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From 2003 – 2007 Latin America Enjoys Steady Economic Growth

Preliminary Overview of the Economies of Latin America and the Caribbean 2008 Perspectives from ECLAS. From 2003 – 2007 Latin America Enjoys Steady Economic Growth. 1994 – Mexican Peso Crisis 1997 – Brazil Real Crisis & International Contagion 2001 – US Sept. 11 Crisis.

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From 2003 – 2007 Latin America Enjoys Steady Economic Growth

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  1. Preliminary Overview of the Economies of Latin America and the Caribbean 2008Perspectives from ECLAS

  2. From 2003 – 2007 Latin America Enjoys Steady Economic Growth 1994 – Mexican Peso Crisis 1997 – Brazil Real Crisis & International Contagion 2001 – US Sept. 11 Crisis

  3. Regional GDP increased by 4.6% in 2008 -- Completing a sixth consecutive year of economic growth LATIN AMERICA AND THE CARIBBEAN: GDP GROWTH, 2008 (Percentages)) The Latin American and Caribbean region’s per capita GDP grew by more than 3% for the fifth year in a row.

  4. Growth has been associated with improvements in Labor Market conditions Highergrowthrates, lowerunemploymentandbetter-qualityjobshave helpedimprovepovertyindicators.

  5. Significant Reductions in poverty and indigence between 2003 -2007

  6. Countries with the most significant reductions in poverty are notthose customarily associated with Washington Consensus Policies Left Governments in Argentina, Bolivia, Ecuador, Honduras, Nicaragua, Venezuela…

  7. The economic experience of the region over recent decades leaves countries to view today's crisis from a different perspective: “The crisis came from abroad, not just from the subprime situation, but also from a market-oriented economic model. Now we have to discuss whether the role being assigned to the State is temporary or permanent and if we should open new spaces for public policies, and in this context, assess the capabilities the region has lost." Alicia Bárcena, Executive Secretary, ECLAC “Financial meltdown will not cause the U.S. to abandon democratic capitalism, but the outcome is less clear for countries deciding whether capitalism is the best system. In many of these countries the choice is not between light and heavy financial regulation, but between relying on creative individuals or government planners to escape poverty.” William Easterly

  8. The Developed Countries are in Recession Globally Latin America’s continued external dependence will couple its fate with the decline of the DC’s as the engines for growth fail across seven dimensions

  9. 1. Developed Country Recession will negatively impact trade flows and foreign exchange earnings

  10. 2. Commodity Price Booms are now Bust

  11. …And Latin America reverts once again to falling terms of trade.

  12. 3. Remittance flows will fall, hitting some Caribbean and Central American nations hard

  13. 4. Revenues from Tourism will drop with adverse consequences for the Caribbean and Central America

  14. 5. Foreign Direct Investment (FDI) Flows will fall with differential impact from country to country

  15. 6. Higher cost of capital and credit rationing for emerging economieswith increased financial volatility in the Center

  16. Reversals on Internal and External Balance

  17. Exchange Rate Volatility

  18. Precarious Capital Account Dependence on Portfolio Flows

  19. Large Private Sector External Debt Exposure

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