Latin America feels the pinch of economic uncertainty as the 'Chinese dream' starts to fade
The sun shines in Sao Paulo as the helicopter takes off from Campo de Marte’s airport and, soon, the main reason behind the booming demand here for helicopter taxi services emerges: thousands of cars are literally stuck at the city’s main avenues, exasperating drivers who spend up to five hours to travel a mere 20km.
“We have all the conditions – horrible traffic, a big city and rich people – to develop our business. When clients call us requesting a service we are able to pick them up in any of the city’s 200 heliports in about 20 minutes,” says Rafael Dylis, director at Helimarte, a leading helicopter taxi company which provides rides starting from HK$3,200 per hour.
“We grew steadily by 20 per cent for years, but now the crisis is impacting us very much and we have been pushed to sell helicopters to cut costs. We don’t know what will happen in the future. Demand has gone down 40 per cent in just one year,” explains Dylis, illustrating the impact of China’s economic slowdown within Brazil’s upper class, as lawyers, traders and bankers involved in the billionaire business of supplying soybean, iron ore or oil to the Asian giant have restrained their sumptuous expenditure.
The collapse of commodity prices – of which Latin America is a major exporter – and China’s increasing economic uncertainties are painful signals of the end of an economic bonanza which benefited most of the countries in the region for the last 15 years.
Massive exports of oil, minerals and agricultural products to China stimulated growth and foreign investment for over a decade, creating a “Chinese dream” in the region, but in the meantime few countries invested in creating added-value chains to diversify the economic structures and this resulted in an over-dependence on raw materials.
“History is repeating, we have already been in this situation in Latin America: we are very dependent on our commodities and, when there is a super cycle like the one we have just lived, we miss the opportunity to sustain long-term development,” argues Victor Torres, from the Peruvian San Marcos National University.