Latin America and the Caribbean in the World Economy 2014: Regional integration and value chains in a challenging external environment

The 2014 edition of Latin America and the Caribbean in the World Economy: Regional integration and value chains amid challenging external conditions has four chapters. Chapter I examines the main features of the international context and their repercussions for world and regional trade. Chapter II looks at Latin American and Caribbean participation in global value chains and confirms that the region, with the exception of Mexico and Central America, has only limited linkages with the three major regional value chains of Asia, Europe and North America. This chapter also looks at how participation in value chains may contribute to more inclusive structural change, by analysing three core microeconomic aspects. Chapter III identifies various spheres in which regional integration and cooperation can help strengthen production integration between the economies of Latin America and the Caribbean. The fourth chapter explores the intra- and extraregional trade relations of the countries of the Caribbean Community (CARICOM) and considers how to strengthen production integration in the subregion by taking advantage of linkages beyond trade and building on commercial and production complementarities among the members. The chapter also reviews the differences between the countries in terms of income, population and production and export structure, in a context of marked macroeconomic vulnerability.

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 software and information technology services industry: An opportunity for the economic autonomy of women in Latin America

The objective of this report is to understand the rationality that underpins public and business policies for promoting the IT and SIS industries and to determine whether they incorporate gender equality and/or provide incentives for women’s participation. The report also explores how this group of women is symbolically constructed within the firms, what issues are emphasized by the women themselves and what solutions or resources they propose for overcoming the problems. It then contrasts this discourse and intervention with the experiences, visions and demands of women leaders in the SIS sector. For this purpose, the policies, programmes and best practices of Europe are analysed and compared with instruments currently in place in Latin America and the Caribbean, in terms of their specific characteristics and degree of progress. Special attention is given to the cases of Argentina, Costa Rica and Colombia.

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

Includes bibliography.

Latin America-European Union cooperation: A partnership for development

The European Union has taken special interest in promoting development cooperation as an instrument along with framework and association agreements. Today, the countries making up the strategic partnership between the European Union and the current Community of Latin American and Caribbean States (CELAC) are in a far different position from the one envisaged in the early 1990s. Nearly 15 years on from the launch of the strategic partnership between the European Union and the current Community of Latin American and Caribberan States (CELAC, formerly the Rio Group), it is important to look at the future prospects for cooperation. During this change, the strategic partnership between the European Union and CELAC will continue, so European Union cooperation must also change to meet this challenge.

The employment situation in Latin America and the Caribbean: Crisis and the labour market

Since the financial and economic crisis began to affect the real economy and spread throughout the world, the region’s economies have been faced with a situation where data on employment and labour reflect the real stories of millions of women and men for whom the future has become uncertain. When these problems began to appear, the International Labour Organization (ILO) warned that the world faced a global employment crisis whose consequences could lead to a social recession. As the Economic Commission for Latin America and the Caribbean (ECLAC) has pointed out, the outbreak of the crisis put an end to a five-year period of sustained growth and falling unemployment. As early as the second half of 2008, the figures began to reflect slowing economic growth, while a downward slide began in the labour market. This initial bulletin, produced jointly by ECLAC and ILO, seeks to review the ways in which the crisis is affecting the region’s labour markets. Amidst a situation characterized by shocks and uncertainty, governments and social partners must have the inputs needed for designing public policies to increase the population’s levels of employment and well-being. It is planned to produce two further bulletins by January 2010, in order to measure the impact of the crisis on employment and provide an input to the process of defining the best public policies to reverse its consequences. The bulletin reviews the most recent available indicators and analyses them in order to establish trends and detect variations. It provides statistics for the first quarter, estimates for the rest of 2009, and a review of policies announced by the Governments. In 2008, the last year of the growth cycle, the region’s urban unemployment stood at 7.5%. According to economic growth forecasts for 2009, the average annual urban unemployment rate for the region will increase to between 8.7% and 9.1%; in other words, between 2.8 million and 3.9 million additional people will swell the ranks of the unemployed. Data for the first quarter of 2009 already confirm that the crisis is hitting employment in the region. Compared with the first quarter of 2008, the urban unemployment rate was up by 0.6 percentage points, representing over a million people.Work will continue until September 2009 on the preparation of a new report on the employment situation, using data updated to the first half of 2009. This will provide a picture of the region’s employment situation, so that growth and employment projections can be adjusted for 2009 as a whole. Strategies for dealing with the crisis must have jobs and income protection as their central goals. Policies are moving in that direction in Latin America and the Caribbean and, if they are effective, an even greater worsening of the situation may be avoided. Labour produces wealth, generates consumption, keeps economies functioning and is a key factor in seeking out the way to more sustainable and equitable growth once the crisis is past.

