Gabriel Garcia Marquez’s masterpiece, “One Hundred Years of Solitude,” was hailed as the first piece of literature since the Book of Genesis that should be mandatory reading for the entire human race. With his use of magical realism, metaphor and shimmering imagery, Marquez essentially compresses centuries of Latin America’s turbulent history into the fatalistically recurring narrative of a fictional town named Macondo. 

Through the multi-generational story of the Buendia family, Marquez illustrates the tragedy of Latin America — its dark colonial past and the difficulties of modernization, its exploitation by the United Fruit Company, the violent political instability resulting from conflicting revolutionary movements whose goals became vague and indistinguishable over time and the absence of political organization and a definitive national identity. Moreover, Macondo shares with the Latin America of past and present a desire for change and progress, yet the cyclical fluidity of time in the story of Macondo demonstrates the tendency for history to repeat itself. 

But something remarkable is happening in Latin America. Economies are growing at an average rate of 5.5 percent, inflation is in single digits, tens of millions of people are climbing out of poverty and the middle class is swelling in size. Elections are now fair and free, and democracy has become the standard almost everywhere. Is Latin America finally emerging from one hundred years of solitude? 

The recent Latin American renaissance is largely due to the voracious appetite of China and India for raw materials, something the continent is blessed with in great abundance, and also because of improvements in economic management which have fostered stability and the expansion of credit from well-regulated banking systems.

Thanks to privatization, foreign investment and deregulation, increased exports have been balanced by a growing domestic market. Agricultural innovation has helped Columbia’s coffee industry diversify into retail with its international chain of Juan Valdez coffee shops, and Chile, Peru and Argentina have all created new fruit and vegetable export industries. 

Brazil has been the most innovative. Embrapa, an agriculture-research institute set up by the military government in 1973, adapted plant and animal varieties to thrive in the tropics so that productivity has increased 150 percent with land use increasing by only 20 percent. Brazil is now the world’s biggest exporter of coffee, sugar, orange juice, tobacco, beef and chicken.

Much of the decline in poverty is the result of lower inflation, which previously eroded the incomes of the poor. In addition, better social policies invented by Latin American democracies like conditional cash-transfer programs have effectively helped the poor. Under such programs a mother receives a small monthly stipend for each of her children so long as the children attend school and are taken for health checks. Longer attendance at school and a better-educated workforce have reduced income inequality.

There is reason, however, for Latin America to remain cautious of its recent economic successes. Manufacturing and services are still inefficient because of poor infrastructure, bad tax designs and regulations, a lack of competition which stymies innovation and a lack of credit — especially to low income individuals who are unable to use their homes as collateral for taking loans. The establishment of property rights would legally recognize their homes and fix this problem.

In addition, there are a number of risks associated with economies that are over-dependent on commodities, which accounted for 52 percent of Latin America’s exports over the past decade. First, commodity prices can be extremely volatile. Second, many commodities are non-renewable. Third, there is concern of “Dutch disease,” a term used to describe the effect of a North Sea gas bonanza on the Netherlands’ economy. Commodity exports drive up the value of the currency and make other sectors of the economy less competitive, leading to a current-account deficit and greater dependence on commodities. Another concern is that many governments will mismanage and irresponsibly expropriate rents (excess profits) generated from the highly demanded production of commodities that are limited in the short run. 

If Latin America avoids becoming complacent and addresses problems of inefficiency that preclude economic growth, then the continent may be able to escape from the recurrent woes of its economic past.

But never far away is the metaphor of history as a circular phenomenon in which humanity is condemned to repeat the same mistakes ad infinitum due to some intrinsic hubris in our nature.

Matt Haemmerle is a junior political science and economics major from Santa Rosa Beach, Fla. He can be reached at [email protected].