The way in which good news from supposedly unfriendly countries in the LatAm region is ignored isn’t a new phenomenon, but the way in which the news today from Bolivia, that its 2013 GDP growth number at 6.78% represents a 25 year record,
was greeted by virtually zero coverage gave a classic example upon which we might chew. After all, here’s a country going great guns and expanding its economy rapidly but the world of serious people and their serious numbers seems wont to ignore the news.
Why is that so?
That’s the question that floated round this humble scribe’s head today, so after a while and a bit of data compilation this chart appeared, that shows one supposedly “friendly country” annual GDP growth (Peru) next to two supposedly “unfriendlies” (Bolivia and Ecuador) in the period since 2000.
As always, such datasets are going to be noisy (in fact, GDP figures themselves are approximates at best and liable to many revisions) but I put forward that the graph shows two main things:
A: The three countries’ development is roughly equal over time. That’s the big picture verdict, but they’re obviously not exact fits which brings us the main thing number two:
B: Aside a couple of punctual peak/trough moments, there are three periods that show differences worth mentioning. They’re marked on the chart as…
1) The period when Peru outstripped the other two in size of growth. From its timing, it fits with the price rises experienced by its two main exports of copper and gold, as well as the growth of free market policies in the country (under the Toledo and then the García governments).
2) The drops in GDP that resulted from the 2008 financial/U.S housing bubble/Lehman etc crisis were sharp, but Bolivia fared better than the other two. The best guess here is that exports of all types were badly hit, but as Bolivia’s main export and source of currency, natgas, was sold under long-term fixed price contracts it had a better buffer zone.
3) The last couple of years, which has seen decadence in Ecuador and Peru from higher levels, while Bolivia’s growth has accelerated. Both Ecuador’s and Peru’s growth rates are still laudable however, just less than previous years. Meanwhile, GDP growth really seems to be taking hold in Bolivia and a virtuous circle developing.
Therefore yes, there are differences in the story (and 10 or 12 lines is hardly comprehensive on any country, let alone three, so I’m painting in the broadest strokes here) but the question is, why do we the English language consuming business news audience rarely get to hear about the good things going on in Ecuador or Bolivia, but Peru gets all the poster-child-wonder-growth-new-modern-development-hooray-applause stories?
And yes, the best answer starts with the fact that Peru is deemed “friendly” by the North, it’s willing to trade and do deals with Western foreign direct investment (FDI), it promotes “market friendly” policies, it welcomes the arrival of overseas capital. Meanwhile, both Ecuador and Bolivia are known for their governments who on occasion (or even quite often) rail against the ‘capitalist empire’ give us the “go home imperialists” rhetoric, nationalize utilities or cut deals with Chinese capitals for large works or projects (and apologies for the overuse of speech marks there, kind of necessary this time).
But this isn’t politics, this is GDP! It’s about the opportunity to hear about a growth story and enjoy or share the news of success of a new thrusting economy, is it? After all what we’re looking at is GDP growth, a measure of the country’s well-being. It doesn’t matter if FDI is there and making big money, if GDP goes up it means the country is doing better by and for itself and its people, that’s what’s being measured here. Which brings me back to my original question and the way in which biz and economics media studiously ignores the good macro news that comes from the deemed unfriendlies: Why is that so? For me, when it all gets boiled right down the only real answer is that the English speaking media is catering to its audience and that audience doesn’t give a flying fig about Bolivia or Ecuador or whether those countries’ inhabitants are doing well or badly, because they can’t make a profit off their backs. Whereas Peru is a hot topic because it’s Open For Business and a land of opportunity, not only for Peruvians but for new cash coming in and making its own wedge. Plaudits in the business press for Peru aren’t there to congratulate the country, they’re published to open the greed glands of its consumers. While the flipside is that Bolivia and Ecuador don’t get the happyfeely coverage because there’s nothing in it for the foreign audience as long as those commie bedwetters refuse to give us gringos the chance to make coin and bring it back home.
In short, the news is being generated for the self-interest of self-centred human beings. And that’s capitalism for you.