Checking Latin America’s vital signs.

Recent growth has given Latin America the economic health to tackle its pressing challenges: poverty, educational needs, and business-choking red tape.

Latin America’s prospects are brighter than at any time in the past quarter century. Robust global demand for the region’s agricultural, energy, and mining exports helped its economies expand by more than 5 percent in 2006—the fourth consecutive year of GDP growth. Since 2003 GDP per capita has risen 12 percent, a sharp contrast with the region’s previously moribund economic performance.

Encouragingly, most governments in Latin America are responding to today’s auspicious conditions with sound policies. As a result, macroeconomic stability is returning. Inflation—a perennial scourge—fell to a 40-year low. Governments across Latin America have used windfall export revenues to balance their books.

Still, the hope of prosperity and opportunity eludes many Latin Americans. The region has the world’s most unequal income distribution. While access to education is improving, educational quality is poor. Moreover, weak institutions and regulatory burdens are partly responsible for a business environment that stifles entrepreneurship and for the persistence of poverty and unemployment.

Latin America has seen its booms go bust before. But addressing the problems now, while growth is strong, would further improve the region’s economies and the lives of its people. The exhibits that follow illustrate its recent economic successes and highlight three challenges facing the region.

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