The Preliminary Overview of the Economies of the Caribbean analyzes in its 2016-2017 edition the economic performance of the region throughout 2016, the international context and macroeconomic policies implemented by countries, while also providing an outlook for 2017. The Caribbean recorded economic growth of only 0.8 per cent in 2016 but growth is expected to rebound to 2.4 per cent in 2017. The poor performance observed in 2016 was primarily due to a 3.7 percent contraction in the goods producing economies, which were hard hit by the decline in commodity prices in general and hydrocarbons i…
This paper reviews the current status of the international fight against money laundering and the financing of terrorism, highlighting the importance of its prevention for economic and financial stability in Latin America and the Caribbean. It synthesizes the recent history of international legislation and agreements with respect to the issues, and presents the framework of public and private sector actors engaged in combating these threats. It reviews Latin American and Caribbean countries’ compliance with the Financial Action Task Force (FATF) (40 + 9) Recommendations, and analyzes the regio…
National savings and growth in Latin America have remained low in the 1990s and 2000s. The low level of national savings rates has forced Latin American countries to depend on foreign savings to finance investment and growth, which compounds the challenges for raising investment and growth prospects. This study extends the research on savings in three different dimensions: (1) in a time perspective, it extend the analysis on savings to the most recent years: we examine the period 1990-2003: (2) it examines the causality between savings, investment, and growth mostly uncovered in previous resea…
Financial integration among countries entails a series of well-known benefits. On the one hand, net inflows of external savings can complement national savings within an economy and therefore raise productive investment and income. On the other hand, capital mobility provides opportunities for portfolio diversification and risk sharing between countries and this may enable investors-both firms and households of particular countries- to achieve higher risk-adjusted rates of return. This in turn could encourage increases in savings and investment and therefore deliver faster rates of growth (Eic…
In the midst of broad global market turmoil and mounting fears of a recession in the U.S., emerging markets have shown strong growth and economic resilience. For the first time in recent history, the external meltdown has not sparked capital flight from Latin America. Quite the contrary, Latin American markets have been seen by investors as a safe haven from the supbprime woes afflicting the U.S. economyDespite showing significant resilience, Latin American debt spreads widened in the first quarter of 2008, and after reaching record lows in May 2007, they are now re-approaching pre-Asian crisi…
Concerns about the ongoing U.S crisis in the housing sector and the asset exposures to subprime mortgages dominated financial markets in the second and third quarters of 2007. Volatility spiked in July and August, with losses in the subprime mortgage sector spreading to other risky assets. The volatility radiating from the United States is changing the global backdrop for emerging markets. This change comes after several years when the combination of improvement in country macroeconomic policies and strong risk appetites led to strong flows of new money to the emerging markets asset classes. …
Introducción Internationally, development banks emerged as governments of many countries attempted to accelerate economic development by directing finance to achieve this objective.Accordingly, it was felt that development banks had a major role to play in steering resources appropriately, particularly where there is market failure. Thus, development banks were deemed as a critical ingredient to improving access to credit, allowing for the provisioning of long-term finance at a low price, and the financing of start-up activities. In addition, development banks were seen as essential to the fi…
Asset prices in emerging markets rallied to record highs in the first quarter of 2006, with bonds and equities posting strong performances on top of already remarkable 2005 gains. Spreads on dollar-denominated bonds issued by Latin American borrowers tightened by 68 basis points in the first quarter of the year, according to the Latin component of J.P. Morgan's EMBI+ index, while the Morgan Stanley Capital International (MSCI) for Latin America, an indicator of stocks' performance, increased by 15%. Emerging and Latin American markets continued to be supported by active debt managem…
Emerging market bond spreads tightened to record low levels in 2005, as a result of the search for yield in face of ample global liquidity and improving fundamentals in emerging market countries. According to J.P. Morgan, most of the EMBI Global's 8.96% total return in 2005 was derived from spread tightening, which totaled 110 basis points in 2005. The EMBI+ spreads tightened 111 basis points and its Latin component tightened 137 basis points in 2005. Emerging and Latin American markets were also supported by active debt management, as countries took advantage of the favorable external en…
The aim of this paper is to provide an overview of the gender and social disparities existing in the
agricultural and rural sector in Caribbean economies. In this context, agricultural transformation as
occasioned by the dismantling of preferential trading arrangements is analysed to identify the most
relevant gender discriminatory measures in the current agricultural development policy and
programmes. The analysis seeks to provide the basis for enhancing understanding among policy
makers, planners and rural development practitioners of the gender and social dimension involved
in the formulati…
