Latin America's economy has received a significant boost owing to the increase in the number of countries that the member countries of the region have been trading within the present world (Furtado, 2018). Increasingly, the member countries have established and maintained their trading ties with European countries, which has led to the intensification of the financial advancement efforts in Latin America (García, 2015). The increase in foreign direct investment in various countries such as Brazil in Latin America has a lot to do with the economy of the European countries involved in the trade. The increase in the foreign direct investment is expected to open up more investment opportunities in Brazil, which will intensify the trade between the country and the other countries (Cole, Elliott & Zhang, 2017). However, the economic strife that has hit some of the Latin American countries is expected to negatively affect the economy of Europe, which is mostly dependent on the thriving of Latin America's economy.
Between 2004 and 2013, Latin America was economically stable owing to the trade between the region and the Asian countries (Naim, 2015). With time, the Asian countries such as China proved to be inappropriate countries for the Latin American countries to trade with owing to their slow economic growth (Tuman & Shirali, 2017). That led to the reduction in growth in the Latin American economy between 2010 and 2015 (Naim, 2015). However, governments such as that of Brazil, which is one of the largest Latin American economies, have come up with stringent measures to reduce the economic inequality affecting the region and the poverty reduction (Cahen, 2015). Thus, there is a glimmer of hope for the European countries that have already established trading ties with Latin America and those that are willing to join the trade (Friedmann, 2018). Therefore, the Latin American and the European economy will be linked, and as the ties get stronger, every change in the Latin American economy will be felt in the European economy.
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References
Cahen, F. R. (2015). Internationalization of State-owned Enterprises through Foreign Direct Investment. Revista de Administração de Empresas , 55 (6), 645-659.
Cole, M. A., Elliott, R. J., & Zhang, L. (2017). Foreign Direct Investment and the Environment. Annual Review of Environment and Resources , 42 , 465-487.
Friedmann, J. (2018). The Barrio Economy and Collective Self-empowerment in Latin America. In Life Space and Economic Space (pp. 120-156). Routledge.
Furtado, C. (2018). Economic Development of Latin America. In Promise of Development (pp. 124-148). Routledge.
García, M. (2015). The European Union and Latin America: ‘Transformative Power
Europe’ Versus the Realities of Economic Interests. Cambridge Review of International Affairs , 28 (4), 621-640.
Naim, M. (2015, October 8). The Coming Turmoil in Latin America. The Atlantic . Retrieved from https://www.theatlantic.com/international/archive/2015/10/latin-america-economic-crisis-middle-class/409675/
Tuman, J. P., & Shirali, M. (2017). The Political Economy of Chinese Foreign Direct Investment In Developing Areas. Foreign Policy Analysis , 13 (1), 154-167.
