With rigorous economic research and practical policy solutions, we focus on the issues and institutions that are critical to global development. Explore our core themes and topics to learn more about our work.
In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
She is also the chair of the Latin American Committee on Macroeconomic and Financial Issues (CLAAF) and Adjunct Professor at the School of International and Public Affairs at Columbia University, New York. From March 1998 to October 2000, she served as managing director and chief economist for Latin America at Deutsche Bank. Before joining Deutsche Bank, Rojas-Suarez was the principal advisor in the Office of Chief Economist at the Inter-American Development Bank. Between 1984 and 1994 she held various positions at the International Monetary Fund, most recently as deputy chief of the Capital Markets and Financial Studies Division of the Research Department. She has been a visiting fellow at the Institute for International Economics, a visiting advisor at the Bank for International Settlements and at the Central Bank of Spain. She has also served as a professor at Anahuac University in Mexico and advisor for PEMEX, Mexico’s National Petroleum Company. Rojas-Suarez has also testified before a Joint Committee of the U.S. Senate on the issue of dollarization in Latin America.
She has published widely in the areas of macroeconomic policy, international economics and financial markets in a large number of academic and other journals including Journal of International Economics, Journal of International Money and Finance, Journal of Development Economics, Journal of Contemporary Economic Policy, International Monetary Fund Staff Papers. She has also published or being cited in prestigious newspapers such as the Financial Times, the Wall Street Journal and the Washington Post. She is also regularly interviewed by CNN en Español.
Michael P. Dooley & Donald J. Mathieson & Liliana Rojas-Suarez, 1997. "Capital Mobility and Exchange Market Intervention in Developing Countries" NBER Working Papers 6247, National Bureau of Economic Research, Inc.
Rojas-Suarez, L & Weisbrod, S-R, 1997. "Financial Markets and the Behavior of Private Savings in Latin America" Working Papers 340, Inter-American Development Bank, Research Department.
McNelis, P.D. & Rojas-Suarez, L., 1996. "Exchange rate depreciation, Dollarization and Uncertainty: A Comparison of Bolivia and Peru" Working Papers 325, Inter-American Development Bank, Research Department.
Rojas-Suarez, L. & Weisbrod, S.R., 1996. "Banking crises in Latin America: Experience and Issues" Working Papers 321, Inter-American Development Bank, Research Department.
Rojas-Suarez, L. & Weisbrod, S.R., 1996. "Building Stability in Latin American Financial Markets" Working Papers 320, Inter-American Development Bank, Research Department.
Rojas-Suarez, L. & Weisbrod, S.R., 1996. "Managing Banking Crises in Latin America: The Di's and Don'ts of Successful Bank Restructuring Programs" Working Papers 319, Inter-American Development Bank, Research Department.
Rojas-Suarez, L. & Weisbrod, S., 1994. "Achieving Stability in Latin American Financial Markets in the Presence of Volatile Capital Flows" Working Papers 304, Inter-American Development Bank, Research Department.
A group of influential Latin American economists is urging the IMF, World Bank, and other multilateral institutions to launch a new fund with about $250 billion to help the region cope with the global financial crisis in 2009.
The group, the Latin America Shadow Financial Regulatory Committee, said that companies and governments in the region were having trouble rolling over their debts due to the sudden freezing up of international capital markets. The group released a statement (PDF, 17KB) following a two-day meeting at the Center for Global Development (CGD) last week.
Without measures to ease the sudden lack of credit, the group said, the region could face a "significant drop in economic activity, loss of jobs, rising poverty, bankruptcies in the private sector, problems in the banking sector and, perhaps, payment difficulties in some sovereigns of the region."
Listen to the press conference (in Spanish)
Liliana Rojas Suarez, the committee chair and a CGD senior fellow, said that the seriousness of the international situation calls for the commitment of an unprecedented amount of resources.
"Business as usual is not enough," she said. "Our estimates suggest that about $250 billion may be required to address the potential rollover needs and budget support for Latin American governments in 2009."
Because such sums would exceed the capabilities of the international financial institutions, the group urged that a new funding mechanism be established to "recycle" funds that are currently fleeing to U.S. Treasury bonds. The proposed fund would purchase Latin American loans and bonds, thus pumping liquidity back into the region.
"The role of multilateral institutions should be enhanced through additional resources and new facilities. One possibility is to resort to capital replenishments and such actions should be pursued," the group said. "However, in order to avoid protracted negotiations and for the sake of expediency, the Committee recommends establishing a specific Emerging Markets Fund (EMF)."
EMF resources would be channeled to the region via multilateral institutions including the World Bank, IMF, Inter-American Development Bank, the Inter-American Investment Corporation, and the Corporación Andina de Fomento.
The proposed fund would channel resources to both firms and national governments, through new facilities described in the statement.
"This problem is not of the region's making but we are now suffering the effects," said Rojas-Suarez. "By helping Latin America to avoid a prolonged recession, the United States and other rich countries can aid their own recovery," she added.
The Latin American Shadow Financial Regulatory Committee, also known as the Comité Latinoamericano de Asuntos Financieros or CLAAF, comprises former top economic officials from the region, including finance ministers and heads of central banks.
