latin america and the caribbean - · pdf filethe financial professionals forum 2012 latin...

The Financial Professionals Forum 2012

Latin America and the Caribbean: economic panorama and international linkages

Inés Bustillo Director, Washington Office

United Nations Economic Commission for Latin America and the

Caribbean Miami 2012


1. Economic panorama

2


Learning from the past

More prudent in macroeconomic terms

Progressive in social terms

With economic growth in 2010 but decelerating in 2011 and 2012

Rethinking a new development agenda: closing social and productive gaps

Where is Latin America and the Caribbean today?

3


Regional growth is slackening but remains above global economic growth

LATIN AMERICA AND THE CARIBBEAN: GDP GROWTH, 2011 AND 2012 a

(Percentages) 2011 2012

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. a Several figures for 2011 are estimates and the figures for 2012 are projections. b Projection by the Government of Cuba.

4

The Financial Professionals Forum 2012 Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.

90

100

110

120

130

140

150

2005 2006 2007 2008 2009 2010 2011Latin America MERCOSURExporters of mineral products Exporters of hidrocarbonsCentral America Mexico

This performance reflects improved terms of trade for commodity exporting countries

LATIN AMERICA: TERMS OF TRADE, 2005-2011 (Index: 2005=100)

5


Commodity prices have fallen slightly but remain historically high

TRENDS IN INTERNATIONAL COMMODITY PRICES, JANUARY 2000–DECEMBER 2011

(Indices)

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.

6


The price factor was important in the performance of regional exports, which grew by 23.5% in 2011, slightly above import growth

LATIN AMERICA: ANNUAL GROWTH RATES OF GOODS IMPORTS AND EXPORTS, BY VOLUME AND PRICE, 2011a

(Percentages)

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. a Estimates.

7


Public debt remained relatively low, except in the Caribbean

LATIN AMERICA AND THE CARIBBEAN: PUBLIC DEBT, 2000-2010 (Percentages of GDP)


8


International monetary reserves are historically high

LATIN AMERICA AND THE CARIBBEAN: INTERNATIONAL RESERVES, 2001-JANUARY 2012

(Millions of dollars)


9


Inflation edged up mainly in response to rising external prices

LATIN AMERICA: CONTRIBUTIONS TO INFLATION, JANUARY 2008 – FEBRUARY 2012

(12-month inflation rate, simple average)


10


Capital inflows have resulted in currency appreciation, although there was a moderate depreciation in the second half of 2011

LATIN AMERICA AND THE CARIBBEAN: REAL EFFECTIVE EXTRAREGIONALEXCHANGE RATES, JANUARY 2008–JANUARY 2012

(Average for 1990-2009 = 100)


11


Main gaps to be closed

Inequality For the first time in recent history there have been

advances in combating inequality

Investment Investment, at 23% of GDP, is insufficient

for development

Productivity Closing the external

gap (with the technological

frontier) and the internal gap

(between sectors and actors)

International linkages

Risk of “reprimarization” of

the export structure, with low value added and little investment in

technology

Taxation Regressive

tax systems; weak non-

contributory pillar

12


Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of household surveys conducted in the respective countries.. a Estimates for 18 countries in the region plus Haiti. The figures at the top of the bars represent the percentage and total number of poor people (indigent plus non-indigent poor). The figures cited for 2011 are projections.

Recent achievements that must be preserved: poverty alleviation…

LATIN AMERICA: POVERTY AND INDIGENCE, 1980-2011a (Percentages and millions of people)

13


Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of special tabulations of data from household surveys conducted in the respective countries. a The survey year differs from one country to the next. The date 1990 refers to the most recent survey available between 1989 and 1992; the date 2002 refers to the most recent survey available between 2000 and 2002 and the date 2009 refers to the most recent survey available between 2006 and 2009. b Greater Buenos Aires. c Urban areas. d For the Plurinational State of Bolivia the data are those published by the Economic Policy Analysis Unit (UDAPE). The figure for 1990 relates to 1996. e For El Salvador , the 1990 figure relates to 1995.

