Policy Challenges in Latin America in the Next Decades: Opportunities for Complementarity with Asia |

Policy Challenges in Latin America in the Next Decades: Opportunities for Complementarity with Asia



Latin American countries have made meaningful progress in recent decades to strengthen their macroeconomic positions, leaving behind decades of instability. Most of these economies have developed well-balanced policy frameworks based on three pillars: i) prudent fiscal, monetary and exchange rate policies; ii) elevated trade openness and integration; and iii) ample liquidity buffers, including sound financial systems and the buildup of sizeable stocks of foreign reserves. The extraordinarily long period of expansionary policies in developed countries has also helped to underpin investment and invigorate economic growth.

As a result of countercyclical policies, Latin American countries were also better prepared to withstand external shocks such as sudden shifts in capital flows and terms of trade. Sound macro frameworks eased the adjustment to policy normalization in developed countries and, unlike in past episodes, contributed to avoid financial crises.

Structural and institutional shortcomings, however, remain. This has weighed on productivity growth, which lagged behind other EMEs, discouraging investment and savings. The lack of infrastructure, for instance, has reduced private sector competitiveness and, ultimately, weakened trend growth, increasing social tensions. Thus, countries (some more decisively than others) have steadily moved to introduce productivity-enhancing reforms in order to promote competition in key input markets, lower costs and boost competitiveness, particularly in the non-tradable sector.

While south-south trade and financial flows have increased significantly over the last decades, these structural reforms, combined with strong macroeconomic frameworks, set the foundations for increased partnership opportunities between Asia and Latin America.


Mr Martin Redrado, Former Governor, Central Bank of Argentina; Chairman, Fundacion Capital

Thursday, 10 April 2014
5:15 p.m. - 6:30 p.m.

Seminar Room 3-1,
Manasseh Meyer,
Lee Kuan Yew School of Public Policy,
469C Bukit Timah Road,
Singapore 259772

Seats are limited and will be available on a first-come, first-served basis. Kindly register your interest in attending online.

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