The historical problem Brazil has been unable to solve is the need to build an inclusive economic model that can help alleviate poverty and reduce inequality. That will require cutting subsidies and benefits to interest groups that have long benefitted from fiscal spending. As the year comes to an end, Brazilians will be happy to forget a bad year in terms of politics and the economy. Unfortunately for them, 2017 might not be much better.
Access to the U.S. market and proximity have led to the development of an array of regional value chains in Central American economies. But with the right policies more can be done. Here are some examples.
Contrary to those who say we don’t make things anymore and that all our jobs are being shipped offshore, the truth is that manufacturing is the largest industry by far for foreign investors, with chemicals being the leading sector.
A quantitative analysis of China’s commercial and diplomatic relations with Latin America indicates that Beijing may be engaged in a more consistent strategy to check U.S. influence than many thought.
Climbing out of the commodities trap and building inclusive economies will require establishing a substantive, coordinated regional policy on integration, investment, immigration, and policy reform.
In both political and military battles there are casualties. During this election season, one of the most notable casualties is free trade.
This election has become the season of beating up on free trade. While the insecurity and anger that the argument has tapped into is real, reversing free trade will only strengthen the elite. It’s up to the people to bring it back and make it work for everyone.
The recent agreement of the Trans-Pacific Partnership is about far more than trade. It’s about creating a new international regime in the Pacific that will reinforce trade rules, smooth inter-state relations and promote international harmony with China.
In the final stages of the Trans-Pacific Partnership negotiations, the U.S. is still pushing for the elimination of safeguards to regulate capital inflows and capital flight. Those controls have mitigated past crises and prevent others in economies that for decades have been buffeted by financial instability.
The TransPacific Partnership that is currently being negotiated will be neither an apocalypse nor a panacea. But what it will do is provide critical legal and institutional guarantees that will draw Asian investors to Latin America.