Latin America's search for sustainable reform
| Author | Public Affairs Division |
| Position | IMF External Relations Department |
| Pages | 129-135 |
Page 129
Macroeconomic stabilization and structural reforms in Latin America have had some notable successes, but disappointments have also bred discouragement in parts of the region. What is the best way forward?
A group of 17 professors from the region traveled to Washington for a seminar at the IMF. Senior IMF officials suggested that part of the remedy is rapid and ambitious reform and an end to periodic crises.
The IMF also needs to find ways to be better heard in Latin America.
Page 135
For many countries in Latin America, the search continues for sustainable reform agendas that can deliver poverty reduction. In some countries, disillusionment with the results of recent efforts has prompted policy reversals and renewed debate over the policies needed to achieve not only sustained growth but also substantial improvements in the living standards of the poor. On April 27, a group of 17 professors of economics from 10 Latin American countries- Bolivia, Brazil, Chile, Ecuador, Honduras, Mexico, Paraguay, Peru, Uruguay, and Venezuela-participated in a one-day seminar with IMF officials in Washington to explore the region's economic challenges.
Structural measures are typically essential in bringing the benefits of growth to the poor. And "there are plenty of reforms still to be done in Latin America," IMF Managing Director Rodrigo de Rato said in remarks to the academics.
He highlighted policy actions in the financial sector as one way that countries could develop a stronger private sector. But most participants agreed that reforms are rarely simple.
In Latin America, as several participants noted, a lack of political consensus and policy continuity is limiting the effectiveness of these steps. In some cases, time is also a constraint.
"Policymakers are now given shorter and shorter periods.
Results won't be there in six months," de Rato cautioned.
IMF First Deputy Managing Director Anne Krueger noted that reforms are essential to realize growth potential and raise long-term growth rates. She cited the views of Roger Douglas, the architect of major changes in New Zealand in the 1980s.
He argued that the aim should be to do as much as possible, as rapidly as possible.
The academics broadly agreed with these views but expressed doubt that structural measures alone...
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