Harvard Latino Law, Policy, Business Conference

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Presentación de Ernesto Cordero Arroyo sobre el crecimiento económico de América Latina. Dictada durante la Conferencia "The Rising Latino: Latinos in the United States and Latin America on the World Stage" en la Universidad de Harvard en Boston, Massachusetts.

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Harvard Latino Law, Policy, Business Conference

  1. 1. LATIN AMERICAECONOMIC RISEERNESTO CORDERO-ARROYO15th Annual Harvard Latino LawPolicy and Business ConferenceApril 13, 2012
  2. 2. 2 Latin America’s economic past was dominated by financial crises Financial crises in Latin America Country Start year End year Crisis Type Net fiscal cost1 Output loss2 Policy Responses 1980 1982 Banking and currency 55% 11% Bank nationalization and liquidity-support measures Argentina 1989 1991 Banking and currency 6% 11% Liquidity-support measures and partial deposit insurance 2001 2003 Banking, currency and debt 10% 43% Bank nationalization and liquidity-support measures 1986 1986 Banking N/A 49% Liquidity-support measures and partial deposit insurance Bolivia Bank mergers, partial deposit insurance and purchase of bad 1994 1994 Banking 3% 0% loans 1990 1993 Banking 0% 12% None Brazil 1994 1998 Banking 10% 3% Government bond purchases and bank recapitalizations Government bond purchases, bank recapitalizations and Chile 1981 1985 Banking, currency and debt 17% 92% mergers 1982 1982 Banking 5% 15% Bank nationalizations and recapitalization measures Colombia 1998 2000 Banking 3% 34% Bank nationalizations and recapitalization measures Ecuador 1998 2002 Banking and currency 16% 6% Bank nationalizations, mergers and government bond purchases Jamaica 1996 1998 Banking 39% 30% Bank nationalizations, mergers and recapitalization measures 1981 1985 Banking, currency and debt N/A 27% Bank nationalizations and recapitalization measures Mexico Liquidity measures, bank mergers and exchange rate 1994 1996 Banking and currency 18% 4% liberalization Panama 1988 1989 Banking 27% 85% Bank nationalizations and recapitalization measures Paraguay 1995 1995 Banking 10% 0% Liquidity-support measures and partial deposit insurance Peru 1983 1983 Banking 12% 55% Liquidity-support measures and bank nationalizations Bank nationalizations, recapitalization measures and deposit Uruguay 2002 2005 Banking, currency and debt 11% 29% insurance Venezuela 1994 1998 Banking and currency 13% 10% Government bond purchases, and partial deposit insurance 1) Calculated as a percentage of GDP. 2 ) Represent the accumulated loss in real GDP during the crises’ period.Sources: Laeven, Luc, and Fabian Valencia, 2008, “Systemic Banking Crises: A New Database.” IMF Working Paper 08/224. Washington: International MonetaryFund. Laeven, Luc, and Fabian Valencia, 2010, “Resolution of Banking Crises: The Good, the Bad, and the Ugly .” IMF Working Paper 10/146. Washington:International Monetary Fund.
  3. 3. 3 Latin America is becoming an important economic player in the world Contribution to Economic Growth Estimates per Region, 2012- Growth, 2011 2013 (Percentage) (Percentage of GDP in real terms) 6.0 5.5 5.5 5.2 2012 2013 14% 5.0 4.5 4.3 4.0 4.1 4.0 4.0 3.5 3.0 2.5 2.5 2.0 86% 2.0 1.8 1.4 1.5 1.0 Latin North Europe Asia Rest of the Latin America Rest of the World America America worldSource: Inter-American Development Bank. Source: Own estimates based on International Monetary Fund data.
