A measurement of price levels and the purchasing power of currencies in Latin America, 1960-62

Includes bibliography

Comparative poverty assessment using purchasing power parities for low income households

Includes bibliography

Foreign Investment in Latin America and the Caribbean 1999

Includes bibliography

Trade, poverty and complementary policies in Latin America

Includes bibliography

Health management contracts in Costa Rica from a comparative perspective

Includes bibliography

Haití: evolución económica durante 2007 y perspectivas para 2008

Incluye Bibliografía

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.

The employment situation in Latin America and the Caribbean: Advances and challenges in measuring decent work

At 6.4%, the unemployment rate for the Latin American and Caribbean region overall was the lowest for the past few decades, down from 6.7% in 2011. This is significant, in view of the difficult employment situation prevailing in other world regions. Labour market indicators improved despite modest growth of just 3.0% in the region’s economy. Even with sharply rising labour market participation, the number of urban unemployed fell by around 400,000, on the back of relatively strong job creation. Nevertheless, around 15 million are still jobless in the region. Other highlights of 2012 labour market performance were that the gender gaps in labour market participation, unemployment and employment narrowed, albeit slightly; formal employment increased; the hourly underemployment rate declined; and average wages rose. This rendering was obviously not homogenous across the region. Labour market indicators worsened again in the Caribbean countries, for example, reflecting the sluggish performance of their economies. The sustainability of recent labour market progress is also a cause for concern. Most of the new jobs in the region were created as part of a self-perpetuating cycle in which new jobs and higher real wages (and greater access to credit) have boosted household purchasing power and so pushed up domestic demand. Much of this demand is for non-tradable goods and services (and imports), which has stimulated expansion of the tertiary sector and hence its demand for labour, and many of the new jobs have therefore arisen in these sectors of the economy. This dynamic certainly has positive implications in terms of labour and distribution, but the concern is whether it is sustainable in a context of still relatively low investment (even after some recent gains) which is, moreover, not structured in a manner conducive to diversifying production. Doubt hangs over the future growth of production capacity in the region, given the enormous challenges facing the region in terms of innovation, education quality, infrastructure and productivity. As vigorous job creation has driven progress in reducing unemployment, attention has turned once again to the characteristics of that employment. Awareness exists in the region that economic growth is essential, but not in itself sufficient to generate more and better jobs. For some time, ILO has been drawing attention to the fact that it is not enough to create any sort of employment. The concept of decent work, as proposed by ILO, emphasized the need for quality jobs which enshrine respect for fundamental rights at work. The United Nations General Assembly endorsed this notion and incorporated it into the targets set in the framework of the Millennium Development Goals. This eighth issue of the ECLAC/ILO publication “The employment situation in Latin America and the Caribbean” examines how the concept of decent work has evolved in the region, progress in measuring it and the challenges involved in building a system of decent work indicators, 14 years after the concept was first proposed. Although the concept of decent work has been accompanied since the outset by the challenge of measurement, its first objective was to generate a discussion on the best achievable labour practices in each country. Accordingly, rather than defining a universal threshold of what could be considered decent work —regarding which developed countries might have almost reached the target before starting, while poor countries could be left hopelessly behind— ILO called upon the countries to define their own criteria and measurements for promoting decent work policies. As a result, there is no shared set of variables for measuring decent work applicable to all countries. The suggestion is, instead, that countries move forward with measuring decent work on the basis of their own priorities, using the information they have available now and in the future. However, this strategy of progressing according to the data available in each country tends to complicate statistical comparison between them. So, once the countries have developed their respective systems of decent work indicators, it will be also be important to work towards harmonizing them. ECLAC and ILO are available to provide technical support to this end. With respect to 2013, there is cautious optimism regarding the performance of the region’s labour markets. If projections of a slight uptick —to 3.5%— in the region’s economic growth in 2013 are borne out, labour indicators should continue to gradually improve. This will bring new increases in real wages and a slight drop of up to 0.2 percentage points in the region’s unemployment rate, reflecting a fresh rise in the regional employment rate and slower growth in labour market participation.

Results of the International Comparison Program (ICP) 2011 for Latin America and the Caribbean

The International Comparison Programme (ICP) is a worldwide statistical project whose purpose is to collect comparative price data from a broad list or basket of products and to compile detailed values for spending-side gross domestic product (GDP) in order to calculate purchasing power parities (PPPs). Using PPPs, rather than market exchange rates, to convert macroeconomic aggregates aids comparison of production across economies and of the well-being of populations in real terms, insofar as they are compared on the basis of the purchasing power of each of the participant countries.