CGD's weekly Global Prosperity Wonkcast, event videos, whiteboard talks, slides, and more.
In this CNN interview, Senior Fellow Liliana Rojas-Suarez argues that the recently announced measures in Cyprus that imposes losses on non-insured depositors as part of a full-fledged bank restruct
On January 21st, Senior Fellow Liliana Rojas-Suarez was interviewed by CNN in Santiago, Chile about the recent growth recovery in China and its effect on Latin America. Although Liliana recognized that growth prospects in the region have improved for 2013 in light of China's recent events.
In this CNN interview, Senior Fellow Liliana Rojas-Suarez explains that while the region’s economic growth prospects remain strong for 2013, there are some factors that will limit its growth potential. First, external financing needs in the region, as measured by the current account of the balance of payments are widening. This, together with the presence of fiscal deficits in most countries (with the notable exception of Chile and Peru) reduce the region’s resilience to a potential external shocks (such as an exacerbation of the Eurozone crisis). Second, institutional weaknesses and political constraints will hurt some countries in the region, notably Argentina and Venezuela. However, Liliana expects that political constraints to undertake much needed infrastructure investments in Brazil will be eased in 2013, partly motivated by the 2014 World Cup.
Large accumulation of international reserves by Latin American countries was central in containing the adverse effects of the global financial crisis. Lines of credit from the Federal Reserve and the new liquidity facility from the IMF also played a key role, at least for some major countries. However, reserve accumulation is not free of cost, Fed support is not guaranteed and IMF resources might not be sufficient at times of systemic crises and may carry conditionality that make such assistance only contingent. This raises the question as to whether Latin America should actively pursue the effective implementation of regional arrangements capable of ensuring the availability of liquidity at times of acute financial stress. The Latin America Shadow Financial Regulatory Committee dealt with this issue by answering these questions, among others, and shared their statement publicly at this CGD event:
In these interviews Senior Fellow Liliana Rojas-Suarez discusses the risks to growth sustainability in Latin American countries derived from the large vulnerabilities in advanced economies. In particular, she emphasizes risks for emerging markets from the lack of solution to the fiscal cliff problem in the U.S. While Liliana is confident about China's capacity to continue on a solid growth path (albeit at slower rates than those observed in previous years), she believes that the permanent solution to the European debt crisis requires either a comprehensive write-down of the Greek debt or a separation of Greece (and possibly Portugal) from the Eurozone.
Latin America's emerging middle class, defined as those unlikely to fall back into poverty, has grown by 50% in recent years and now includes one of every three people on the continent, roughly equal to the number of people who remain poor. A new World Bank study finds many potential benefits from this surging middle class but cautions that these benefits can only be fully realized if countries can strike a new social contract that links middle class interests to the inclusion of those left behind. The event will include presentation of the report's key findings and a panel discussion with some of the leading experts on the region's middle classes.
In this interview with Canal N, the most prestigious Peruvian news channel, Liliana Rojas-Suarez, talks about the consequences for Latin America of an intensification of the financial crisis in Europe. In Liliana’s view, while increasing fragilities have started to show in some countries like Brazil, others like Chile and Peru remain quite strong and would remain highly resilient to a severe external shock.
After the 2010 Haitian earthquake flattened Port-au-Prince, the United States responded with an outpouring of money, food, and medicine for Haiti. But a more effective form of assistance -- the powerful tool of migration and labor mobility -- was at first overlooked in relief and recovery efforts.
CGD senior fellow Michael Clemens led a two-year research and policy engagement effort that reached a milestone in January when the U.S. government added Haiti to the list of more than 50 countries eligible for temporary worker visas, the H-2 visa program. Michael calculated at the time that if just 2,000 Haitians worked as H-2 workers in the United States each year (just 2% of total H-2s) over the course of 10 years they would earn $400 million in additional, new income for Haitian families—an amount equal to the entire U.S. post-earthquake budget for reconstruction in Haiti.
Since the 2010 earthquake, $6 billion has been disbursed in official aid to help the people of Haiti. Nearly all of it has gone to intermediaries such as international non-governmental organizations (NGOs) and private contractors. Yet there has been a surprising lack of reporting on how the money has been spent. CGD senior fellow Vijaya Ramachandran and research assistant Julie Walz try to follow the money in a new CGD policy paper: “Haiti: Where Has All the Money Gone?” They joined me on this week’s Wonkcast to explain their findings.