  4. 4. 4 Macroeconomic prudence has been the basis of Latin America’s economic rise Fiscal Deficit, 2010 Inflation, 201035.0% 32.0% 6.0% 5.1% 4.7%30.0% 5.0% 4.2% 4.0%25.0% 3.0% 2.1%20.0% 1.6% 2.0%15.0% 10.5% 10.4% 9.3% 1.0%10.0% 0.0%5.0% 2.8% 2.8% -1.0%0.0% -2.0% -1.5% Brazil Greece Ireland Spain Mexico USA Brazil Greece Ireland Spain Mexico USA Change in Real GDP, 2010 Unemployment Rate, 201010.0% 25.0% 7.5% 20.1%8.0% 5.4% 20.0%6.0%4.0% 3.0% 15.0% 12.5% 13.6%2.0% 9.6%0.0% 10.0% 6.7% -0.4% -0.1% 5.4%-2.0% 5.0%-4.0%-6.0% -4.3% 0.0% Brazil Greece Ireland Spain Mexico USA Brazil Greece Ireland Spain Mexico USASource: International Monetary Fund and Mexico’s Ministry of Finance.
  5. 5. 5 Exports have contributed to improve economic performance Latin Americas Total Exports1,200 (2010 Constant Billion dollars, deflated by US CPI)1,1001,000 900 800 700 600 500 400 300 200 100 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Source: United Nations Conference on Trade and Development.
  6. 6. 6 Better economic performance has increased development and income in Latin America Human Development Growth of per Capita GDP Index 2011 100% (Percentage) 90% Chile 0.805 80% Argentina 0.797 Uruguay 0.783 70% Cuba 0.776 Bahamas 0.771 60% México 0.77 Panamá 0.768 50% Rusia 0.755 Costa Rica 0.744 40% Belice 0.741 30% Venezuela 0.735 Jamaica 0.727 20% Perú 0.725 Ecuador 0.72 10% Brazil 0.718 Colombia 0.71 0% Dominican… 0.689 Peru (1997-2003) Chile (1990-2006) Colombia (1991-2005) Costa Rica (1990-2007) Argentina (1990-2006) Honduras (1990-2007) Panama (1991-2007) Brazil (1990-2007) México (1989-2006) Dominican Rep. (1997-2007) China 0.687 Surinam 0.68 El Salvador 0.674 Paraguay 0.665 Bolivia 0.663 Guayana 0.633 Honduras 0.625 Sudáfrica 0.619 Nicaragua 0.589 Guatemala 0.574 India 0.547 Hatí 0.454 0 0.2 0.4 0.6 0.8 1Source:United Nations Development Programme. Source: Economic Commission for Latin America Review 103, April 2011.
  7. 7. 7Short-Term Economic ChallengesGlobal DecelerationUS Exports Markets Diversification and Domestic MarketChina Hedge Commodity PricesInflationary PressuresLiquidity Stimulus Monetary DisciplineCountercyclical Policies Fiscal Consolidation Stabilization Funds and Fiscal RulesFinancial SystemCredit Expansion Prudential RegulationReversion of External Flows Development BanksEurope Banking Supervision
  8. 8. 8Sustainable and Inclusive GrowthPoverty and Inequality Productivity Reduction Education Infrastructure Innovation Cash Broader Tech IntensiveConditional Coverage Transport Transfer R&DPrograms Energy Improve Agencies andSocial Safety Quality Telecomm Funds Net More Revenues used Effectively, Efficiently and Transparently
  9. 9. 9 Latin America is increasing its exports of manufactured goods Total Goods Exports for Selected Latin American Countries in 2010 (Percentage)100%90% 33% 30%80% 50% 52%70% 62%60% 81%50% 45%40% 60%30% 45% 47%20% 36% 16% 25%10% 5% 8% 0% 1% 2% 3% Argentina Brazil Chile Colombia Mexico Peru Other Transactions Primary Products ManufacturesSource: Economic Commission for Latin America.
  10. 10. 10 The share of exports of technology manufacture goods is increasing Manufactured Goods Exports for Selected Latin American Countries in 2010 (Percentage)100% 3% 5% 5%90% 2% 6% 10% 26%80% 22% 19%70%60% 7%50% 4% 6% 55% 37%40% 24%30% 15%20% 21% 21% 9%10% 9% 0% Argentina Brazil Chile Colombia Mexico Peru Natural Resource-Based Low-Tech Medium-Tech High-Tech Source: Economic Commission for Latin America.
  11. 11. LATIN AMERICAECONOMIC RISEERNESTO CORDERO-ARROYO15th Annual Harvard Latino LawPolicy and Business ConferenceApril 13, 2012

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