Stop Referring to Latin American Countries as "Developing Nations"

You have likely seen the term "developing countries" to describe many countries with lower GDPs. The term has long been used in relation to less industrialized nations compared to their so-called “developed” counterparts. But what are the assumptions and biases lurking in this term?

A Single Category For LATAM Doesn't Work

The terminology of developing vs. developed is increasingly seen as outdated and potentially misleading, despite still persisting in the common lexicon. This shift in perspective is particularly relevant when examining Latin America if you take into consideration the region's turbulent history with colonization. For market researchers, understanding why "developing" is no longer an ideal descriptor is crucial for analysis and culturally responsible storytelling.

For starters, Latin America is made up of countries with vastly different economic realities that defy a single categorization of "developing." Strictly speaking in terms of industry, nations like Brazil and Mexico are on one end of the spectrum, with significant industrial sectors, prominent tech industries, and robust service economies. Haiti and Nicaragua are on the other end of said spectrum, as both struggle with low levels of industrialization, predominantly depending on agriculture and the service industry for economic survival.

Bundling all of those countries in a single generic category makes it hard to create relevant policies and initiatives. Additionally, it reduces the region to a homogenous block, erasing the very real differences in economy, culture, and history between countries in the region. From a business perspective, this homogenization reduces the accuracy of investments, research, and development, as these countries have vastly different needs and systems.

Perhaps an argument can be made that regardless, any categorization will, by default, erase some of the idiosyncrasies of the countries it includes. Still, the terms "developing" vs. "developed" are laden with embedded messages about race, class, and the supremacy of the West. These are not innocent categories, and they’re not even particularly accurate ones.

What's Wrong With "Developing"?

Sure, perhaps referring to the "developing world" makes more sense than reverting back to the Cold War terms of First and Third World countries - which, shockingly, is also still used by professionals in some cases. The "developing" idea is still considered by some to be the most widely accepted criterion to classify countries on a global scale, but it comes with baggage — a list of downsides and shortcomings that we’ll dive into below.

It (kind of) ignores colonization

The history of colonization in Latin America had a profound and lasting impact on the political, social, and economic structures of the region - perhaps unlike any other region in the world. This impact differs by country, but each country in the region was stamped in its own way. Although indirectly, labelling Latin America as "developing," and on a path to being "developed" like colonial powers (such as Spain and England), ignores that those nations benefited from the exploitation of the region's resources and populations.

It is true that some of the reasoning behind the "developed vs. developing" categorizations is to help redistribute resources to struggling nations, which could be seen by some as a step towards historical reparations. However, this taxonomy masks these global power relations (which remain contemporary through neocolonialism) and allows for the interpretation that this underdevelopment is an independent shortcoming rather than a consequence of ongoing external exploitation.

It's reductionist

The term "developing countries" carries a patronizing connotation, suggesting that these nations are at a lower stage of progress compared to "developed" countries. This not only ignores the complexity of different cultures, but it's also not completely accurate, even by Western standards: Brazil is currently the 8th largest economy in the world, and Chile's HDI global ranking is comparable to that of Portugal.

Furthermore, an article by the World Bank, when vouching against the use of this terminology, added that the term “development” "is frequently used to describe the process in which children mature and pick up skills in a sequential way. Using the same term to describe countries can suggest some level of hierarchy in maturity and a set path for improving average well-being in a country." Countries in Latin America are not children, and the countries of the West are not their parents. It’s time we leave paternalistic, colonial logics in the past and evaluate nations based on metrics that make contextual sense.

It's a flat perspective

Referring to "developing countries" creates a narrative of linear progress, where all countries are expected to follow a single path charted by industrialized - "developed" - Western nations. However, Latin America's political and institutional complexities require a more nuanced understanding - as do other nations outside of the region that fall under the same category. Countries in the region have diverse political and complex social systems and unique forms of organization and development that may not necessarily align with Western models of progress.

What to say instead

There is no definitive categorization of nations by the metrics encapsulated in the terms “developed” vs. “developing.” As previously mentioned, any category will fall short of capturing the nuances and complexities of the countries it encapsulates. However, there are options, which often depend on context. One option is the terminology used by the World Bank of low-income, lower-middle-income, upper-middle-income, and high-income countries, which does a better job of grouping nations by current economic landscape than the idea of development.

Conclusion

In conclusion, the term "developing" is increasingly inadequate and misleading when describing any country, and it has certain blind spots when describing Latin America specifically. The region's complex history with other nations, as well as its economic diversification and political, social, and institutional complexities all point to a reality that makes simplistic categorizations fall short. For market researchers, adopting a more updated, nuanced, and context-specific approach is essential for accurate market analysis, participant engagement, and client guidance.