Conventional wisdom has it that when the United States catches a cold, Latin America gets pneumonia. But when the United States caught financial pneumonia in 2008, Latin America escaped with little more than a cold. What’s changed?
In this week’s Wonkcast, CGD senior fellow Liliana Rojas-Suarez explains why Latin America was mostly successful in coping with the fallout from the 2008 global financial crisis and she introduces a new methodology for predicting how countries will fare in the next global financial crisis. Our conversation draws on her new working paper, Credit at Times of Stress: Latin American Lessons from the Global Financial Crisis, written jointly with Carlos Montoro of the Bank for International Settlements (BIS).
As part of a special edition of CNN program, CNN Dinero, Senior Fellow Liliana Rojas-Suarez formed part of a panel discussing global economic prospects for 2012. She emphasized that events in Europe will determine growth prospects around the globe. Liliana is not optimistic about the resolution of the Eurozone crisis given the lack of a decisive and coordinated efforts to deal with two major problems: (a) mounting difficulties in the banking sector; and (b) the European Central Bank’s reluctance to behave as a lender of last resort. If this trend were to continue in 2012, a number of defaults will materialize and the Eurozone will not survive in its current form. A much needed large increase in IMF resources to contain the European crisis will also continue to face severe impediments in 2012 in view of the ongoing political mess in the US, whose vote is needed for a formal increase in the lender’s resources.
Senior Fellow Liliana Rojas-Suarez was interviewed by CNN en Español on dealing with the current banking problems in Europe. With the escalation of the banking problems, some countries, such as Greece, need a comprehensive restructuring of their banking systems, while many others need a TARP-like program to support re-capitalizations. As the crisis keeps progressing, liquidity support from the European Central Bank (ECB) is proving insufficient. Assistance from the IMF is pivotal to support not only Europe but also the rest of the world should a full-fledged crisis emerge in Europe. The situation is complicated by the fact that the IMF is in need of greater funds and their largest stake holder, the United States, is not in a position to offer support due to their own political challenges.
If you found a trillion-dollar bill on the sidewalk, would you pick it up? Michael Clemens thinks he has found a bunch of such bills—huge gains to the poor people and the world economy that could be achieved by easing restrictions on cross-border labor mobility. He has written a working paper that sets forth a new research agenda on migration and is urging economists to pay more attention to the benefits of increased labor mobility for the people who move, the people and countries that receive them, and those who remain at home. In this week’s Wonkcast we discuss his four-point research agenda, and explore why some important questions about labor mobility are so rarely investigated.
Take the topic of so-called “brain drain.” While plenty of research has gone into documenting the exodus of skilled workers from developing countries, Michael says, little research has examined the actual effects of these departures on those left behind—and even less has considered the welfare gains to those who move. “When people talk about migration at the international level, they tend to only focus on the costs,” says Michael. “This negative labeling happens to such a degree that they eventually define the movement with a pejorative little rhyme, brain drain.”
CGD Senior fellow Liliana Rojas-Suarez discusses what implications might befell Latin American economies if the U.S. does not raise its debt ceiling.
When a catastrophic earthquake struck Haiti last year the U.S. government and public moved quickly to aid the survivors. The response was swift and compassionate. But America did not do something simple and low-cost that could have helped the survivors of this horrible event. It did not crack open the door and admit a small number of them to the United States.
On this week’s Wonkcast, I’m joined by senior fellow Michael Clemens to discuss why US immigration policy should be part of the United States’ official humanitarian response to natural disasters. Michael, who leads CGD’s work on migration and development, recently commissioned a working paper to figure out what if anything can be done to open a channel for limited numbers of disaster refugees to enter the United States.
CNN en Español interviewed CGD senior fellow Liliana Rojas-Suarez on the U.S. financial reform.
Rojas-Suarez expressed concern that the Federal Reserve will only supervise entities that have an asset value of more than $50 billion, but won’t supervise the small entities which usually start banking problems like the recent crisis in the United States. She argued that the only way for the U.S. to achieve financial stabilization is by giving the Federal Reserve the authority to supervise the entire financial system.
CGD senior fellow Liliana Rojas-Suarez, principal author and editor of Growing Pains in Latin America, discusses the book and some ideas for sustainable, equitable growth in Latin America.
The New Ideas in Development After the Financial Crisis Conference, sponsored by CGD and the Bernard L. Schwartz Forum on Constructive Capitalism, examined the implications of the global financial crisis on existing development strategies.
In this audio recording, CGD research fellow Michael Clemens presents his new ideas for migration.