In the fourth quarter of 2003, net capital flows to emerging markets accelerated sharply to reach a 3-year high of US$187 billion, a 50% increase from the US$124 billion reached in 2002. This increase is the result of the combination of abundant global liquidity, strong economic growth, and the improving credit quality of borrowers in both mature and emerging markets. Emerging markets were favored by moderate volatility, low risk-free interest rates and rising commodity prices. In addition, a weak US dollar, solid cash flows and search for yield supported the rally to Latin American countries.…
This paper examines the progress in the implementation of the CSME and what this has meant for the core (trade, investment, etc.); and functional aspects (foreign policy coordination, education, health and social development, etc.,); of integration. A tentative assessment is also made of the relevance of the current mode of integration in light of the opportunities and constraints of the international environment. The paper is divided into three sections. Section one provides a critical assessment of the implementation of the protocols and other aspects of the CSME. Section two evaluates the …
In the first half of 2003, emerging debt markets rallied, as disillusionment with equities, geopolitical concerns, and doubts about growth prospects led investors to shift from equities in favor of fixed incomes securities. As equity prices in the United States struggled early in the year, and the price of U.S. Treasuries rose to a 40-year high, attention was drawn to emerging market assets. Emerging debt markets were driven by liquidity, rising risk tolerance, a search for yield and a wider investor acceptance of the asset class. As a consequence, credit spreads on emerging market bonds narr…
With the first signals of a global economic recovery, prospects for private capital flows to emerging markets improved in the first quarter of 2002. Despite the concerns over corporate accounting practices in the U.S. and the deepening of the economic and financial crisis in Argentina, emerging equity and bond markets have outperformed those in industrialized countries. Emerging market equities and bonds in the first quarter of the year continued to show the strong performance that started in the fourth quarter of last year. The overall JP Morgan Chase EMBI+ excluding Argentina rose about 20%…
The emerging markets debt class entered 2003 in sound shape. Similar to 2002, emerging markets debt finished the first quarter of 2003 as the top performer over all other fixed income asset classes, as well as equity markets. The downside risks for the global recovery, uncertainty about the length of the war with Iraq, and the deteriorating economic outlook in the US and Europe actually contributed to highlight the benefits of diversification into emerging markets. The flow of funds into emerging debt markets was a major factor pushing spreads down during the quarter. These inflows were drive…
Abstract The paper deals with changes in the regulation and supervision of the Latin American financial sector in the aftermath of the Tequila Crisis of 1994-1995. While it finds that both have improved, regulation and supervision cannot resolve all problems; good macroeconomic policy and performance are essential complements. This is especially true because of the procyclical nature of financial activity. The paper presents both regional data for Latin America, contrasting it with other emerging markets, and four country case studies (Argentina, Brazil, Chile, and Mexico). The latter show how…
Abstract New technological options that permit the use of digital systems to create and disseminate information around the world are paving the way for new means of organizing society and economic production and are gradually giving rise to a meta-paradigm that has come to be referred to as the Information Society. Viewed from the perspective of developing countries, the question of how to employ this emerging paradigm to achieve broader development goals and to integrate them more fully into the global Information Society is an issue of the utmost importance on the development agenda…
Abstract Based on the analysis of the Argentinean currency board and the full dollarization scheme in Ecuador this paper argues that an intermediate exchange rate regime (compared to free floating or hard peg) will be a better option for countries subject to external financial shocks and a worldwide export and import structure. It shows that the Argentine convertibility system was successful as an anti-inflationary program. However, the reduction in the inflation rate has been accompanied by a dramatic change in relative prices of tradable and non tradable goods and services, which ha…
Abstract The internationalisation of the euro is in its initial stages and it is still difficult to draw any definitive conclusions regarding its scope and its implications for Latin America. Indeed, the emergence of an internationally used currency is slow and subject to inertial forces. Nonetheless, several fairly robust conclusions can be inferred from the results of the document. The most plausible medium- to long-term international scenario seems to be development of an asymmetrical duopoly between the euro and the dollar. In a context of scant international monetary cooperation, th…
Summary
Capital flows returned to the Latin American in the 1990s after nearly a decade-long of the so-called debt crisis that featured a negative transfer of resources. These new capital flows were closely related to the economic reform process in the region. On the one hand, the reforms were a source of attraction for foreign investors. On the other hand, they helped the reforms succeed by relieving the external constraint that depressed growth during the 1980s.
Nevertheless, the new inflows also created problems. While average inflows in the 1990s were very similar to the amounts received b…