SANTIAGO DE CHILE, 25 August 2009: The volume of trade in Latin America and the Caribbean will drop 13 per cent in 2009, surpassing the 10 per cent decline in world trade expected this year, stated the UN Economic Commission for Latinamerica and the Caribbean, ECLAC, in its most recent report.
This confirms that the sector most affected by the global economic crisis in the region is trade, which is suffering an unprecedented contraction.
The volume of exports from the region will decrease 11 per cent, the worst figure in 72 years (since 1937), while imports will diminish 14 per cent, the steepest drop in 27 years (since 1982), according to the report Latin America and the Caribbean in the World Economy 2008-2009: Crisis and opportunities for regional cooperation, launched Tuesday by ECLAC Executive Secretary Alicia Bárcena at ECLAC headquarters in Santiago.
– Policies to reactivate trade are urgently needed, because the post-crisis future will continue to reward economies with a greater focus on exports and advances in terms of competitiveness and technological innovation, said Bárcena.
The decline in trade has been caused by a strong contraction of world demand, lower prices of some basic commodities, difficulties in financing for trade and the pro-cyclical performance of intra-regional trade flows, particularly in South America.
In spite of the strong contraction in trade, the report underscores that the region has addressed the effects of the current crisis better than during prior crises, due especially to the strong macroeconomic scenario that resulted from the favorable economic cycle in 2003-2007.
ECLAC estimates that after a two to three-year slowdown, international trade should once again become a source of opportunities, and the region should be prepared for that.
According to ECLAC, the world crisis has been transmitted to the real economies of the region through four channels: foreign direct investment, emigrant remittances, commodity prices and trade. Services and tourism also suffered the effects of the crisis.
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