Creative industries in the Caribbean: a new road for diversification and export growth

Includes bibliography

Profit margins, financing and investment in the Peruvian business sector (1998-2008)

Includes bibliography

Chinese foreign direct investment in Latin America and the Caribbean

Includes bibliography.

Chinese foreign direct investment in Latin America and the Caribbean: China-Latin America cross-council taskforce. Working document

Although Chinese corporations were relatively unknown in Latin America until a few years ago, their direct investments in the region have averaged about US$10 billion per year since 2010. Their presence and economic leverage have become very significant in many industries and countries of the region, but their motivation, strategy and procedures are not always well understood by Latin America’s governments, businesses and civil society. Similarly, Chinese companies still need to gain a better understanding of Latin America’s business environment and opportunities. This working document is an input for discussing the future of Chinese foreign direct investment (FDI) in Latin America at the China - Latin America cross-council taskforce at the Summit on the Global Agenda, to be held under the auspices of the World Economic Forum (WEF), in Abu Dhabi on 18-20 November 2013. It was prepared jointly by Taotao Chen, Professor of Finance of the School of Economics and Management of Tsinghua University in China and member of the WEF Global Agenda Council on China, and by Miguel Pérez Ludeña, Economic Affairs Officer at the Economic Commission for Latin America and the Caribbean (ECLAC), under the supervision of Alicia Bárcena, Executive Secretary of ECLAC and Vice-Chair of the WEF Global Agenda Council on Latin America.

Latin America’s competitive position in knowledge-intensive services trade

This study presents a dynamic analysis of Latin America's competitiveness in trade in knowledge-intensive services. The methodology used to undertake this analysis is based on the Tradecan approach developed by the Economic Commission for Latin America and the Caribbean (ECLAC), which provides a means of assessing different countries' competitiveness by looking at their exports to the fastest-growing markets. (In the past, it has usually been applied primarily to exports of goods.) The results suggest that, although some Latin American countries have made inroads in knowledge-intensive service segments and have comparative advantages in them, the percentage of "rising stars" (dynamic sectors in which a country or region is gaining in market share) is still low, while there is a high percentage of "missed opportunities" (dynamic sectors in which a country or region is losing market share). This points up the existence of areas in which the region's competitive position is weak and in which policies are needed to leverage its competitive advantages and remove the obstacles that are holding it back from establishing a more advantageous position in knowledge-intensive service markets.

The employment situation in Latin America and the Caribbean: Countercyclical policies for a sustained recovery in employment

Latin America and the Caribbean experienced an unexpectedly vigorous economic recovery in 2010 after the output contraction of 2009. This upturn was reflected in the region’s employment and unemployment rates, which resumed the positive trends that had been broken by the crisis, and formal wages rose slightly. The strength of the recovery and labour-market performance varied markedly across subregions and countries, however. The first part of this joint ECLAC/ILO publication on the employment situation in Latin America and the Caribbean looks at how labour markets have responded to the rapid economic upswing in 2010 and early 2011, highlighting both the significant advances achieved in the post-crisis period and the sharp differences evident across subregions and countries. As well as tapping into the improved external conditions which followed upon the Asianled global economic upturn, several Latin American countries were also able to contain the impacts of the crisis and underpin their own recovery with countercyclical policies, thanks to the leeway gained by their macroeconomic management during the run of growth from 2003 to 2008. These countries were in a position to implement expansionary fiscal and monetary policies, some of which channelled higher fiscal spending through labour-market policies or softened the impact of the crisis on employment and income, as discussed in previous ECLAC/ILO bulletins. Since the region is fairly new to the use of countercyclical policies, the second part of this document reviews the experiences arising from those policies and considers lessons for institutionalizing them. Economic growth in the Latin American and Caribbean region has historically been marked by the volatility of its economic cycles, with high-growth periods being succeeded by deep crises. Volatility has conspired against the use of production resources over extended periods and short growth horizons have impeded investment in capital and labour. In the recent international crisis, the deployment of countercyclical macroeconomic policy helped to reduce the depth and duration of the impact and to leverage a more rapid recovery. It is therefore worth looking at the fundamentals of a long-term countercyclical macroeconomic policy which would provide the tools needed to deal with future crises and pave the way for economic growth that may be sustained over time. A special factor during this crisis was that a greater effort was made to support employment and income. Several of the labour-market policy measures taken acted as vehicles for conveying increased fiscal spending to individuals, reflecting greater consideration for equality concerns. Indeed, these measures were aimed not only at stabilizing andstrengthening domestic demand per se, but also at preventing the crisis from hitting lowest-income households the hardest, as had occurred in previous episodes. And —again unlike the pattern seen in previous episodes— inflation actually fell during the crisis as the high food and fuel prices seen in the run-up to it eased as a result of both existing macroeconomic policies and global conditions. This averted the surge in inequality so often seen in previous crises. Two caveats must be added, however. First, not all the countries were in a position to deploy strong countercyclical policies. Many simply lacked the fiscal space to do so. Second, some countries took this sort of measure more as an ad hoc response to the crisis than as part of a clearly established countercyclical policy strategy. The challenge, then, is to institutionalize a countercyclical approach throughout the economic cycle. Taking up this challenge is part of making economic growth more sustainable. This year —2011— was ushered in by rapid economic growth and substantial improvements in labour indicators. With the region’s GDP projected to grow well over 4% this year, ECLAC and ILO estimate that the regional unemployment rate will fall substantially again, from 7.3% in 2010 to between 6.7% and 7.0% in 2011.