(27 July 2011) ECLAC is concerned about the situation in the United States and discussions there about the Government's borrowing limits, and hopes the issue will soon be resolved in the most appropriate manner, given the importance of the United States economy for the world in general and for Latin America and the Caribbean in particular.
The United States is the region's main economic partner, and is even more important for Mexico, Central America and the Caribbean. A very high percentage of investment and financial flows come from the United States. In addition, most of the remittances that alleviate the situation of many of the region's poor households come from Latin American and Caribbean people working in the United States economy.
According to ECLAC, Latin America and the Caribbean as a whole has become the second main holder of assets in dollars (after China). The region has over 700 billion dollars in international reserves.
The delay in approving a new ceiling for public debt in the United States is threatening the international financial system, and this could have a dramatic impact on the value of assets, exchange rates, levels of global activity and, as a result, on demand for goods and services produced and exported by this region.
Although Latin America and the Caribbean has shown itself to be better prepared than in the past to tackle a worsening international situation, any failure to resolve the United States public debt problem would seriously endanger the region's resilience and growth.
The Executive Secretary of ECLAC, Alicia Bárcena, is urging institutions in the United States to find the best way for the world economy to continue the difficult process of recovering from the crisis that began in 2007, such that the region may continue to grow, while also closing any social and productive gaps.
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