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War is an opportunity for "Latin America"

Jair Bolsonaro.

AFP

When the Russian war on Ukraine began in February 2022, it was not only Ukrainians who suffered.

The prices of wheat, oil, and other commodities that both countries produce in large quantities have soared, hitting cash-strapped countries, which depend on imports, badly.

But some world leaders saw what was described as "the bright side of the crisis," including the President of Brazil, Jair Bolsonaro, who said last March that "this crisis is a good opportunity for us."

Similarly, Argentina's president, Alberto Fernandez, said his country is "a storehouse of what the world needs right now: food and energy."

The Economist says Latin American economies are already weathering the war better than many other emerging markets.

Expectations were for Latin America that it would be among the most volatile places. In January, the International Monetary Fund predicted that its growth in 2022 would be the lowest of any region in the world, and inflation rose in Argentina and Brazil.

Against this background, Latin America has done fairly well in the past three months or so.

Wheat and oil prices have risen more than 20% since the war began.

This is good news for Argentina, the third largest wheat exporter in the Americas after the United States and Canada.

Rising oil and gas prices are also providing a boost to hydrocarbon exporters such as Brazil and Colombia.

Elsewhere in the emerging world, the exorbitant cost of food and energy threatens to turn a difficult macroeconomic situation into a horrific one.

By contrast, across much of Latin America, foreign purchases of expensive goods provided a steady flow of hard currency, enabling people and companies there to buy imports on good terms.

Many of the region's currencies have also gained value against the dollar, in stark contrast to much of the rest of the emerging world. 

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