Latin America is a land rich in opportunity. It was once a "new world," mystifying European settlers with powerful symbols of wealth, technology, and culture. Its fertile lands held the promise of abundant natural resources, both agricultural and industrial. Capitalism also has a rich history here, from pre-colonial trade to the coffee barons of nineteenth-century Brazil to burgeoning financial services today.
Yet, for all its allure, Latin America is a region defined by contradiction, of promise and change mitigated by bouts of boom and bust. For decades, Latin American countries witnessed currency crises, bank failures, hyperinflation—a violent cascade of every conceivable economic disaster. The region's long history with populism has exacerbated this tumultuous past. Rightly or wrongly, it is viewed as the "basket case" of emerging markets.
Despite these flaws, Latin America's siren song has often proved too hard to resist. Just when it appears investments in the region should be shunned forever, recovery restores hope anew and investors flock again to its shores. Given Latin America's vast, resource-rich potential, this is justified. But an understanding of its deeply cyclical past is a crucial prerequisite for emerging markets investors. With this in mind, we chronicle the last few decades of Latin America's tumultuous history, starting with its often unique relationship between politics and economics.