IMF chief praises Latinamerica, which can provide ‘some lessons to the advanced world’
IMF chief Christine Lagarde who this week will be visiting Latinamerica said that Brazil, Mexico and Peru, like to many other countries in the region have done remarkably well over the past few years and can provide some lessons to the advanced countries.
Lagarde’s first official trip to Latinamerica coincides with the transfer of leadership in the G20 (group of leading developed and developing economies) to Mexico, a country “in a unique position to shape our collective economic destiny over the coming year”.
The IMF chief described Brazil as “one of the world’s leading emerging markets, deeply integrated into the global economy that will play a central role in the global economic debate, and will be instrumental in harnessing the global cooperation needed to address the urgent challenges of the day”.
Regarding Peru, Lagarde said it is “a new rising star, surely among the new wave of leading emerging”.
“I believe Latin America is now on a firm foundation, and can look ahead to lasting prosperity and stability that can lift the living standards of all”, said Lagarde.
“These countries have harvested the fruits of strong fundamentals, sound policy frameworks, and prudent macroeconomic policies and are now enjoying sustained growth with reduced vulnerabilities—an enviable sweet spot”, added the IMF chief recalling that its wasn’t always like this.
In the old days, a disruption on the scale of the 2008-09 global financial crisis would have triggered major upheavals since Latinamerica tended to be one of the most exposed and vulnerable regions.
“Not any longer. In fact, the new Latin America can provide some lessons to the advanced countries—such as saving for a rainy day, and making sure that risks in the banking system are under control”.
However Lagarde also pointed out that Latin America is not immune to any storms that come out of Europe, “no one is, in our interconnected world, there is simply nowhere to hide”.
The challenge for the region going forward is to sustain growth in a very volatile environment. Mexico will need to keep a keen eye on conditions in the United States and Europe, and implement structural reforms to unleash its growth potential. A key challenge for Brazil will be to increase domestic savings to reach higher and sustained growth. And Peru would benefit from continued reforms to achieve more inclusive growth while preserving its hard-won macroeconomic stability.
“But growth alone is just the first step: the region in general needs more socially inclusive growth, which means efforts to build fairer societies based on shared opportunities and social justice”.
Lagarde said that historically, inequality has been the bane of Latin America. Not only did this prevent large swaths of the population from sharing in the gains of growth, but it also contributed to social and political instability—which in turn hurt economic prospects.
“Indeed, recent IMF research has shown that more equal societies are associated not only with greater economic stability, but with more sustainable growth over time. So growth and social inclusion are really two sides of the same coin”.
Lagarde identified social inclusion as one of the factors behind the region’s recent economic progress: in countries like Brazil and Peru, indicators of poverty, inequality, and human development have improved dramatically over the past decade or so.
Brazil’s Bolsa Familia and Mexico’s Oportunidades programs have enjoyed particular success in breaking the intergenerational transmission of poverty—so much so that they are now models for the rest of the world.
Finally Lagarde said that the global economy is transforming and Latin America is definitely on the rise, “and the three countries I am visiting represent—each in their own way—the next generation of global economic leadership”.
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The IMF, WB and others similar international institutions last decades over LATAM gvt. is now giving good results with a region that have learnt the lesson of austerity, stability, investiment and well management on the most of their countries (unless some exceptions that confirmed the rule)......
The majority (?) of Brasil's poor now 'live on the social', as they say in the UK.
Because they receive - from the middle class, not from the rich - they can spend that which they have not earned.
It has become 'entitlement money' which Dilma has not found a way to stop once a family becomes 'entitled'.
Sounds good, even looks good in UN reports, but the bottom line is that Brasil has created a Developed World dependency society in a place which is not yet the Developed World.
The BIG TRICK will be to insist on Education *Performance* as the quid pro quo for receiving the Bolsa.
The external monitoring of performance against projections will reveal some REAL home truths.
But performance is what it should be all about.
Simply giving the Bolsa for attendance does little as the attendence is spasmodic and the education is politicisied and *very* poor by OECD standards.