… and the narrowing of the income distribution gap

LATIN AMERICA: GINI COEFFICIENT

14


2. International linkages: highlights

15


Enhance the quality of engagement in international trade and partnerships

Reassess international and regional partnership strategies – Capitalize on opportunities for South-South trade and investment – Forge closer ties between the region and Asia-Pacific

Production diversification for a successful international engagement strategy in trade and partnerships – Added value and knowledge in exports – Diversification of products and markets – Clusters, supported by value chains – Natural resource governance – Internationalization (Trans-Latins) as the innovation link – Infraestructure for trade facilitation

16


Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information from the United Nations Commodity Trade Statistics Database (COMTRADE). a Relates to subcategories 42 and 53 of the Classification by Broad Economic Category. b Includes the 10 members of ASEAN plus China, Japan and the Republic of Korea.

Grouping Percentage

Latin America and the Caribbean 8.1

ASEAN+3 b 27.9

North American Free Trade Agreement (NAFTA)

17.4

European Union 14.7

A. Regional total, 2000-2009 (Millions of dollars and percentages of intraregional total)

B. Selected groupings, 2009 (Percentages of intraregional total)

The region’s participation in value chains, even at the intraregional level, is very limited

LATIN AMERICA AND THE CARIBBEAN: INTRAREGIONAL EXPORTS OF PARTS AND COMPONENTS a

17


China has gained a much larger share of the region’s trade in the past decade

Exports Imports

LATIN AMERICA AND THE CARIBBEAN: SHARE OF SELECTED PARTNERS IN EXTERNAL TRADE, 1990-2010

(Percentages)

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of COMTRADE, CEPALSTAT and DOTS.

18


The largest trading partners for Latin America and the Caribbean are the region itself and the United States

Region / country United States

European Union Asia Latin America and

the Caribbean Latin America and the Caribbean 40.1 14.0 16.5 19.3

MER

CO

SUR

Argentina 7.7 17.6 17.5 40.8 Brazil 12.9 22.7 24.1 22.4 Paraguay 2.6 7.2 17.1 61.1 Uruguay 5.7 15.9 10.7 45.4

Ande

an

Com

mun

ity

Bolivia (Plur. State of) 9.1 8.4 17.1 61.0 Colombia 36.0 13.5 7.9 25.4 Ecuador 35.3 11.9 8.4 40.2 Peru 25.3 22.0 37.8 33.9

CAC

M

Costa Rica 33.1 13.6 15.8 27.1 El Salvador 44.3 5.4 5.0 42.9 Guatemala 39.2 6.0 6,1 40.0 Honduras 39.4 15.8 6.2 35.0 Nicaragua 26.6 11.0 8.6 43.5 Chile 12.8 19.4 39.3 21.6 México 72.7 7.0 10.3 6.1

Venezuela (Rep. Bol. de) 47.4 10.1 11.9 18.6

>30 >10<30

LATIN AMERICA AND THE CARIBBEAN: DISTRIBUTION OF TRADE BY MAIN PARTNER AND REGION, 2007-2010 (Percentages of total external trade)


19


Latin America and the Caribbean posted record high FDI inflows in 2011, accounting for 10% of global FDI

20


In 2011, US$ 153 billion in FDI flowed into Latin America and the Caribbean

LATIN AMERICA AND THE CARIBBEAN: TOTAL INFLOWS OF FOREIGN DIRECT INVESTMENT AND INFLOWS BY SUBREGION, 1991-2011

(Billions of dollars)


21


Inward FDI flows in Latin America and the Caribbean, 2011 and 2010

LATIN AMERICA AND THE CARIBBEAN: LARGEST RECIPIENTS OF FOREIGN DIRECT INVESTMENT, BY COUNTRY, 2010-2011



22


Trans-Latins continue to expand

23


Investments abroad by trans-Latins

LATIN AMERICA AND THE CARIBBEAN: OUTWARD FOREIGN DIRECT INVESTMENT, 1992-2011



24


Positive signs...

In 2011 inward FDI in Latin America and the Caribbean hit a new high

The region’s share in global FDI flows continues to increase

FDI has gone up as a proportion of GDP for the second consecutive year, from 2.0% in 2009 to 2.8% in 2011

The rise in the reinvestment of earnings reflects the significant business opportunities in the region Trans-Latin companies continue to expand

25


...and challenges for the future

FDI in high-tech sectors is scarce and concentrated in a few countries

Policies to take advantage of the potential benefits of FDI must be promoted

26


Latin America and the Caribbean: economic panorama and international linkages

Inés Bustillo Director, Washington Office

United Nations Economic Commission for Latin America and

the Caribbean Miami 2012

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