The author is the chief global strategist of Morgan Stanley Investment Management, and the author of “Ten Rules for Successful Countries”

Although Marquez-style civil and class wars, colonialism, and corruption have caused serious damage to Latin America, history shows that its economic fortunes have risen and fallen because of one thing: oil, iron ore, copper and other commodities s price.

Now, despite the recent decline, commodity prices increase rapidly Since the beginning of last year, this has not been the case in Latin American economies. As the global economy grows by 5%, they are expected to shrink by 1% this quarter. To plot the relationship between commodity prices and GDP growth in Latin America, the lines that have been moving for decades suddenly diverged. why? Epidemics and populism.

Seven of the 10 countries with the highest Covid-19 death rates in the world are in Latin America. During an unusually busy campaign, this fee is driving support for anti-establishment politicians. 11 Latin Countries where elections are held this year. Brazil and Colombia will follow closely next year. In many cases, when the pandemic strikes, the right wing is in power, so rising dissatisfaction benefits left-wing or ultra-left candidates.

Marxist-Leninists are ready Become the next president of Peru. A communist is one of the front runners to replace Chile’s center-right Sebastian Pinella.Violent protests against the Colombian government are improving its prospects Left-wing opponentIn Brazil, the right-wing populist Jair Bolsonaro’s gesture is helping his radical other self, former President Luiz Inácio Lula da Silva, establish Leading in the polls.

The fear of what will happen next is to hinder investment in times of fragility. The 2010s are a lost decade. Falling commodity prices have weakened growth, which account for more than half of the exports of most economies in the region. When commodity prices plummeted, foreign investors began to avoid Latin American stocks and bonds, and they have not yet returned. Pessimism enveloped the entire continent.

In the long run, commodity prices will not rise faster than inflation, which puts resource-dependent Latin America in a difficult situation. My research shows that compared with the United States, the per capita incomes of Brazil, Chile, Mexico, and Colombia are not higher than in 1850 (when the comparative records started). Argentina, Peru, and Uruguay are significantly poorer. The average income of Argentines is now 33% of the average American income, down from 55% in 1850.

Nevertheless, in the decades when commodity prices have soared, so has Latin America. When prices rose sharply in the 1970s and 2000s, the rate of growth also accelerated, and the number of economies in the region grew fast enough to bring their average incomes into line with the United States. In the decades when commodity prices have fallen, so has Latin America, most recently in the 2010s.

However, given the cyclical nature of commodity prices, a bad decade often heralds a better decade. Weak prices in the 2010s hindered investment in the production of global oil fields, mines and other raw materials. Supply is tight and inventory is low. As the global economy rebounds, the demand for various commodities is increasing, especially those needed for electric vehicles and green houses and buildings.

Leaving aside recent volatility, commodities seem to be entering a new “super cycle” of rising prices.Latin American countries as major exporters Soybeans, Green metals and other commodities should benefit more than most people. Peru and Chile alone supply 40% of the world’s copper.

The hope for the region is that the commodity boom is strong and lasting enough to overcome doubts about a new wave of populism. The financial crisis has a way to alleviate the behavior of even the most determined radical.

Lula took office after the crisis in the 1990s, at least in the early years of focusing on controlling inflation and controlling consumer urges, which surprised many people. In Mexico, President Andres Manuel López Obrador confirmed investor concerns in many ways, except for one key issue: budget discipline. His refusal to invest heavily in pandemic relief shocked some people, but compared to many other emerging countries, Mexico has less debt.

The current group of socialists and communists may not be as successful in public opinion polls as people generally fear, or they may not be so radical in their governance. If the political drama really fades, Latin America will be free to be itself; an economic region dependent on commodities, as global prices rise, as long as the upward swing continues.