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.

Revista de la CEPAL no.82

Los laberintos del orden internacional: La importación de reformas / David Ibarra. -- Comportamiento paradójico de la banca extranjera en América Latina / Graciela Moguillansky, Rogerio Studart y Sebastián Vergara. -- Una propuesta de gravar con impuestos unitarios las ganancias de las empresas transnacionales / Andrew Mold. -- La integración regional y la coordinación macroeconómica en América Latina / Hubert Escaith. -- La sustitución de importaciones en las industrias de alta tecnología: Prebisch renace en Asia / Alice H. Amsden. -- Competitividad industrial en Brasil 10 años después de la liberalización / João Carlos Ferraz, David Kupfer y Mariana Iootty. -- Influencia del origen del capital sobre los patrones del comercio exterior brasileño / Célio Hiratuka y Fernanda De Negri. -- Información y conocimiento: la difusión de las TIC en la industria manufacturera argentina / Gabriel Yoguel, Marta Novick, Darío Milesi, Sonia Roitter y José Borello. -- Desarrollo económico local y descentralización en América Latina / Francisco Alburquerque. -- Migraciones, mercado de trabajo y pobreza en el Gran Buenos Aires / Rosalía Cortés y Fernando Groisman. -- Hogares, pobreza y políticas en épocas de crisis. México, 1992-1996 / Benjamín Davis, Sudhanshu Handa y Humberto Soto. -- La Revista en Internet. -- Publicaciones recientes de la CEPAL.

CEPAL Review no.82

The devious maze of the international order: the importation of reforms / David Ibarra. -- Foreign banks in Latin America: a paradoxical result / Graciela Moguillansky, Rogerio Studart and Sebastián Vergara. -- A proposal for unitary taxes on the profits of transnational corporations / Andrew Mold. -- Regional integration and macroeconomic coordination in Latin America / Hubert Escaith. -- Import substitution in high-tech industries: Prebisch lives in Asia! / Alice H. Amsden. -- Industrial competitiveness in Brazil ten years after economic liberalization / João Carlos Ferraz, David Kupfer and Mariana Iootty. -- The influence of capital origin on Brazilian foreign trade patterns / Célio Hiratuka and Fernanda De Negri. -- Information and knowledge: the diffusion of information and communication technologies in the Argentine manufacturing sector / Gabriel Yoguel, Marta Novick, Darío Milesi, Sonia Roitter and José Borello. -- Local economic development and decentralization in Latin America / Francisco Alburquerque, in memory of Gabriel Aghón. -- Migrations, the labour market and poverty in Greater Buenos Aires / Rosalía Cortés and Fernando Groisman. -- Households, poverty and policy in times of crisis. Mexico, 1992-1996 / Benjamin Davis, Sudhanshu Handa and Humberto Soto. -- CEPAL Review on the Internet. -- Recent ECLAC publications.

El desafío de la sostenibilidad ambiental en América Latina y el Caribe. Textos seleccionados 2012-2014

Prólogo de Alicia Bárcena.

Por um desenvolvimento inclusivo: O caso do Brasil

Este livro visa analisar a vigência do conceito de heterogeneidade estrutural como parte do funcionamento da economia brasileira. Neste contexto, inclui uma análise das características e implicacões socioeconômicas das diferenças morfológicas e da dinâmica dos diferentes segmentos da estrutura produtiva do país. 0 Estudo começa analisando o desenvolvimento da heterogeneidade estrutural do Brasil, ou seja, a dinâmica da estrutura produtiva, a distribuição da renda e da ocupação no período de 1950 a 2009. A partir deste diagnóstico global, se realiza um exame da heterogeneidade produtiva, desde o ponto de vista setorial –incluindo a agricultura e a indústria– considerando, além disso, as diferenças regionais do país. Também são analisados temas específicos relacionados com a heterogeneidade produtiva, como é o tamanho das empresas e a desigualdade dos salários. Finalmente, é apresentado um exercício de convergência produtiva, mediante o qual se estima a magnitude dos recursos necessários e prazos para que a economia brasileira se situe no "umbral do desenvolvimento".

Globalización y desarrollo: desafíos de Puerto Rico frente al siglo XXI

Incluye bibliografía.

Revista de la CEPAL no.67

Primer Mundo y Tercer Mundo después de la Guerra Fría / Eric Hobsbawm. -- Las dimensiones urbanas en el desarrollo rural / Alexander Schejtman. -- Capacitación en pequeñas empresas en América Latina / Guillermo Labarca. -- Reforma neoliberal y política macroeconómica en el Perú / Oscar Dancourt. -- Impacto de la inversión pública sobre la inversión privada en Brasil: 1947-1990 / Bruno de Oliveira Cruz y Joanílio R. Teixeira. -- Chile y su política comercial “lateral” / Sebastián Sáez y Juan Gabriel Valdés S. -- La reestructuración en la industria: los casos de Chile, México y Venezuela / Carla Macario. -- Industrialización a base de confecciones en la Cuenca del Caribe: ¿un tejido raído? / Michael Mortimore. -- Industria maquiladora y cambio técnico / Rudolf M. Buitelaar, Ramón Padilla y Ruth Urrutia. -- Políticas de ciencia y tecnología y el Sistema Nacional de Innovación en la Argentina / Daniel Chudnovsky. -- Las concesiones y la optimización del transporte vial y ferroviario / Ian Thomson.

