While Latin America shares many features with the rest of the developing world, and even though Latin American countries differ significantly from each other, three features characterize most countries in the region: Latin America is the most financially open (i.e. has the fewest restrictions to the cross-border movement of capital), the most democratic, and the most socially unequal of the world’s developing regions.
These features combine to produce an important development challenge. While Latin America’s generally sound macroeconomic and financial policies supported high growth rates since the mid-2000s and an impressive resilience to the 2008 global financial crisis, many people have not significantly benefitted from this growth. Inadequate social services and, in some countries, high poverty rates remain a problem. Institutional deficiencies, lagging productivity, and escalating transnational violence -- often influenced by US policies -- feed popular discontent that could threaten sustained growth.
Analysis of the Latin American experience offers lessons to both advanced and developing countries, as well as to international standards-setting bodies:
- What can developed countries learn on financial crisis prevention and management from the vast experience of Latin America?
- How can Latin America’s experience be useful to multilateral organizations in designing their recommendations for financial stability?
- What can other developing countries seeking economic growth in the context of greater financial integration learn from Latin America’s strengths and weaknesses?
- How can the experience of today’s high-income countries inform Latin America’s efforts to escape the so-called middle income trap (a trap that Brazil, the largest Latin American economy, has remained in for over two decades)?
- How can the United States better monitor development assistance to Latin America, and Haiti in particular, as it continues with relief and recovery efforts?
- What can the United States do to address key political and economic security challenges facing Mexico and other Latin American nations?
CGD’s substantial in-house expertise on Latin America and the large stock of research it has undertaken on the region places the Center in a strong position to address some of these questions. CGD has published two books on Latin America and a large number of working papers, reports, and policy notes dealing with key issues in the region. CGD also hosts most meetings of the Latin America Shadow Financial Regulatory Committee (CLAAF), which is comprised mostly of former central bank governors and ministers of finance from the region.
CGD senior fellow Liliana Rojas-Suarez serves as director of CGD's Latin America Initiative. She is well known within the region for her expertise in financial regulation, Basel II and III, and the development impact of global financial flows. She is a frequent commentator on CNN Español. Among her many publications on the region is Growing Pains in Latin America.
CGD’s work on Latin America will also benefit from the research of CGD president Nancy Birdsall, an expert on the region and co-author of Fair Growth: Economic Policies for Latin America's Poor and Middle-Income Majority, and senior fellow Amanda Glassman, director of the CGD’s global health program and a leading expert on health economics and financing of knowledge products in Latin America.
Ongoing research led by Michael Clemens on migration and disaster recovery has led to key policy changes -- encouraging the US government to add Haiti to the list of coutries eligible for the H-2 visa program. CGD senior fellow Vijaya Ramachandran leads work monitoring US development assistance to Haiti.
Other experts that will contribute to the success of this initiative include CGD non-resident fellows Guillermo Perry, former minister of finance in Colombia and regional chief economist for Latin America at the World Bank; CGD non-resident fellow Nora Lustig, a professor at Tulane University and expert on social issues in the region; and CGD visiting fellow Alejandro Foxley, president of the Chilean think-tank CIEPLAN and former minister of finance and of foreign affairs of Chile.