**Figure 17. Latin America: Export Shares by Broad Type of Product**

<!-- Start of picture text --> (a) Commodities (b) Manufactures (c) Services<br>80 80 40<br>70 70 35<br>60 60 30<br>50 50 25<br>40 40 20<br>30 30 15<br>20 20 10<br>10 10 5<br>0 0 0<br>México América Central América del Sur México América Central América del Sur México América Central América del Sur<br>1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018<br><!-- End of picture text --> _Note_ : The manufacture and services series are drawn from the WDI database. The commodities series is obtained as a residual from total exports of goods and services. Central America includes Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Panama. South America includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Peru, and Uruguay. _Source_ : WDI, World Bank.

# **VI.   Growth in the 21**<sup>**st**</sup> **century**

We now explore the impact of macro and trade shocks and the role of China on the growth of LA countries during the Commodities Cycle (2003-2020). To help tighten the links between trade, macro, and growth, we look at Mexico and break down the South American and Central American countries into two sub-groups, depending on features of their trade composition. A simple regression model is used to find the systematic connections between the growth spectrum of each country and the country’s structural and trade composition characteristics. This allows us to derive country or subregion-specific benchmarks. The more specific policy implications of the links between growth, macro, and trade are briefly discussed for each subregion and the country groupings therein. More general policy implications are reviewed in Section VII.

# **1. Salient growth patterns under the Commodities Cycle**

Growth trajectories in LA during the Commodities Cycle evolved differently by subregion, in line with the bifurcation of trade structures mentioned above. To sharpen the analysis, we first push the trade-based distinction between LA countries a further notch. As shown in Figure 18, the commodities-oriented South American region can be sub-divided into two subgroups of countries depending on the concentration of their exports along three broad export categories (commodities, manufactures, and services), and in line with the clusters observed in the manufacturing-services exports space shown in Figure 18. A first group of _more basic commodity exporters_ (BCEs) comprises Bolivia, Ecuador, Peru, and Chile; a second group of _more diversified commodity exporters_ (DCEs) includes Brazil, Argentina, Uruguay, and Colombia.<sup>23</sup> Similarly, the services-oriented Central American countries may be divided into a group of _services exporters_

> 23 The concept of diversification used here relates to the composition of trade among the three aggregate types of tradable goods (i.e., commodities, manufactures or services), rather than to the diversity of products traded within each of the three types of goods.

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