorable exceptions and with great excitements for the drivers amongst other in Guatemala, Colombia and  Bolivia, the roads and infrastructure have generally not been bad at all. We have also felt safe and while remaining vigilant at all times, we´ve only lost 2 backpacks….. mostly due to my own naive ignorance of the most basic security-rules. Also, I´m pleased to report that we have seen little outright poverty or suffering along the road.

Crossing a bridge near Aguascalientes, Peru

Crossing a bridge near Aguascalientes, Peru

Trained as a “numbers-man”, I was of course too tempted in these days with internet access in remote places, to avoid taking a quick look at the numbers to get a better understanding of what we have observed. Table 1 below, summarizes some key indicators, and yes the numbers do tell quite an interesting story. The GDP/capita figures illustrate great variance between the countries, with Mexico, Panama, Chile, Uruguay and Argentina in a class by themselves. These countries have     more developed economies, considerably higher wellfare and less urban-rural differences than the other countries and particularly so in the case of Nicaragua, Honduras and Bolivia. Also notable, is the indicators for literacy and fertility which perhaps not too surprisingly seem to correlate with level of literacy. That is low literacy correlates with high fertility, though the direction of causality may only be speculated. What is also clear from the population-numbers is the dimension of Latin America´s population (517 million inhabitants in the countries we have visited) – this is a big market with still large unpopulated areas.

Salar de Uyuni, Bolivia

Salar de Uyuni, Bolivia

Driving through the deserts of Northern Argentina

Driving through the deserts of Northern Peru

Table 1 also serves to illustrate the countries´ individual levels of development and, with reference to the literacy-level in several of the countries, how a further strengthening of the educational sector alone may impact the economic- and social development. Much has taken place, but Latin America still has ways to go and a great potential.

Finally, the differences in economic growth among the Latin American countries and the comparable number for the EU-average are notable and depending on your time-perspective, may be in a suprising way. While the simple average for all the countries visited is almost 4,6% for 2010-2011, the comparable average number for the EU is only 1,8%.  Simply for sake of comparison, I have also added the indicators for Mozambique, one of the African countries we visited at the start of our trip. Firstly, it is interesting to note that all of the Latin American countries simply based on the indicators, seem to be faring far better than their African neighbor which shares the history with Brasil of being a former Portuguese colony. However, it is equally interesting, while somewhat puzzling to note, that the economic growth in this relatively poor country nevertheless had (granted possible measurment- and administrative errors) an economic growth as high as 8% in the same period and thus considerably higher than the comparable average for the country we visited.

In earlier blogs I have commented on entrepreneurship and the relevance of forming an entrepreneurial mindset and positive orientation towards business creation particularly among the young. Here the definition of entrepreneuship is not important – my only focus is on the creation of business activity and employment. I am fairly well acquinted with the various theoretical perspectives on entrepreneurship, however, my observations during the last months make me question the relevance of  entrepreneurship theory in the way it´s presented at most business schools or universities. What is needed in many Latin American countries is very broadly speaking practical hands-on drive to wish to create new businesses and services. What is also needed, many places, is of course, financial-  and technical resources to invest in infrastructure. In Colombia for instance, as good as all inland domestic transportation is by road and on roads in very poor condition.   Reportedly, it takes more time to ship a truckload of computers from Cartagena to Bogota, than from Hong Kong to Bogota. What is needed is interdiciplinary knowledge – business, admisintrative, as well as, can do technical competence to solve problems and prevent them from occuring in the first place  – often  in combination. Here, there is frankly little need for “entrepreneurship” theory except perhaps as part of a university course. What is most called for is creativity, drive and motivation to “do something” to improve the day-to-day experiences of life in form of businesses and services!

Many times during our tour through Latin America, we have been touched by how helpful and friendly people are and how the human factor differs from one country or geographic region to the next. People living on the coasts are usually “more social” than people living in or close to the mountains or “altiplano” and people living in warm climates are “warmer” than those living in more chilled areas. Of course, these are very broad generalizations, but we have perceived some of these differences, often unable to describe them by words. Nevertheless we have all-in-all been positively surprised by peoples´ positive attitudes to overlanders as ourselves, particularly after realizing that we (read: me) are not “gringos”. Also, the Barca-sticker on the car has sometimes helped to  stimulate a soccer-conversation even sometimes during the most tedious and beurocratic border crossing. In Latin America soccer is as much culture as in Spain and Barca is well renowned…..

During our travels, we have met several what we call angels. Our angels are people we come across by chance and who go out of their way to offer us a hand when we are lost (which is not completely uncommon as the team voted down my proposal to install GPS-maps for many of the countries we have travelled). And this is, after all, a democratic voyage where no-one, at least in principle, has the right of veto… After hiking the Malinche in Mexico and not able to start the car, the angel was in form of a local cofee-owner and his little son who soon found the appropriate tools and got the car running. In Ipiales, when looking for suitable lodging, the angel rode a motorcycle and lead us along to a motel. In ……, Honduras, the angel was in form of a young lady leading us out of the wrong neighborhood and to a motel for he night as night was falling and the rain was pouring down. In Cartagena, Colombia, there was a whole bunch of angels as a police-truck guided us out of town as part of their morning patrol and leading us through neighborhoods we otherwise would not have seen. In Popayan, the angel was the young woman at the reception desk, who helped me by sending the insulin bag, which I had forgotten in the refrigerator, to Pasto the following day by bus. She might not even know it, ,but she´s a true angel too…!

One of the reasons that we so much have enjoyed our stay in Latin America has been that we culturally and linguistically feel  at home. With the exception of Brasil, Spanish is spoken and/or understood everywhere and most countries share not only history and religious traditions, but also often also arquitecture and other administrative systems. However, while we might believe that we are culturally and linguistically calibrated, differences still exist and it might be wrong to think that a general understanding of language and culture is sufficient – most often it takes considerable time to fully understand local idiosyncrecies and language is far from enough to go “native”. Nevertheless, it is no doubt that from a business-perspective, ability to communicate in Spanish and/or Portuguese is an important step in  the overall cultural calibration necessary to function more or less effectively in these markets. However, it´s important to be aware that knowing the language does not mean that you understand the wider cultural context.

This blog is written while in Rio de Janeiro, Brazil. A beautiful and diverse city buzzing with life. But also a city with large and obvious differences between the haves and the have nots. Rapid economic growth is great, but from Copacabana to Ipanema we have, however, not only seen  beautiful people, but also more beggars and misery than in any other Latin American city.

Oyvin – Rio de Janeiro

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