SANTIAGO DE CHILE, 06 August 2009: The global financial crisis will have lasting consequences on the real economy of Latin American and Caribbean countries – among them, greater unemployment, lower economic growth, falling trade and fiscal deficits hard to revert, said ECLAC (UN Economc Commission for Latin America and the Caribbean) Executive Secretary Alicia Bárcena.
Bárcena inaugurated the seminar The “Real” Impact of the Global Economic Crisis: A Latin American and Caribbean Perspective, which opened the Summer School on Latin American Economies 2009 organized by ECLAC’s Production, Productivity and Management Division.
Bárcena explained the effects of the crisis in the region through four transmission channels: financial contagion, falling remittances, shrinking external demand and changes in the relative price of exports.
One of the sectors most affected by the crisis in the region is trade, she said. In April, trade fell 31.8 per cent with regard to the same month last year. Exports dropped 29.2 per cent, while imports decreased 34.6 per cent during the same period.
Remittances to the region are expected to decrease 5 -10 per cent this year, while foreign direct investment will fall between 35 – 45 per cent. Regional unemployment is estimated to rise up to 9 per cent.
The international competitiveness of countries in the region has been limited to sectors intensive in natural resources, said Bárcena, making it urgent to enhance capabilities to add more value to commodity exports.
Although there have been some signs of economic recovery, Bárcena warned that this will be a slow and gradual process. Social indicators generally take twice as long to recover as economic ones, as seen during the crisis in the eighties, when social indicators took 24 years in reaching pre-crisis levels, while economic indicators took 12 years.
The future panorama is one of lower growth in developed countries, more participation of developing countries in global growth, stricter regulations on financial systems and greater conditioning as a result of climate change.
The Summer School is an annual course aimed at post-graduate students and those interested in pursuing advanced studies in economics. The 29 students attending this year come from Argentina, Belgium, Bolivia, Canada, Korea, Chile, Ecuador, France, Italy, Mexico and Spain.
The inaugural seminar counted with the participation of Joseph Ramos, professor of the Faculty of Economy of the University of Chile; Jorge Katz, professor and researcher at the Intelis I+E Center of the Department of Economy of the University of Chile; João Carlos Ferraz, head of Planning, Risk Management and Research and Economic Accompaniment at the National Bank for Economic and Social Development of Brazil (BNDES), and Wilson Peres, Head of the Investment and Corporate Strategies Unit at ECLAC.
Experts from ECLAC and other international organizations also spoke on the impact of the crisis on the economies of Argentina, Brazil, Central America and Mexico.
Kilde: www.eclac.org
