What's next for Latin America?
Author | Laura Wallace |
Position | Editor-in-Chief |
After the "lost decade" of the 1980s and the financial crises of the mid-and late-1990s and early years of this decade, Latin America is enjoying some much-needed breathing space. Growth has been strong during 2004-05, the destructive hyperinflation that once seemed characteristic of the region is an increasingly distant memory, and the economies of the region have been showing encouraging resilience to shocks. But what's next? Poverty in the region is still extremely high, the gap between rich and poor is the widest in the world, and progress on social indicators has been painfully slow. In fact, Latin America may be the only region, along with sub-Saharan Africa, not to reach the Millennium Development Goal of halving the 1990 level of income poverty by 2015. This social picture not surprisingly feeds into the political arena, which will be unusually active in the year or so ahead with elections across the region-including in the two largest countries economically, Brazil and Mexico. Thus, voters will have a chance to shape the region's economic agenda for years to come.
For the September issue of F&D, we invited aid experts, donors, and recipients to explore the questions that are front and center in development circles. What can be done to ensure that higher aid promotes growth and reduces poverty? How can policymakers in recipient countries improve the delivery of government services and infrastructure investments, along with managing spending decisions, when a large proportion of financing (aid) will be outside their control? How can donors ensure that their aid flows are less volatile and more predictable? And how can recipient countries prevent aid from causing currency appreciations or domestic inflation that would undercut their international competitiveness? The general consensus seems to be that scaling up aid flows will be just the start of a complex set of decisions and tough choices, requiring a truly global partnership-of recipients and donors and international financial institutions. Not surprisingly, some observers are more optimistic than others as to whether this will occur and...
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