Latin America's Economic and Social
Prospects: Five Years after the Financial
Storm
Juan Carlos Moreno-Brid
Universidad Nacional Autónoma de México (UNAM)
With the assistance of Stefanie Garry
Economic Commission for Latin America and the Caribbean
(ECLAC)
Institute of the Americas, University College London, 21 May 2015
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Juan Carlos Moreno-Brid
London, 2015
Latin America: five years after the financial storm
 Stabilization and growth performance
 Social outcomes
 Policies, politics and perceptions
 Same challenges or new ones?
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Juan Carlos Moreno-Brid
London, 2015
The remains of the day post-2009:
economic stability and growth
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Juan Carlos Moreno-Brid
London, 2015
With notable exceptions in South America,
inflation has not significantly increased
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of official information
from the countries.
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Juan Carlos Moreno-Brid
London, 2015
Partly because, on average, fiscal deficits remain
low, though larger than in pre-crisis years
LATIN AMERICA AND THE CARIBBEAN : GDP GROWTH RATES, 2015a
(In percentages)
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of official information
from the countries.
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Juan Carlos Moreno-Brid
London, 2015
In fact, public debt has kept on its descending
path (as % of GDP)
Source: ECLAC Fiscal Panorama, 2015
Juan Carlos Moreno-Brid
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London, 2015
Virtually all across the region, debt ratios are
less than 40%, and no worse today than in 2000
Source: ECLAC Fiscal Panorama 2015
Juan Carlos Moreno-Brid
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London, 2015
Foreign reserves starkly augmented in 2003-09,
and then stabilized as % of GDP
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of official information
from the countries.
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Juan Carlos Moreno-Brid
London, 2015
So, stabilization has not been
weakened
What about growth?
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Juan Carlos Moreno-Brid
London, 2015
Well, world’s GDP and exports lost impetus postcrisis; markedly in Latin America
LAC´s terms of trade
sharply deteriorated post
2009
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Juan Carlos Moreno-Brid
London, 2015
Latin America´s GDP collapsed in 2009, strongly
recovered in 2010 and then lost steam
With scant exceptions LA
economies have not reduced
their GDP per capita gap with the
USA, in 2000-2014
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Juan Carlos Moreno-Brid
London, 2015
In the region the loss of GDP´s momentum is due
to investment and consumption´s slowdown
The “deficit” in
net exports
declined since
2010
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Juan Carlos Moreno-Brid
London, 2015
Growth expectations for 2015 are not rosy.
Overall the region’s GDP may grow less than 1%
Source: IMF.
Juan Carlos Moreno-Brid
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London, 2015
With this, the Region is, on average, back on to its
slow growth (cum strong stability) path before
the commodity boom
Source: A. de la Torre (2015).
Juan Carlos Moreno-Brid
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London, 2015
And on social indicators, How do we
stand today?
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Juan Carlos Moreno-Brid
London, 2015
First, Latin America´s impressive reduction of
poverty levels ceased, and may be reverted
Source: ECLAC based
on household
survey
tabulations.
Juan Carlos Moreno-Brid
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London, 2015
With major contrasts in progress and levels
within the region
Source: ECLAC based on household survey tabulations.
Juan Carlos Moreno-Brid
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London, 2015
Second, Latin America is still the most unequal
region in the world, tax policies being scantly
effective
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of official information
from the countries.
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Juan Carlos Moreno-Brid
London, 2015
How can fiscal policy be progressive with these
income tax rates for the richest decile?
Source: ECLAC, Fiscal Panorama, 2015
Juan Carlos Moreno-Brid
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London, 2015
Third, and old concern comes back: crime has
become the greatest cause of concern
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Juan Carlos Moreno-Brid
London, 2015
Crime is now seen as a major problem in
most countries
50
45
40
35
30
25
20
15
10
5
0
The Most Serious Problem in Their Country (Percentage of
Survey Respondents)
Education problems
Unemployment
Corruption
Crime /Public Security
Source: Latinobarómetro, 2013.
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Juan Carlos Moreno-Brid
London, 2015
Violence and crime are systematically affecting
our youngsters
Source: ECLAC.
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Juan Carlos Moreno-Brid
London, 2015
The view after the storm: looking back
not in anger but in frustration
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Juan Carlos Moreno-Brid
London, 2015
Three conclusions

I. The Financial Storm affected LAC by ending the
commodity boom. Not a single bank collapsed in LAC.

II. Back to Square 1? Not exactly but Stable and Slow, Poor
and Unequal!
III. There is need for a new agenda for development.




Place the reduction of inequality as a key priority
Revamp the external engine of growth, restart the
domestic one
Promote structural transformation from natural
resources to value added
Preserve economic stabilization, with a fiscal reform
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Juan Carlos Moreno-Brid
London, 2015
After the storm there is need to find a
new road for the LAC wagon, but to be
pulled by the same oxen?
Policies, perceptions and politics
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Juan Carlos Moreno-Brid
London, 2015
Some strange news: the proportion of the
population that see the economy in good shape
has been increasing
Would You Consider that the Economy is Good or Very Good
(% of Survey Respondents)
By Country, 2013
Latin America, 1996-2013
30
25
25
21
20
18
18
16
17
18
15
10
8
10
11
8 8
7
8
7
8
5
1996
1997
1998
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2013
0
Latin America
Honduras
Guatemala
Dominican Republic
Mexico
Paraguay
Colombia
Costa Rica
Peru
Bolivia
Venezuela
El Salvador
Brazil
Nicaragua
Argentina
Chile
Panama
Uruguay
Ecuador
6
7
0
25
10
10
10
17
17
19
21
22
23
23
26
26
26
20
30
34
40
44
47
50
Source: Latinobarómetro.
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Juan Carlos Moreno-Brid
London, 2015
57
60
And satisfaction with democracy has kept
strengthening
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Juan Carlos Moreno-Brid
London, 2015
But government approval ratings have been
falling since 2009
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Juan Carlos Moreno-Brid
London, 2015
Perhaps linked to the increase in public
perception of corruption (data for 2013, today?)
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Juan Carlos Moreno-Brid
London, 2015
And trust in the key institutions of democracy is
pathetic
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Juan Carlos Moreno-Brid
London, 2015
There is urgent need for a new agenda
for development post 2009, but with key
democratic institutions and many
governments´ legitimacies in question,
some of them severely on charges of
corruption and conflict of interests.
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Juan Carlos Moreno-Brid
London, 2015
In this political scenario, who may
effectively push for a new development
agenda to move from stability to growth
with equality?
How likely is it to succeed given the
current weak, volatile economic global
economy and our traditional reluctance
to improve equality?
What will happen social and politically if
nothing happens economically?
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Juan Carlos Moreno-Brid
London, 2015
Thank you!
Juan Carlos Moreno-Brid
juancarlosmorenobrid@gmail.com
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Juan Carlos Moreno-Brid
London, 2015
Latin America's Economic and Social
Prospects: Five Years after the Financial
Storm
Juan Carlos Moreno-Brid
Universidad Nacional Autónoma de México (UNAM)
With the assistance of Stefanie Garry
Economic Commission for Latin America and the Caribbean
(ECLAC)
Institute of the Americas, University College London, 21 May 2015
34
Juan Carlos Moreno-Brid
London, 2015