The employment situation in Latin America and the Caribbean: Crisis in the labour markets and countercyclical responses

As predicted in the first bulletin, produced jointly by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO), the impact of the economic crisis continued to be felt in Latin America and the Caribbean during the second quarter of 2009. Regional exports of goods and services contracted in response to sluggish demand on international markets, while remittances and foreign direct investment flows continued to fall, credit lost its buoyancy and the total wage bill diminished, owing mainly to job losses. As a result, the growth forecasts of many countries had to be adjusted downwards. Since the end of 2008, the countries of the region had started to implement countercyclical policies —albeit with significant differences— in an effort to use public spending to counter flagging investment and consumer-spending levels and boost aggregate demand. In this second bulletin, ECLAC and ILO show how the impact of the crisis has deepened in labour markets in the region in the first half of the year and examine existing options and the outcome of public-infrastructure and emergency employment programmes designed to mitigate the impact of the crisis on the labour market. The unemployment rate has risen in practically all countries compared with the previous year and this situation worsened further in the second quarter, when urban unemployment exceeded the rate of the corresponding period in 2008 by 1 percentage point (to stand at 8.5%, up from 7.5%), while in the first quarter, the variation was 0.6 of a percentage point. Labour indicators also point to an increase in informality, a decline in employment with social protection and a decrease in full-time employment. Labour-market trends observed in the first half-year, together with the forecast for a 1.9% decline in regional GDP in 2009, suggest that the average annual rate of urban unemployment in the region will be close to 8.5%. This forecast is slightly less pessimistic than the estimate given in the first bulletin; this is attributable to the fall in the participation rate in the first half-year to levels that are expected to remain low for the rest of the year. Without this reduction in the labour supply, due largely to the “discouragement effect”, the annual average urban unemployment rate would stand at between 8.8% and 8.9%. Thus, the open urban unemployment figure would increase by 2.5 million and if the “discouraged job-seekers” are included, then the number of additional persons not finding a niche in the urban labour market would climb to 3.2 million. In the region, as in the rest of the world, there are signs that the crisis may have reached bottom in the middle of the year. In many countries, production levels have ceased their decline and there are indications of an incipient recovery leading to cautious optimism that there may be a moderate upturn in labour markets in the fourth quarter. The pace of recovery will vary from one country to the next and is expected to be gradual at best. Even with the return to a growth path, there should be no illusion that the labour problems will immediately disappear. First, the recovery in employment is expected to lag behind the upturn in economic activity. Second, since economic growth is likely to remain moderate in the short term and well below the rates recorded between late 2003 and mid-2008, demand for labour and consequently the generation of good-quality jobs will continue to be weak. Thus, countries should not relax their efforts to defend and create decent jobs, but rather should take steps to improve the effectiveness and efficiency of available instruments. In this way, the region will be in a better position not only to confront the challenges of economic recovery, but also to strengthen the foundations for social inclusion and for advancing under more favourable conditions towards fulfilment of the Millennium Development Goals.

Preliminary Overview of the Economies of Latin America and the Caribbean 2005

Includes bibliography

Preliminary Overview of the Economies of Latin America and the Caribbean 2010

Includes bibliography

E-business innovation and customs renovation for secure supply chain management

Includes bibliography

Science and technology policies in open economies: the case of Latin America and the Caribbean

Includes bibliography

Weak expansions: a distinctive feature of the business cycle in Latin America and the Caribbean

Using two standard cycle methodologies (Classical and Deviation Cycle) and a comprehensive sample of 83 countries worldwide, including all developing regions, we show that the Latin American and Caribbean cycle exhibits two distinctive features. First, and most importantly, its expansion performance is shorter and for the most par less imtense than that of the rest of the regions considered, and in particular than that of East Asia and the Pacific, East Asia and the Pacific's expansions last five years longer than those of LAC, and its output gain is 50% greater than that of LAC. Second, LAC tends to exhibit contractions that are not significantly different in terms of duration and amplitude than t those of other regions. Both these features imply that the complete Latin American and Caribbean cycle has, overall, the shortest duration and smallest amplitude in relation to other regions. The specificities of the Latin American and Caribbean cycle are not confined to the short run. These are also reflected in variables such as productivity and investment, which are linked to long-run growth. East Asia and the Pacific's cumulative gain in labor productivity during the expansionary phase is twice that of LAC. Moreover, the evidence also shows that the effects of the contraction in public investment surpass those of the expansion leading to a declining trend over the entire cycle. In this sense we suggest that policy analysis needs to increase its focus on the expansionary phase of the cycle. Improving our knowledge of the differences in the expansionary dynamics of countries and regions, can further our understanding of the differences in their rates of growth and levels of development. We also suggest that while, the management of the cycle affects the short-run fluctuations of economic activity and hence volatility, it is not trend neutral. Hence, the effects of aggregate demand management policies may be more persistent over time and less transitory than currently thought.

Employment, growth and reforms in Jamaica

Includes bibliography

Analysis of trade flows between Puerto Rico and CARICOM and prospects for integration

Includes bibliography

Macroeconomics for development in Latin America and the Caribbean: Some new considerations on countercyclicality

Includes bibliography.

