Agribusiness in Latin America and the Caribbean

A report published in 2017 by the McKinsey Global Institute, ‘Where will Latin America’s growth come from’, sets out the productivity challenge facing the Latin American economies. It notes that in the last 15 years the region has achieved growth of around 3% per annum, while China, South Asia, and sub-Saharan Africa have been growing at around 5% per annum. There has also been a problem with the type of growth achieved in the LAC region. About 80% of it is explained by “strong labour inputs reflecting growing populations rather than rising productivity”. Output per worker has grown at only 0.6% per annum, one of the weakest productivity performances of any region in the world. Worse, there are other factors likely to make future LAC growth even more sluggish, such as falling fertility rates leading to slower expansion of the labour force, the end of the commodity price boom we have already mentioned, and the growing risks of protectionism. McKinsey concludes that if productivity remains constant, growth in the next 15 years will be 40% lower than it was in the last 15 years.