Sunday, September 06, 2015

Fifteen Years into the XXI century in Latin America

It may be too early to assess this century trends, but for Latin America it is important because there was great expectations, following the lost decade (1980-1990), and the reforms which followed since then. Besides, it is unusual and risky, to analyze a century which is still on, and so much about to happen. However, it is interesting to make some evaluation when it comes to some facts about Latin America economies in this century quite different from the previous one, such as: a.- Market oriented economic policies, as an alternative for the state led inward economic development ones. (XX century).- b.- Democracy as a legitimate way to solve political differences, as much as to provide solutions for people ´s demands as well.- c.- Better institutional design for economic policies, such as Autonomous Central Banks , Fiscal policy responsibility, and better designed financial markets.- d.- Higher level of trade and financial integration with the world economies, such as to make Latin America a potential global partner.- e.- The lasting effect of the Asian economies crisis (1997-1998), such as higher country risks and outflow of foreign investment. So, what can be said as a preliminary balance so far?: a.- There has been an important expansion of opportunities arising from social mobility, economic growth, and both lower unemployment and poverty level.- b.- The new middle class, has become the key market target , for business expansion within Latin America economies.- c.- Firms and business man, have become the alternative for the state when it comes to economic integration, economic growth, and solving some publics investment needs such as infrastructure(energy, railroads and the like).- d.- Technology change focused on good consumers ,has been widely accessible to an important proportion of population.- e.- Government and politicians, have not been up to the challenge of coping with the demands arising from a more complex society, making gobernance more difficult . Seven elected Presidents since the year 2000,could not finish their period which they were elected for.(Peru,Bolivia, Equator(twice), Argentina,(three cases), Paraguay , Honduras and a few days ago Guatemala).- f.- Climate change is increasingly a pressing issue for this continent, as it is for the world,which required more coordinated policies.- However, even though it seems that there are more positive than negative events, the net outcome is far from being positive. Governments seemed to be unprepared for both decentralized and complementary solutions, instead it has been captured by those who looks to serve themselves, than others.This approach to public policies as a whole,has made an important difference for this preliminary evaluation to have a net positive outcome.-