Decades of dealing with Drug Cartels, crime, Communist Revolutions, socialism, bad policies and bad voter choices have led to struggling economies and has put many South America countries at risk.
Countries need to make what they consume. Investments that lead to higher production of goods will add to Nominal GDP and eventually improve the Trade Balance. Developing countries need to increase their ability to produce goods they can export. Trade Deficits signal that the population is not producing what they consume. If they import food from a neighboring country, the import should be off-set by an export of goods to that country if possible. This is reciprocal trade.
There will be times when importing food is necessary to offset shortages due to crop failures. There will be times when trading partner countries have a glut of supplies in certain commodities and want to unload it as an export and prices will go down. Countries that are asked to help with the glut should negotiate for other concessions. There will be times when crops fail and low supply drives prices higher.
If a country easily delivers a Trade Surplus because of continued high demand for their goods, they have more flexibility but need to avoid shifting their trade patterns in ways that would turn them into having Trade Deficits.
Foreign corporations operating in countries to export raw materials are appreciated, but should avoid becoming a corruptive influence. Their goals should include support for good financial management of the countries they have operations in.
When the US began off-shoring its manufacturing in the 1970s, Asia got the lion’s share of the off-shored US manufacturing work. Japan got a good start after 1945 and used the technology they had learned in World War 2 to transfer it to domestic use. They excelled in electronics and automotive industries and more young Japanese were attracted to engineering and math. President Nixon’s strategy to trade with Communist China to weaken China’s ties to Soviet Russia began a transfer of manufacturing to China from the 1980s to present. Now China is viewed in the US as a threat to peace in the Pacific and US companies are leaving.
South American has a chance to take on more US manufacturing based on its proximity to the US, but it is more likely that Trump will reshore high end US manufacturing, especially computer chips, back to the US. Mexico has already taken on the US manufacturing of cars parts and electronics board manufacturing. But Mexico needs to eliminate its Drug Cartels.
South American countries are beginning to work together to reduce crime and improve their economies. Trump is likely to help South American countries to eliminate the Drug Cartels, because the problem has impacted the US with illegal migrants and drug gangs. When neighboring countries have problems, these problems have a negative impact on the region. The UN is not going to help South American countries and these multi-country South American regions are the best bet.
South American countries have strong cultures that don’t necessarily lead to strong economies. They offer a “comfort zone” but these cultures keep the focus on festivals not accomplishments. The focus of citizens in South American countries needs to increase the importance of identifying their skills and interests to drive their education systems. Doing what you are good at and love drives motivation and South America needs citizens to be more motivated for accomplishment. Accomplishment drives productivity. This alignment between citizens and their governments can be measured by how well each country reduces imports and increases exports. Until this alignment takes place, governments will continue to be stuck between fighting poverty and increasing opportunity. Teaching how to fish can replace handing out a fish.
Norb Leahy, Dunwoody GA Tea Party Leader
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