Before answering why Latin America cannot build great nations, we need to define: what are great nations?
They are those that have managed to transform their human capital into real wealth: industrialized economies, high value-added companies, highly skilled professionals, and a GDP that reflects that productive capacity. The United States, Japan, Germany, South Korea, Taiwan, among other nations that, regardless of their culture or history, managed to build exactly that.
While researching this article I found that the countries mentioned above all fulfilled a specific set of conditions to become what they are.
Researching the histories of the countries mentioned above, how they went from feudalism, agrarian economies, or complete misery to becoming these great nations, certain patterns kept repeating across all of them.
All of them were on the brink of disappearing. They faced an existential crisis as an irreplaceable catalyst, one that forced them to innovate, compete, and reinvent themselves just to keep existing. Countries like South Korea faced a nation in ruins after the Korean War, with a GDP per capita below $100, making it poorer than many African countries at the time. Germany in 1945, after the end of World War II, suffered a total collapse: 20% of its housing stock destroyed, industrial production at 33% of pre-war levels, and food rations of 1,040 to 1,550 calories per day. In 1949 the nationalist Kuomintang party (KMT) was forced to flee mainland China to Taiwan, a small island with no natural resources, under permanent military threat from China, where 85% of its exports were sugar and rice. The Sputnik moment, when the USSR launched the first satellite, triggered a national crisis in the US, feeling like it was losing its technological superiority. An existential technological threat.
Alongside that, in those moments of crisis they decided to bet on large-scale technical education for their populations, turning them into professionals in fields like mathematics, physics, engineering, and technology, among others. Taiwan established free and compulsory education in 1950 when its GDP per capita was just $145. Japan built its national education system in 1872, before having the money to do it. Both invested in education as a cause of development, not as a result of it.
A developmental state. The state allows capital to flow toward strategic industries with real private incentives. Socialism or communism is never implemented, the economy is allowed to grow and develop, private initiatives are allowed to compete not just regionally but also internationally, without applying heavy protectionism to local companies. South Korea directed capital toward heavy industry, chemicals, and electronics through its Five-Year Development Plans starting in 1962, under which Samsung, Hyundai, and LG were born. Japan did the same through MITI, its ministry of trade and industry, which coordinated industrial strategy without eliminating private competition. In both cases the state made the bet, but the market did the executing.
Real property rights and a functional rule of law. Long-term productive investment requires certainty that what you build will not be arbitrarily taken from you. Without that certainty, capital does not flow into industry or technology. It escapes or gets hoarded. The United States had this from its Constitution in 1787, and that institutional foundation is what allowed its 19th century industrialization to be sustained and cumulative. Germany rebuilt it from scratch in 1948 with Erhard's monetary reform and liberalization, and within 15 years went from rubble to the third-largest economy in the world. Japan and South Korea established it as part of their land reforms, first guaranteeing land ownership to farmers and then scaling that logic toward industrial and private capital.
The Great Depression of 1929, together with the outbreak of World War II, collapsed commodity prices and global trade, forcing Latin America to attempt industrialization in the period between 1930 and 1980. Brazil, Argentina, Mexico, and Chile adopted Import Substitution Industrialization (ISI): build domestic industry instead of importing. It was the closest the region ever came to fulfilling the 4 conditions. It failed at all of them.
Why were these financial crises not enough? Because they did not reflect a threat to national survival. Nobody was at risk of being colonized, invaded, or annihilated. There was never that sense of urgency that drives innovation and reinvention just to keep existing.
When it comes to mass technical education, although public universities were built and basic education coverage expanded, investment was minimal, and there was a widespread brain drain phenomenon where highly skilled professionals never practiced in their home countries and instead emigrated to nations with more opportunity. Which brings us to today, where the average investment in R&D across Latin America is 0.7% of GDP, compared to the 2.4% average of OECD countries.
A state that blocked development. Although ISI was implemented, regional companies were never allowed to compete globally. Excessive protectionism was applied across the board, all under the banner of protecting micro, small, and medium-sized businesses. The opposite of Asia, which forced its companies to compete, survive, improve, and become large global players. A state should not assume its citizens cannot fend for themselves. It should give them the freedom to compete and let the best win.
There was never any real respect for private property or a functional rule of law. The same pattern kept repeating: the economy opens up, grows a little, populist leaders arrive promising to redistribute those small gains, they take power, they expropriate, capital flees, and the cycle starts over.
Everything described above has real, everyday consequences that you probably already know firsthand. Institutional corruption that ends up causing more informality, zero wage growth due to the region's lack of economic growth, the obvious failures of the education system that end up preventing you as an individual from developing the skills needed in the job market. The insecurity that limits where you live, what time you go out, and even where you send your kids to school.
These are not isolated failures or historical accidents. They are the logical result of not having fulfilled any of the 4 conditions that turn a nation into a great one, and of having repeated the same cycle for decades without the urgency needed to break it.
Great nations were not built by waiting for the system to change. They were built by individuals who understood the conditions of their historical moment and acted accordingly. Japan in 1868 did not wait for political consensus to modernize. South Korea in 1953 did not wait until it was ready to invest in education. They acted from within adversity, not in spite of it.
You live in a region that did not generate those conditions and that, without a real existential crisis on the horizon, will probably not generate them anytime soon. That is not a condemnation. It is information. You have no moral, ethical, or legal obligation to stay and try to save what does not want to be saved.
What you do with that information is your decision.