The economics of climate change in Latin America and the Caribbean: Paradoxes and challenges of sustainable development

The robust growth of Latin American and Caribbean economies in recent years has led to an improvement in economic and social conditions in the region. It has also had collateral negative effects, however, such as more air pollution in urban areas and a serious deterioration of various natural assets, including non-renewable resources, water resources and forests. There are economies and societies within the region that are highly vulnerable to all sorts of adverse impacts of climate change, and whose production structures and consumption patterns still tend to leave a large carbon footprint. This situation has reached the point of undermining the foundations of the region’s economic buoyancy. Latin America and the Caribbean therefore needs to make the transition in the years to come towards a sustainable form of development that will preserve its economic, social and natural assets for future generations and leave them with a legacy of a more equal, more socially inclusive, low-carbon form of economic growth. Viewed from this standpoint, the climate change challenge is also a sustainable development challenge, and if it is to be addressed successfully, a global consensus that recognizes the asymmetries and paradoxes of the problem will have to be reached..

Social protection systems in Latin America and the Caribbean: a comparative view

This report pursues three complementary aims. Firstly, it presents the first generation of country case studies on social protection systems in Latin America and the Caribbean, published in the ECLAC Project Documents collection; and it provides justifications for developing such systems. Secondly, it sets out a classificatory approach to social protection system in the region, which aims to provide a comparative basis for interpreting national cases. Lastly, using standardized data and case studies, it identifies major trends in the changes the region is undergoing in terms of social protection.

Prevention of Money Laundering and of the Financing of Terrorism to Ensure the Integrity of Financial Markets in Latin America and the Caribbean

This paper reviews the current status of the international fight against money laundering and the financing of terrorism, highlighting the importance of its prevention for economic and financial stability in Latin America and the Caribbean. It synthesizes the recent history of international legislation and agreements with respect to the issues, and presents the framework of public and private sector actors engaged in combating these threats. It reviews Latin American and Caribbean countries’ compliance with the Financial Action Task Force (FATF) (40 + 9) Recommendations, and analyzes the region’s performance with respect to their third round Mutual Evaluation Reports.

Capital Flows to Latin America and the Caribbean: Recent Developments

For six years, the global economy has been driven by the U.S. Federal Reserve’s policies of easy money. Liquidity has flowed from developed to developing economies, financing infrastructure and corporate investment and allowing consumers to indulge in credit-fuelled retail spending. Thus the effective ending of the Fed’s third round of asset purchases (QE3) at the end of October represents both a watershed and the beginning of a new stage in the world economy. The end of asset-purchases comes at a challenging time for emerging markets, with China’s economy slowing, the Euro zone struggling to avoid a recession and the Japanese economy already in recession. The unwinding of the U.S. monetary stimulus, while the European Central Bank and the Bank of Japan step up their monetary stimulus, has underpinned an appreciation by the U.S. dollar, in which most commodities are priced. An appreciated dollar makes dollar-denominated commodities more expensive to buyers, thereby creating pressure for sellers to lower their prices. Latin American markets ended the third quarter of 2014 under pressure from a stronger U.S. dollar. In this changing external context, there are many signs that a slowdown in Latin American and Caribbean (LAC) financial markets, particularly debt markets, which have been breaking issuance records for the past six years, may slowdown from now on. Commodity prices – including those of oil, base metals and some goods – are in a prolonged slump. The Bloomberg commodity price index, a benchmark of commodity investments, has fallen to a five-year low as China’s economy slows down, and with it the demand for commodities. Investment into the LAC region has decelerated, in large part because of a deceleration of mining investments. Latin American currencies have suffered depreciations, as current account deficits have widening for a number of countries. And LAC companies, having issued record amounts of foreign currency bonds may now struggle to service their debt. In October, credit-rating agency Moody’s downgraded the bonds of Brazil’s Petrobras to tow notches above speculative grade because of the impact of falling oil prices and the weaker real on its debt. Growth prospects look brighter in 2015 relative to 2014, but a strengthening U.S. dollar, uneven global growth and weakness in commodity prices are skewing the risk toward the downside for the 2015 forecasts across the region. The Institute of International Finance expects the strengthening of the dollar to have a divergent impact across the region, however, depending on trade and financial linkages. The Institute of International Finance, Capital Flows to Emerging Markets, October 2, 2014. A stronger dollar lifts U.S. purchasing power, supporting exports, growth and capital inflows in countries with close trade links to the U.S. economy. However, rising dollar financing costs will increase pressure on countries with weak external positions. Given the effects of falling oil prices and a stronger dollar, some companies in the region, having issued record amounts of foreign currency bonds, may now struggle to service their debts. Prospects of Fed rate hikes resulting in tighter global liquidity amid the rapid rise in the corporate external bond stock has indeed raised concerns over some companies. However, there is still a shortage of bonds at a global level and the region still enjoys good economic policy management for the most part, so LAC debt markets may continue to enjoy momentum despite occasional bursts of high volatility – even if not at the record levels of recent years.

Economic growth and real volatility: The case of Latin America and the Caribbean

Using a new database of quarterly data for 21 countries of Latin America and the Caribbean for the 1990-2012 period, this document shows that the duration of GDP contractions appears to be a rather robust indicator of real volatility, and is negatively correlated with long run growth in Latin America and the Caribbean during the period. These results are consistent with different theoretical hypotheses in the literature that relate the duration of GDP contractions with economic growth. They also show that the relationship between real volatility and economic growth in the region is robust to the inclusion of external variables that control for external uncertainty and volatility.

Preliminary Overview of the Economies of Latin America and the Caribbean 1998

Includes bibliography.

Preliminary Overview of the Economies of Latin America and the Caribbean 1997

Incluye Bibliografía.

Preliminary Overview of the Economies of Latin America and the Caribbean 2014

This version of the Preliminary Overview of the Economies of Latin America and the Caribbean provides a development overview of the region’s economy in 2014 and growth projections for 2015.