Which one gets the actual credit would be very difficult to state. Jorges Luis Borge's works are similar the works of Kafka. Both Kafka's and Borge's works reflect a collaboration of realism and fantasy. Before all the greatness of Magical Realism was realized, it was thought that the Spanish and Latin American fiction couldn't produce anything beyond simple works. However, times have changed, an abundance of great works and attributes are derived from the Latin American culture and its writings.
Magical realism is the writing of Spanish and Latin American authors.
It is a mixture of realism and fantasy. However, the mixture is based on the fact that everything happening in the work is ordinary and an everyday occurrence. Anything, which takes place within the boundaries of the Magical Realism, is accepted as typical life among the characters in the story. No matter how far fetched or extraordinary the subjects are, all the characters within the work treat the action casually. For example if a man throws a baseball and it turns into a bee in mid flight, there would be no astonishment about this incident.