Export Growth Rises As Key Latin Economies Revitalize
Written by Chuck Uckert on September 28, 2000
By Chuck Uckert
South Florida exports rose 4.5% to $14.9 billion during the first half of 2000, fueled at least in part by double digit increases to key Latin American trading partners.
The rise is in sharp contrast to the 4% decline in exports recorded in the face of economic woes throughout Latin America in the same period last year. Observers agree that many of these countries are on the rebound and that’s good news for South Florida exporters.
"We’ve been seeing a gradual recovery," said Manny Mencia, vice president of international trade for Enterprise Florida. "During the second half, you’ll see the recovery accelerating."
He said the "new open economies are more resilient. They seem to be able to recover more quickly than in previous years."
Brazil continues to be a strong trading partner as it emerges from last year’s recession and the impact of its currency devaluation. Exports to Brazil during the first half of the year grew by more than 12% to nearly $2.9 billion and overall trade with Brazil grew by 17%.
The Brazilian economy is expected to grow by 3.9% this year, according to Alicia Diaz, vice president of StratInfo, international trade consultants.
"Brazil has recovered very nicely," she said. "This is important to Florida because Brazil is Florida’s main trading partner."
Brazil accounts for nearly 20% of the exports that flow through South Florida.
"Brazil went through a very difficult crisis," Mr. Mencia said. He said he expects the country’s economy to grow by 3.5% "with only about a 6% inflation rate, which is remarkable.
"Brazil’s recovery will continue to gather momentum. There’s strong confidence in the private sector of the Brazilian economy."
Chile is also making a dramatic recovery from last year’s recession, when the country’s GDP, or gross domestic product, was falling by 1.1%. The Chilean economy is now growing at 5.7% and South Florida exports to Chile are up nearly 21% to $561.8 million during the first half of the year, according to Ms. Diaz.
Mr. Mencia said Chile is "rapidly recovering from the recession" and that "the future is excellent."
Costa Rica has also been a shining star for South Florida trade. Exports to this Central American country grew by almost 12% during the first half of 2000 to $740 million, Ms. Diaz said.
An important boost to the Costa Rican economy was the opening of an Intel Assembly plant there last year. Intel ships components to its Costa Rican facility where the computer parts are assembled, then shipped back to the US.
"Intel has been excellent for the Costa Rican economy," said Ms. Diaz. The Intel plant has also been a boon for the region since most of Intel’s shipments to and from Costa Rica go through here.
Exports to the Dominican Republic, South Florida’s second most important trading partner, grew by almost 4% to $1.1 billion during the first half of the year.
Experts expect the Dominican economy to continue its upward momentum now that the Caribbean Basin Initiative has been signed into law. The initiative lowers tariffs on many products, including textiles, imported from this region. This should help boost the Dominican economy since many US companies ship fabrics to the Dominican Republic where the fabrics are assembled into clothing, then shipped back.
The law takes effect Oct. 1.
Observers say the law will allow the region to compete more effectively with similar operations in Mexico, which has enjoyed lower tariffs thanks to the North American Free Trade Agreement.
"I expect the Dominican Republic to perform tremendously," Mr. Mencia said, adding that the country may see 7% or 8% growth this year.
Despite its slow economic recovery, Argentina remains one of South Florida’s important trading partners. Exports to Argentina have increased nearly 5% over the first half of last year to $908 million.
"Argentina is not doing that well," Ms. Diaz said. "The economy is still sluggish."
Mr. Mencia said that in Argentina the "recovery has been disappointing" and that high interest rates have been "squeezing the economy."
He said "inflation has remained under control" and "the recovery will be in full bloom by 2001."
Although the overall economic picture has improved for Latin America, some countries are still experiencing economic doldrums that are reflected in decreased exports.
"We still see pockets that I expect will continue to find the road difficult for the rest of 2000," Mr. Mencia said.
Colombia and Venezuela are among the countries that are still struggling to recover from the economic turmoil of last year.
Exports to Colombia, which has been rocked by violence and political unrest, are down 9% to $786.6 million during the first half of this year. Last year South Florida exports to Colombia totaled $867 million in the same period.
But Colombia may still see a turnaround. Mr. Mencia said he expects the GDP, which was negative last year, to grow by about 2.5% this year.
He said the nation is at the beginning of a "painful recovery period.
"It should be one of the leaders in the hemisphere," Mr. Mencia said, "but its instability has prevented that."
Exports to Venezuela dropped 12% to $1.1 billion during the first half, but experts say Venezuela may be on the mend due to the recent hike in oil prices.
"They’re going through a political crisis and economic difficulties," Ms. Diaz said. "The economy in Venezuela lacks direction."
Nevertheless, Ms. Diaz said, "there will be economic growth thanks to the bonanza in oil prices."
Mr. Mencia said he expects the Venezuelan economy to grow about 3% this year.
Venezuela still ranks as an important export market for this area despite recent declines. In the first half of the year, only Brazil and the Dominican Republic surpassed Venezuela in the amount spent on goods imported from South Florida.
"The Andean region is the area of most concern," said Mr. Mencia, citing problems in Peru and Ecuador.
"Ecuador is going through its worst economic crisis," he said. He said the country is likely to see negative growth this year.
Peru’s weak infrastructure, he said, is as an obstacle to economic progress in that country.