Cambio estructural para la igualdad: una visión integrada del desarrollo. Trigésimo cuarto período de sesiones de la CEPAL

Este documento forma parte de la "Trilogía de la Igualdad"

Revista de la CEPAL no.60

La evolución de las ideas y las políticas para el desarrollo / Gert Rosenthal. -- Políticas macroeconómicas para el crecimiento / Ricardo Ffrench-Davis. -- Flujos de capitales: lecciones a partir de la experiencia chilena / Eduardo Aninat, Christian Larraín. -- La transformación del desarrollo industrial de América Latina / José Miguel Benavente, Gustavo Crespi, Jorge Katz, Giovanni Stampo. -- Las reformas de las pensiones en América Latina y la posición de los organismos internacionales / Carmelo Mesa-Lago. -- Aportes de la antropología aplicada al desarrollo campesino / John Durston. -- Prospección de la biodiversidad: potencialidades para los países en desarrollo / Julie M. Feinsilver. -- La inversión extranjera y el desarrollo competitivo en América Latina y el Caribe / Alejandro C. Vera-Vassallo. -- La crisis del peso mexicano / Stephany Griffith-Jones.

CEPAL Review no.60

Development thinking and policies: the way ahead / Gert Rosenthal. -- Macroeconomic policies for growth / Ricardo Ffrench-Davis. -- Capital flows: lessons from the Chilean experience / Eduardo Aninat, Christian Lorrain. -- Changes In the industrial development of Latin America / José Miguel Benavente, Gustavo Crespi, Jorge Katz, Giovanni Stumpo. -- Pension system reforms in Latin America: the position of the International organizations / Carmelo Mesa-Lago. -- The contributions of applied anthropology to peasant development / John Durston. -- Biodiversity prospecting: a new panacea for development? / Julie M. Feinsilver. -- Foreign Investment and competitive development In Latin America and the Caribbean / Alejandro C. Vera-Vassallo. -- The Mexican peso crisis / Stephany Grijfìth-Jones.

A crise do desenvolvimento brasileiro: dívida externa, condicionalidades e as relações com o Fundo Monetário Internacional e Banco Mundial (1974-1987)

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

为平等的结构改变 综合发展

In today's complex and changing global context, the Latin American and Caribbean region must persevere, more than ever, in three directions: structural change to underpin progress towards more knowledge-intensive sectors, convergence to reduce internal and external gaps in income and productivity, and equality of rights. This is the integrated approach proposed by ECLAC as a route towards the development the region needs. This implies tackling three major challenges: to achieve high and sustained rates of growth so as to close structural gaps and generate quality jobs; to change consumption and production patterns in the context of a genuine technological revolution with environmental sustainability; and to guarantee equality on the basis of greater convergence in the production structure, with universal social protection and capacity-building. Such an endeavour requires the return of politics and of the State's role in promoting investment and growth, redistribution and regulation with a view to structural change for equality, through industrial, macroeconomic, social and labour policies. These are some of the key proposals of Structural Change for Equality: An Integrated Approach to Development, which ECLAC will present to its member States at the thirty-fourth session of the Commission (San Salvador, August 2012). The proposals in that document, which is summarized here, deepen and broaden the ideas set forth in Time for equality: closing gaps, opening trails, aiming towards sustainable development with equality and taking into account the diverse national conditions across the region.

The United States subprime mortgage crisis and its implications for the Caribbean

The bursting of the property bubble – subprime mortgage crisis – in 2007 in the United States has engendered panic, recession fears and turmoil in the global financial system. Although the United States economy grew by 0.6 per cent in the last quarter of 2007, down from 4.9 per cent in the previous quarter, day by day worsening scenarios emerge, from escalating oil prices, to a depreciating dollar and financial institutions’ bailout by the Federal Reserve. Many economists and policy makers share the view that a subprime-led recession – i.e. two consecutive quarters with negative growth – is inevitable and will be much deeper and longer than the 2001 dot-com downturn. Moreover, the critical situation of the financial system has driven some analysts to argue that should the monetary policy response fails to restore confidence among investors, the outcome would be the worst crisis seen since the Great Depression. This pessimism is not only among specialists. Indeed, in late March 2008 the Consumer Confidence Index in the United States recorded its lowest level since February 1992. A recession in the United States will undoubtedly have an important impact on the world economy, despite the continuous rapid growth experienced by emerging economies, particularly China and India. The purpose of this article is threefold: first, to characterize the current situation in the United States economy; second, to discuss the economic policy responses; and finally, to elaborate on how Caribbean economies may be affected.

Reforma agrária no governo Lula: uma análise do II Plano Nacional de Reforma Agrária

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)