The open veins of Latin America: Long-term physical trade flows (1900-2016)

Abstract

Latin America has long played a key role in the global provision of natural resources. Most of the continent's economies are net exporters of low-value, primary products and importers of manufactured goods at a high price. This pattern of specialised trade has highly negative consequences for economic development, the environment, and the local population's wellbeing. Yet to date, little empirical evidence has been collected on Latin America's total contribution to the rest of the world's regions in historical perspective. Applying the Material Flow Accounting methodology, this paper estimates the physical and monetary trade of 16 Latin American economies between 1900 and 2016. Our results show that: (i) yearly net exports of materials went from 4 Mt to 610 Mt between 1900 and 2016, and greatly accelerated since the World War II. (ii) Latin America is a net exporter of most types of materials (fossil fuels, non-energy minerals and biomass), so it harbours socio-environmental problems associated with different types of extractivism. (iii) Different regional export patterns exist: Andeans export subsoil (mining and energy carriers) while the rest export soil (land-based products). The countries with the lowest net exports are the smallest in size and with the highest population density. (iv) Europe and the USA have historically received most of the imports, but since the end of the twentieth century, the Southeast Asia region is the biggest importer of materials from Latin America. (v) The price received for exported material is much lower than the price paid for imported material; and (vi) various historical periods can be differentiated regarding the relationship between economic growth and physical trade balance.