An assessment of the economic impact of climate change on the water sector in the Turks and Caicos Islands

The best description of water resources for Grand Turk was offered by Pérez Monteagudo (2000) who suggested that rain water was insufficient to ensure a regular water supply although water catchment was being practised and water catchment possibilities had been analysed. Limestone islands, mostly flat and low lying, have few possibilities for large scale surface storage, and groundwater lenses exist in very delicate equilibrium with saline seawater, and are highly likely to collapse due to sea level rise, improper extraction, drought, tidal waves or other extreme event. A study on the impact of climate change on water resources in the Turks and Caicos Islands is a challenging task, due to the fact that the territory of the Islands covers different environmental resources and conditions, and accurate data are lacking. The present report is based on collected data wherever possible, including grey data from several sources such as the Intergovernmental Panel on Climate Change (IPCC) and Cuban meteorological service data sets. Other data were also used, including the author’s own estimates and modelling results. Although challenging, this was perhaps the best approach towards analysing the situation. Furthermore, IPCC A2 and B2 scenarios were used in the present study in an effort to reduce uncertainty. The main conclusion from the scenario approach is that the trend observed in precipitation during the period 1961 - 1990 is decreasing. Similar behaviour was observed in the Caribbean region. This trend is associated with meteorological causes, particularly with the influence of the North Atlantic Anticyclone. The annual decrease in precipitation is estimated to be between 30-40% with uncertain impacts on marine resources. After an assessment of fresh water resources in Turks and Caicos Islands, the next step was to estimate residential water demand based on a high fertility rate scenario for the Islands (one selected from four scenarios and compared to countries having similar characteristics). The selected scenario presents higher projections on consumption growth, enabling better preparation for growing water demand. Water demand by tourists (stopover and excursionists, mainly cruise passengers) was also obtained, based on international daily consumption estimates. Tourism demand forecasts for Turks and Caicos Islands encompass the forty years between 2011 and 2050 and were obtained by means of an Artificial Neural Networks approach. for the A2 and B2 scenarios, resulting in the relation BAU>B2>A2 in terms of tourist arrivals and water demand levels from tourism. Adaptation options and policies were analysed. Resolving the issue of the best technology to be used for Turks and Caicos Islands is not directly related to climate change. Total estimated water storage capacity is about 1, 270, 800 m3/ year with 80% capacity load for three plants. However, almost 11 desalination plants have been detected on Turks and Caicos Islands. Without more data, it is not possible to estimate long term investment to match possible water demand and more complex adaptation options. One climate change adaptation option would be the construction of elevated (30 metres or higher) storm resistant water reservoirs. The unit cost of the storage capacity is the sum of capital costs and operational and maintenance costs. Electricity costs to pump water are optional as water should, and could, be stored for several months. The costs arising for water storage are in the range of US$ 0.22 cents/m3 without electricity costs. Pérez Monteagudo (2000) estimated water prices at around US$ 2.64/m3 in stand points, US$ 7.92 /m3 for government offices, and US$ 13.2 /m3for cistern truck vehicles. These data need to be updated. As Turks and Caicos Islands continues to depend on tourism and Reverse Osmosis (RO) for obtaining fresh water, an unavoidable condition to maintaining and increasing gross domestic product(GDP) and population welfare, dependence on fossil fuels and vulnerability to increasingly volatile prices will constitute an important restriction. In this sense, mitigation supposes a synergy with adaptation. Energy demand and emissions of carbon dioxide (CO2) were also estimated using an emissions factor of 2. 6 tCO2/ tonne of oil equivalent (toe). Assuming a population of 33,000 inhabitants, primary energy demand was estimated for Turks and Caicos Islands at 110,000 toe with electricity demand of around 110 GWh. The business as usual (BAU), as well as the mitigation scenarios were estimated. The BAU scenario suggests that energy use should be supported by imported fossil fuels with important improvements in energy efficiency. The mitigation scenario explores the use of photovoltaic and concentrating solar power, and wind energy. As this is a preliminary study, the local potential and locations need to be identified to provide more relevant estimates. Macroeconomic assumptions are the same for both scenarios. By 2050, Turks and Caicos Islands could demand 60 m toe less than for the BAU scenario.

Meta-analysis of the income and price elasticities of gasoline demand: public policy implications for Latin America

By means of a meta-analysis, this article sets out to estimate average values for the income and price elasticities of gasoline demand and to analyse the reasons for the variations in the elasticities reported by the literature. The findings show that there is publication bias, that the volatility of elasticity estimates is not due to sampling errors alone, and that there are systematic factors explaining these differences. The income and price elasticities of gasoline demand differ between the short and long run and by region, and the estimation can appropriately include the vehicle fleet and the prices of substitute goods, the data types and the estimation methods used. The presence of a low price elasticity suggests that a fuel tax will be inadequate to control rising consumption in a context of rapid economic growth.

Preliminary Overview of the Economies of Latin America and the Caribbean 1999

Includes bibliography

Preliminary Overview of the Economies of Latin America and the Caribbean 2006

Includes bibliography

Preliminary Overview of the Economies of Latin America and the Caribbean 2008

Includes bibliography

Economic Survey of Latin America and the Caribbean 2009-2010: The distributive impact of public policies

Includes bibliography