The Key to Growth: Integrating Your Economy with Neighboring Younger and Faster Growing Nations

H/T Bruce McIndoe

This notion is as old as the hills: you always want to be building economic ties with younger, faster-growing economies -- the geographically closer, the better.

For the US, that is Latin America, the proof of concept being the success of Latinos as a subset of the US economy, as captured in this fascinating "2023 U.S. Latino GDP Report."

The 2023 U.S. Latino GDP Report provides a factual view of the large and rapidly growing economic contribution of Latinos living in the United States. In this 6th annual publication, we estimate the U.S. Latino GDP based on a detailed, bottom-up construction which leverages publicly available data from major U.S. agencies. The most recent year for which the core data are available is 2021. Thus, this year’s report provides a snapshot of the total economic contribution of U.S. Latinos in that year.

As a summary statistic for the economic performance of U.S. Latinos, the 2021 U.S. Latino GDP is revealing. The total economic output (or GDP) of Latinos living in the United States in 2021 was $3.2 trillion, up from $2.8 trillion in 2020, $2.1 trillion in 2015, and $1.7 trillion in 2010. If Latinos living in the United States were an independent country, the U.S. Latino GDP would be the fifth largest GDP in the world, larger than the GDPs of India, the United Kingdom, or France.

While impressive for its size, the U.S. Latino GDP is even more noteworthy for its rapid growth. Among the ten largest GDPs, the U.S. Latino GDP was the third fastest growing from 2010 to 2021, while the broader U.S. economy ranked fifth. Over that entire period, the compound annual growth of U.S. Latino GDP averaged 3.5 percent, compared to only 1.6 percent for Non-Latinos. In other words, for more than a decade, Latino GDP grew nearly 2.5 times faster than Non-Latino GDP ...

As of 2021, the 62.6 million U.S. Latinos, themselves the economic descendants of cattle ranchers who arrived in 1513, have created the world’s 5th largest economy. With their youthfulness, strong work ethic, deep family values, entrepreneurial spirit, healthy lifestyle and patriotism, all parts of a centuries-old tradition, Latinos are poised to power the U.S. economy into the mid-21st Century, continuing to be a source of economic strength and resilience that benefits all.

Our future sits right below our noses ...

As I write in America's New Map:

THROUGHLINE SIX

[CALLOUT BOX] The Western Hemisphere is well resourced for adapting to climate change. The Americas are ripe for regional integration. The United States needs to recognize this strategic imperative.

Imagine the story of globalization’s ongoing regional consolidation as a romantic comedy with America as the male lead. Burned-out-but-age- appropriate Europe plays our cynical ex, while glittering-but-distant Asia is stereotypically cast as our exotic desire. As for Latin America? She plays the all-too-familiar girl next door, standing right in front of us but maddeningly unable to escape her taken-for-granted friend zone status . . . until the third act.

Latin America has never enjoyed much strategic attention from the United States—not since we built the Panama Canal. Yes, we clean house there now and then (e.g., changing regimes, responding to disasters) and we work our catastrophic-for-all War on Drugs, along with immigration. But compared to other regions, Latin America strikes us as more burden than boon, more responsibility than opportunity.

This must end if the United States wants to restore its global leadership.

Climate change rotates America’s strategic perspective from East-West to North-South, “verticalizing” our worldview. Globalization, of late suffering a series of system perturbations, compels our recalculation of supply-chain risks. Those are threat-fear reactions. Our Southern neighbors deserve a better iden- tity, in both our deeper recognition of their value and their improved standing.

Our hemisphere’s shared, truly Western civilization marks us as supremely more capable than either the Asia or Center zones when it comes to vertical integration. If for no other reason, Americans should view our hemispheric partners in a far better light. We are entirely blessed to have these neighbors.