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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.
Center for Global Development
WASHINGTON (July 2, 2019) -- The Latin American Committee on Macroeconomic and Financial Issues (CLAAF by its Spanish acronym) met in Washington today to discuss ‘Mexico’s financial risks: Solving Pemex for a Solvent Mexico.’ The CLAAF explored some of the major macroeconomic issues facing President Andrés Manuel López Obrador (AMLO), the new leader of Mexico, such as declining per-capita income growth, fiscal and monetary issues, and the country’s finance and trade integration with the US and larger international system, and made a series of related reform recommendations in a policy statement.
The CLAAF is a group of prominent economists and academics who have served as government ministers, central bank governors, and/or senior officials at multilateral institutions like the Inter-American Development Bank, International Monetary Fund and the World Bank. Twice a year, the group convenes to analyze major national or regional macroeconomic issues and then release a series of policy recommendations to change course and advance greater economic and financial stabilization.
Cognizant of and analyzing some of the major domestic and international pressures on the AMLO administration (such as NAFTA legacy and the manufacturing sector, the new USMCA, US Federal Reserve activity, rule of law and corruption issues, and more) the CLAAF centers in on Pemex, the state-owned oil company, “by far the single most important fiscal problem faced by the AMLO administration. Lack of investments in exploration and extraction have led to a steady reduction in oil production, while the company has issued a large stock of debt in international markets. Investors have become increasingly weary of holding Pemex bonds,” the group states.
To avoid a sovereign rating downgrade or an additional deterioration of Pemex, either of which could severely curtail capital inflows to Mexico, and improve the country’s economic outlook, the CLAAF believes that:
the paramount task for the government is to address the critical situation at Pemex:
a corporate restructuring of Pemex is required, and should be complemented by a number of additional actions, including attracting new private funding for investments in exploration and extraction;
a comprehensive corporate restructuring plan can also help avert Pemex’s debt crisis. Currently, Pemex is on a collision course that may lead to a debt restructuring; and
while rationalization of current expenditures is needed, the success of the government’s plan of using primary surpluses to finance public expenditure projects requires well-developed and substantive feasibility studies.
“The first priority for the Mexican government should be the prompt resolution of Pemex’s deep financial problems,” said Liliana Rojas-Suarez, president of the CLAAF and director of the Latin American Initiative at the Center for Global Development. “If this issue is not addressed in time, a downgrade of Mexico´s sovereign debt is likely. This, combined with the current external challenges arising mainly from US policies, could further curtail Mexico’s economic growth prospects and performance.”
CLAAF members participating in the June-July 2019 session:
Laura Alfaro, Warren Albert Professor, Harvard Business School, Former Minister of National Planning and Economic Policy, Costa Rica
Augusto De La Torre, Former Chief Economist for Latin America and the Caribbean, The World Bank. Former Governor, Central Bank of Ecuador.
Guillermo Calvo, Professor, University of Columbia; former Chief Economist, Inter-American Development Bank
Roque Fernandez, Economics Professor, UCEMA University; former Minister of Finance, Argentina
Pablo Guidotti, Professor of the Government School, University of Torcuato di Tella; former Vice minister of Economy, Argentina
Paulo Leme, Executive in Residence Professor of Finance, Miami Business School, University of Miami.
Enrique Mendoza, Presidential Professor of Economics, University of Pennsylvania. Director, Penn Institute for Economic Research.
Guillermo Perry, Non-Resident Fellow, Center for Global Development. Former Chief Economist of the Latin America and Caribbean Region, World Bank
Carmen Reinhart, Minos A. Zombanakis Professor of the International Financial System at the Harvard Kennedy School.
Liliana Rojas-Suarez, president, CLAAF; Senior Fellow and Director of the Latin American Initiative, Center for Global Development; former Chief Economist for Latin America, Deutsche Bank
Full Statement Here
Video of Findings and Discussion Here
Over the last 25 years, Mexico has benefited from robust trade and financial integration with North America and strong domestic macroeconomic and financial stability, although much remains to be done on the socioeconomic front.
Against this backdrop, the economy is currently facing strong domestic and external headwinds. At home, the economy has slowed since last year, with real GDP contracting 0.2% in 1Q2019, reflecting low productivity in Mexico and softer growth in the United States. President Andrés Manuel López Obrador (AMLO) has announced protectionist policies, which are not supportive of private investment. From the external side, the lingering uncertainties about Trump’s tariffs on Mexico's imports could have a major negative impact.
How should Mexico deal with these challenges? The Latin American Committee on Macroeconomic and Financial Issues (CLAAF) will discuss central questions on a) the best policy responses to market uncertainties, b) the best way to deal with the immigration flood, which is playing a key role in Trump's new tariff threats, c) what Mexico’s policymakers can learn from the recent experiences in Argentina and Brazil, and d) the most pressing reforms needed to restore investors’ confidence and Mexico's economic growth.
A light breakfast and coffee will be available at 9:30 a.m.
What's going to happen in the world of development in 2018? Will we finally understand how to deal equitably with refugees and migrants? Or how technological progress can work for developing countries? Or what the impact of year two of the Trump Administration will be? Today’s podcast, our final episode of 2017, raises these questions and many more as a multitude of CGD scholars share their insights and hopes for the year ahead.
As recently as 2011, only 42 percent of adult Kenyans had a financial account of any kind; by 2014, according to the Global Findex, database that number had risen to 75 percent. In sub-Saharan Africa, the share of adults with financial accounts rose by nearly half over the same period. Many other developing countries have also recorded gains in access to basic financial services. Much of this progress is being facilitated by the digital revolution of recent decades, which has led to the emergence of new financial services and new delivery channels.
A rise in protectionism and increased external uncertainty may compound already existing domestic weaknesses. Latin America cannot run the risk of being unprepared for the significant potential direct and indirect effects of such a menace to its exports, capital inflows and growth.
This paper constructs an index of regulatory quality for improving financial inclusion for the purpose of assessing and comparing the quality of rules and regulations in a sample of eight Latin American countries.
This paper addresses four misconceptions (or ‘myths’) that have likely played a role in the limited utilization of the IMF’s two precautionary credit lines, the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). These myths are 1) too stringent qualification criteria that limit country eligibility; 2) insufficient IMF resources; 3) high costs of precautionary borrowing; and 4) the economic stigma associated with IMF assistance. We show, in fact, that the pool of eligible member states is likely to be seven to eight times larger than the number of current users; that with the 2016 quota reform IMF resources are more than adequate to support a larger precautionary portfolio; that the two IMF credit lines are among the least costly and most advantageous instruments for liquidity support countries have; and that there is no evidence of negative market developments for countries now participating in the precautionary lines.
In spite of recent progress in the usage of alternative financial services by adult populations, Latin America’s financial inclusion gaps have not reduced, relatively to comparable countries, and, in some cases, have even increased during the period 2011-2014. Institutional weaknesses play the most salient role through direct and indirect effects. Lack of enforcement of the rule of law directly reduces depositors’ incentives to entrust their funds to formal financial institutions. Indirectly, low institutional quality reinforces the adverse effects of insufficient bank competition on financial inclusion.
This paper investigates the shifts in Latin American banks’ funding patterns in the post-global financial crisis period. To this end, we introduce a new measure of exposure of local banking systems to international debt markets that we term: International Debt Issuances by Locally Supervised Institutions. In contrast to well-known BIS measures, our new metric includes all entities that fall under the supervisory purview of the local authority.
A number of Andean countries stand out in their successful use of macroprudential financial regulations. This paper focuses on three: countercyclical capital requirements, countercyclical loan-loss provisioning requirements, and liquidity requirements.