Capital Flows to Latin America and the Caribbean: 2014 Overview

Divergence in macro trends and in monetary policy in advanced economies was a dominant driver of rates and currencies in emerging markets in 2014. Diverging macroeconomic developments were reflected in different monetary policy actions in 2014, with the European Central Bank (ECB) and the Bank of Japan (BOJ) moving in the opposite direction of the U.S. Federal Reserve. The unwinding of the U.S. monetary stimulus, while the ECB and the BOJ step up their monetary stimulus, has underpinned an appreciation by the U.S. dollar, in which most commodities are priced. Latin American markets, which started the year under pressure from fears of the U.S. Federal Reserve tapering off its quantitative easing program and concerns over stability, ended 2014 under pressure from a stronger U.S. dollar. However, there are many signs that a slowdown in LAC financial markets – particularly debt markets, which have been breaking records in debt issuance for the past six years – is under way. The region’s growth prospects look somewhat 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.

Measuring the impact of quality infrastructure in Latin America: Experiences, achievements and limitations

This document, which is partly based on by the study Impacto de la Infraestructura de la Calidad en América Latina, is a second joint effort by the Economic Commission for Latin America and the Caribbean (ECLAC) and the German National Metrology Institute (PTB) to move towards a more detailed understanding of the role played by the Quality Infrastructure in opening up possibilities for the countries in the region to innovate and compete. Through methodological analysis and the realization of case studies at the national level in certain countries in the region, the document seeks to offer a more comprehensive picture of the impact of the Quality Infrastructure and its importance for the economic and social development of countries. The document analyzes various QI related aspects, with particular emphasis on a review of conceptual elements, the role of the QI in the innovation systems of countries and a brief analysis of a set of case studies in Latin American countries. It also identifies a series of challenges and limitations for carrying out impact studies. These elements are taken up again in the final conclusions of the book, where a number of policy recommendations are outlined.

The effects of climate change in the coastal areas of Latin America and the Caribbean. Impacts

The regionwide study of the effects of climate change in the coastal areas of Latin America and the Caribbean has been divided into four main parts in line with the comprehensive risk-assessment methodology that was developed as research progressed. The outputs of this regional study are presented in four core documents: an analysis of the factors that are driving climate change, a study on the vulnerability of coastal areas, an evaluation of the impacts of climate change and an exploration of how all these different factors can be brought together in an assessment of the risks associated with some of the impacts of climate change on the region’s coastal areas.

Guaranteeing indigenous people's rights in Latin America. Progress in the past decade and remaining challenges. Summary

As the twenty-first century advances, the countries of Latin America are building deeper democracies and looking critically at the development process, in the growing conviction that development should focus on equality and be approached on the basis of rights. This means tackling the region’s persistent inequalities, especially those affecting indigenous peoples, who have historically suffered exclusion and discrimination. It also means guaranteeing indigenous people both the enjoyment of human rights on an equal footing to the rest of society, and the right to be collectively different. This is a challenge for this century, which began with the recognition of the rights of indigenous people and the role they unquestionably play on national and international agendas.

The economics of climate change in Latin America and the Caribbean: Paradoxes and challenges. Overview for 2014

Foreword by Alicia Bárcena.

Governance of strategic minerals in Latin America: the case of Lithium

The objectives of this report are twofold: The first is to provide an integrated overview of the governance of strategic minerals in the Latin American and Caribbean region, focused on sharing the economic-resource rent. The second objective is to provide a context for the policy proposal of the Chilean National Lithium Commission (NLC. The collected data, and information, on the various fiscal regimes can be used as a reference for further research. The objectives in this report are met by analyzing distinct aspects of strategic mineral governance, in three different parts. The lithium-industry serves as a case study for this report, as an example of a strategic mineral.

Climate change in Central América: Potential impacts and public policy options

Since 2008 we have supported the collaborative initiative "Economics of Climate Change in Central America" aimed at demonstrating the impacts of climate variability and change and fostering a discussion on public policies in key sectors. The initiative has been led by the Ministries of Environment and Treasury or Finance of Central America, with the support of their ministerial councils, CCAD, COSEFIN, and Economic Integration Secretariat, SIECA. The Ministries of Agriculture and of Health, with their councils, CAC and COMISCA, have also joined the effort; and the Dominican Republic came on board in 2015.

The effects of climate change on the coasts of Latin America and the Caribbean: Climate variability, dynamics and trends

This effort to study the effects of climate change in the coastal areas of Latin America and the Caribbean has been divided into four main parts in line with the comprehensive risk-assessment methodology developed. The outputs of this regional study are presented in four core documents: an analysis of coastal dynamics and climate variability, a study on the vulnerability of coastal areas, an evaluation of the impacts of climate change and an exploration of how all these different factors can be brought together in an assessment of the risks of the impacts of climate change on the region’s coastal areas. The overall objective of this study is to compile the specific types of information required in order to analyse the economic impacts of climate change in the coastal areas of Latin America and the Caribbean. The area covered by the study encompasses the coastlines of Latin America and the Caribbean (an area totalling approximately 72,182 km in length).

Valoración y gobernanza de los proyectos geotérmicos en América del Sur: una propuesta metodológica

El presente documento contiene un análisis de la situación del sector geotérmico en América delSur, enfocado en la generación geotermo-eléctrica, con identificación de los principales proyectos y con evaluación de todos los factores que los caracterizan, desde el punto de vista histórico, del recurso, de su accesibilidad, y de las condiciones de entorno institucional, social, ambiental y de mercado.