The new statement (PDF, 17KB) is the nineteenth that the group has issued since it began meeting in 2000. Most of the statements have offered advice to Latin American economic policy makers.
In addition to Rojas-Suarez, the following CLAAF members participated in the meeting:
Guillermo Calvo , Former Chief Economist, Inter-American Development Bank
Alberto Carrasquilla, Former Minister of Finance, Colombia
Pedro Carvalho de Mello, Former Commissioner of Comissão de Valores Mobiliários, Brazil
Roque Fernandez, Former Minister of Finance, Argentina
Pablo Guidotti, Former Vice-Minister of Finance, Argentina
Ernesto Talvi, Former Chief Economist, Central Bank of Uruguay
CGD policy experts are urging the International Monetary Fund to push for the inclusion of emerging market and developing countries in the re-write of bank supervision guidelines and other international financial rules that they say is likely to happen soon as a result of the global financial crisis.
“The IMF no longer has the financial heft to act as a lender of last resort,” said CGD president Nancy Birdsall. “But the IMF does have a key role to play in managing today’s crisis. Its leadership can help to restore confidence in the global financial system by insisting that China, Brazil, and other emerging market economies have a voice in rewriting international financial rules,” she said.
Birdsall said she welcomed World Bank president Robert Zoellick’s announcement Monday that he is creating a high-level commission to look into modernizing the governance of the World Bank Group, a step that a CGD working group on the future of the World Bank urged in 2005. She also voiced support for his call to replace the G7 with a new 14-member “Steering Group” that would include Brazil, China, India, Mexico, Russia, Saudi Arabia, and South Africa in addition to the current G7 members.
“Bob Zoellick seems to have taken advantage of the opportunity presented by the unsettled global economic situation and a lame duck U.S. president to open the way for overdue reform of the World Bank to give developing countries greater voice,” she said. “He’s right: more fully engaging rising Asia and other emerging markets at the bank will strengthen the bank’s role in solving urgent global problems. I hope that the leadership of the IMF will follow suit and find ways to ensure that China, India and other key countries are at the table during the re-write of global financial rules.”
Zoellick’s announcement came as the financial crisis that began with the sub-prime mortgage meltdown in the United States spread to Europe and rattled markets in Asia. CGD experts have warned that the crisis will have profound implications for developing countries.
The crisis will be topic number one when finance ministers from around the world convene in Washington this week for the annual meetings of the two Bretton Woods institutions, so-called because they were conceived at a conference in Bretton Woods, New Hampshire, in the waning days of World War II as collective means of avoiding a repeat of the Great Depression. A growing number of economists warn that the unfolding crisis could lead to the worst recession since the 1930s, yet analysts agree that neither institution has the means to avert a severe global downturn with harsh consequences for the world’s poor.
“Developing countries will be badly hurt by this crisis, yet they have had almost no role in shaping the global financial rules that fostered it,” said CGD senior fellow Liliana Rojas-Suarez, a financial economist who has held senior research positions on Wall Street and at the Inter-American Development Bank and the IMF.
Rojas-Suarez said that the IMF should push for developing countries to become active participants in the Financial Stability Forum, (FSF) which coordinates international standards and codes to strengthen financial systems. Membership is limited to a handful of high-income countries and to international financial institutions, including the IMF and the World Bank.
Another important body dominated by the high-income countries is the Basel Committee on Banking Supervision (BCBS), which issues recommendations on banks' capital adequacy requirements, most recently through the Basel II Accord. While the BCBS conducts consultations that include developing countries, rich countries make the decisions. Developing countries have long argued that these bodies fail to address their needs and concerns.
Rojas-Suarez said that she hoped that during the meetings this week IMF Managing Director Dominique Strauss-Kahn would “seize this opportunity to take leadership in the design of a system of global financial regulation that is strong yet flexible enough to meet the needs of countries with very different circumstances.”
Nora Lustig, a CGD board member and development economist who has written extensively on the poverty impacts of financial crises, and who has held senior positions in UNDP, the World Bank and the Inter-American Development Bank, said that both the IMF and the World Bank need to prepare to help developing countries cope with the effects of lower growth on their fiscal and balance of payments accounts, while the World Bank will need to focus on helping countries buffer the negative impact of the crisis on poor people.
“This may entail helping countries in designing and implementing safety net programs or expanding them where they already exist,” she said. “In the poorest countries, it may mean providing financial support to the safety net programs in the form of grants or low cost loans.”
If the global downturn proves to be deep and long lasting, the IMF and the World Bank “may have to go back to their 20th Century role of providing credit to countries that have no access to the international private capital markets,” Lustig said. “While this may not happen to middle-income countries as it did in the 1980s, the countries that are most vulnerable and least attractive to foreign investment will find it hard to access global capital markets.”
By Lawrence MacDonald, CGD director of communications and policy
CGD senior fellow Liliana Rojas-Suarez argues that the recent sharp spike in food and oil prices, above the long term upward trend, threatens Latin America’s stability and is the result of excess global liquidity and the U.S. credit mess. She says the region must fight inflation now and, going forward, insist on a greater say in setting global financial rules.