Latin America used to be the world’s most prosperous emerging region, but it is on the verge of being overtaken by other regions that were long considerably poorer. It has lost ground since the 1980s despite reform initiatives because of sluggish growth and the unequal distribution of the gains of that growth.Latin America’s missing middle: Rebooting inclusive growth (PDF—2MB) focuses mainly on Brazil, Colombia, and Mexico, and examines two “missing middles” holding the region back: a robust cohort of midsize companies and a solid middle class with growing spending power. The two are connected: expanding the pool of modern, competitive firms can create better paying jobs, and lift middle-class demand needed for new investment. The disruption presented by adoption of digital technologies provides an opportunity to reignite this virtuous cycle of growth—but it will require reforms to help companies compete and workers prepare.
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