Latin American, Caribbean economies rebound

By Dialogo
September 15, 2010

The deep recession that mires the United States only rippled through Latin America and the Caribbean in 2009, according to economist Manuel Lasaga in a Miami Herald report.

“The region weathered the worldwide economic crisis largely without the inflationary spirals, debt defaults, bank collapses, capital flight and currency devaluations of the past,” said Lasaga, and added that for the most part, the wave wasn’t strong enough to knock anyone down.

In the same report, Augusto de la Torre, Chief Economist for Latin America and the Caribbean for the World Bank, said that institutional and policy reforms have helped create an “economic immune system” for the region.

After consolidating economic gains that were started in mid-2009, Latin America and the Caribbean are, in fact, experiencing a year of growth as their economies are expected to grow some 5.2 percent, according to the Economic Commission for Latin America and the Caribbean (CEPAL).

When the organization released its 2009-2010 Economic Study, Executive Director of CEPAL Alicia Bárcena announced that regional growth had been higher than expected.

The report by Lasaga explained that Latin America thwarted the effect by adopting economic policies that make sense, including cutting deficits, reforming central banks, building up international reserves needed for international purchases and managing to keep inflation relatively low.

The gains though, are not the general rule and has obvious winners (Brazil, Peru, Uruguay and Panama, for example), as well as losers (Haiti and Venezuela).

Still, said the Miami Herald report, the recession is expected to throw some 12 million more people from the entire region into poverty and cost about 1 million more their jobs.

De la Torre added that even if there’s another downturn, the region will still fare better than on days in which any economic imbalance in the U.S. meant a derailment of economies in Latin America and the Caribbean.

“It’s almost like the United States and Latin America switched places,” said Lasaga. “This time Latin America is the region with the good economic indicators.”