But I agree, the development of a nation progresses best with maximum 'equality' - but equality comes from *QUALITY* education leading to quality employment, not from entitlement/dependency handouts.
And of course the high quality education, after their massivness, is the way to get a developed country....with high productivity standards, low corruption rates, good gvt. management, sustainable procedures, stables investiment conditions, etc., etc....
your protected countries like ;
Kiribati has 25 % GDP
Samoa has 12 % GDP
Solomon Islands has 30 % GDP current account deficits...!
aren't they bothering you ??
Argentina is 700-1000 bigger than the problem with the three countries. And it defaults.
Kiribati (The Gilbert Islands, as was) is in the central, equatorial Pacific Ocean. It became independent from the United Kingdom in 1979.
The permanent population is 103,000.
It is a member of the Commonwealth, the IMF and the World Bank, the United Nations.
GDP PPP $618million; GDP (nominal) $147million (2010).
No Defaults.
The Independent State of Samoa (Navigators’ Island, Western Samoa, German Samoa, as was). The Samoan Island Group includes the U.S. Territory of American Samoa. Became independent from New Zealand in 1962.
Population 180,000.
Samoa is a member of the Commonwealth, the IMF and the World Bank, the United Nations.
GDP PPP $1billion; GDP (nominal) $558million (2009).
No Defaults.
The Solomon Islands, an island group east of Papua New Guinea is a sovereign state. The United Kingdom established a protectorate over the Solomon Islands in 1893. Self-government was achieved in 1976 and independence two years later.
Population 523,000.
It is a member of the Commonwealth, the IMF and the World Bank, the United Nations.
GDP PPP $1.5billion; GDP (nominal) $657million (2009).
No Defaults.
Argentina. Gained formal independence from Spain 1816.
Population 40,09,359.
It is a member of the United Nations.
GDP PPP $710.7billion; GDP (nominal) $435.2billion (2011).
Defaults.
The global recession of 2007–10 hit the country hard in 2009 with GDP growth slowing to 0.8. Argentine debt restructuring offers in 2005 and 2010 resumed payments on the majority of its almost $100 billion in defaulted bonds from 2001. Many overseas private bond and debt holders have yet to be repaid. The economic minister Amado Boudou said that with the offer, the Argentine government hoped ”to end the shame of 2001 once and for all. High GDP growth resumed in 2010, and the economy expanded by 8.5%. Inflation is nominally 9% (INDEC), 25-30% (independent assessors).
Excellent post Geoff: but do you not think that we are wasting our time and effort on the Argie bloggers?
I have never in my life thought like this but the abysmal intellect shown by almost all of them and the rabid venom by the rest does make me think why bother?
I post because I can, being retired. And because I have always enjoyed the cut and thrust of debate.Just like this Mercopress forum, the undergraduates with whom I was mutually exposed for those many years, ranged from the lightening-fast comprehenders with huge intellects to the dullards who were there for the 'experience'. But all played the same game.
I have never been cruel or hurtful to anyone who I think can't take it; but I am frequently cruel and hurtful.
People come here because they want to; some are trolls and some are probably paid to have a (party) political agenda. Hell, the forum itself displays its biases with its topics and its sub-edit. phraseology.
But the majority are just Ordinary Joes, happy to push their point of view.
Bottom line is - I enjoy it.
I am judgemental on this site and elsewhere because I stand up and rail against corruption in high places, particularly in the countries I love.
But I also have a soft underbelly and a playful disposition when I am not shouting at the moon.
The “advanced” nations aren't interested in learning from “poor” nations of how to fix problems. With technocrats (bankers who call themself politicians, unelected of course, know how to cook the numbers) in charge who created the problem and now have the answer will continue too fool the people to accept austerity measures to pay off their buddies and simply destroy the nations sovereignity. That's the whole deal and Lagarde knows that. She's just going around nations, slime and beg for more money. Note..IMF/world bank =USA=Bankrupt, but hey, as Mr Greenspan said on MSNBC, they can always print more money.
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