Latin America and the Caribbean:
economic panorama and international linkages
Inés Bustillo
Director, Washington Office
United Nations
Economic Commission for Latin America and the
Caribbean
Miami 2012
The Financial Professionals Forum 2012
1. Economic panorama
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The Financial Professionals Forum 2012
Where is Latin America and the Caribbean today?
 Learning from the past
 More prudent in macroeconomic terms
 Progressive in social terms
 With economic growth in 2010 but decelerating in 2011 and 2012
 Rethinking a new development agenda: closing social and
productive gaps
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Regional growth is slackening but remains above
global economic growth
LATIN AMERICA AND THE CARIBBEAN: GDP GROWTH, 2011 AND 2012 a
(Percentages)
2011
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Several figures for 2011 are estimates and the figures for 2012 are projections.
b Projection by the Government of Cuba.
2012
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This performance reflects improved terms of trade
for commodity exporting countries
LATIN AMERICA: TERMS OF TRADE, 2005-2011
(Index: 2005=100)
150
140
130
120
110
100
90
2005
2006
2007
Latin America
Exporters of mineral products
Central America
2008
2009
2010
MERCOSUR
Exporters of hidrocarbons
Mexico
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
2011
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Commodity prices have fallen slightly
but remain historically high
TRENDS IN INTERNATIONAL COMMODITY PRICES,
JANUARY 2000–DECEMBER 2011
(Indices)
6
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
The price factor was important in the performance of
regional exports, which grew by 23.5% in 2011,
slightly above import growth
LATIN AMERICA: ANNUAL GROWTH RATES OF GOODS IMPORTS AND EXPORTS,
BY VOLUME AND PRICE, 2011a
(Percentages)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Estimates.
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Public debt remained relatively low,
except in the Caribbean
LATIN AMERICA AND THE CARIBBEAN: PUBLIC DEBT, 2000-2010
(Percentages of GDP)
8
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
International monetary reserves
are historically high
LATIN AMERICA AND THE CARIBBEAN: INTERNATIONAL RESERVES,
2001-JANUARY 2012
(Millions of dollars)
9
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
Inflation edged up mainly in response
to rising external prices
LATIN AMERICA: CONTRIBUTIONS TO INFLATION,
JANUARY 2008 – FEBRUARY 2012
(12-month inflation rate, simple average)
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Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
Capital inflows have resulted in currency
appreciation, although there was a moderate
depreciation in the second half of 2011
LATIN AMERICA AND THE CARIBBEAN: REAL EFFECTIVE
EXTRAREGIONALEXCHANGE RATES, JANUARY 2008–JANUARY 2012
(Average for 1990-2009 = 100)
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Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
Main gaps to be closed
Inequality
For the first time
in recent history
there have been
advances in
combating
inequality
Investment
Investment, at
23% of GDP,
is insufficient
for
development
Productivity
Taxation
Closing the external
gap (with the
technological
frontier) and the
internal gap
(between sectors
and actors)
Regressive
tax systems;
weak noncontributory
pillar
International
linkages
Risk of
“reprimarization” of
the export
structure, with low
value added and
little investment in
technology
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Recent achievements that must be preserved:
poverty alleviation…
LATIN AMERICA: POVERTY AND INDIGENCE, 1980-2011a
(Percentages and millions of people)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of household surveys
conducted in the respective countries..
a Estimates for 18 countries in the region plus Haiti. The figures at the top of the bars represent the percentage and total number of poor people
(indigent plus non-indigent poor). The figures cited for 2011 are projections.
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… and the narrowing of the income distribution gap
LATIN AMERICA: GINI COEFFICIENT
Source: Economic Commission for Latin America and the Caribbean (ECLAC) on the basis of special tabulations of data from household surveys conducted
in the respective countries.
a The survey year differs from one country to the next. The date 1990 refers to the most recent survey available between 1989 and 1992; the date 2002 refers
to the most recent survey available between 2000 and 2002 and the date 2009 refers to the most recent survey available between 2006 and 2009.
b Greater Buenos Aires.
c Urban areas.
d For the Plurinational State of Bolivia the data are those published by the Economic Policy Analysis Unit (UDAPE). The figure for 1990 relates to 1996.
e For El Salvador , the 1990 figure relates to 1995.
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2. International linkages: highlights
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Enhance the quality of engagement in international
trade and partnerships
 Reassess international and regional partnership strategies
– Capitalize on opportunities for South-South trade and investment
– Forge closer ties between the region and Asia-Pacific
 Production diversification for a successful international engagement
strategy in trade and partnerships
– Added value and knowledge in exports
– Diversification of products and markets
– Clusters, supported by value chains
– Natural resource governance
– Internationalization (Trans-Latins) as the innovation link
– Infraestructure for trade facilitation
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The region’s participation in value chains, even at
the intraregional level, is very limited
LATIN AMERICA AND THE CARIBBEAN: INTRAREGIONAL EXPORTS OF
PARTS AND COMPONENTS a
A. Regional total, 2000-2009
(Millions of dollars and percentages of intraregional total)
B. Selected groupings, 2009
(Percentages of intraregional total)
Grouping
Percentage
Latin America and the
Caribbean
8.1
ASEAN+3 b
27.9
North American Free
Trade Agreement
(NAFTA)
17.4
European Union
14.7
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information from the United Nations
Commodity Trade Statistics Database (COMTRADE).
a Relates to subcategories 42 and 53 of the Classification by Broad Economic Category.
b Includes the 10 members of ASEAN plus China, Japan and the Republic of Korea.
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China has gained a much larger share of the
region’s trade in the past decade
LATIN AMERICA AND THE CARIBBEAN: SHARE OF SELECTED PARTNERS
IN EXTERNAL TRADE, 1990-2010
(Percentages)
Exports
Imports
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of COMTRADE,
CEPALSTAT and DOTS.
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The largest trading partners for Latin America and the
Caribbean are the region itself and the United States
LATIN AMERICA AND THE CARIBBEAN: DISTRIBUTION OF TRADE BY MAIN
PARTNER AND REGION, 2007-2010
(Percentages of total external trade)
CACM
Andean
MERCOSUR
Community
Region / country
Latin America and the Caribbean
Argentina
Brazil
Paraguay
Uruguay
Bolivia (Plur. State of)
Colombia
Ecuador
Peru
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Chile
México
Venezuela (Rep. Bol. de)
United
States
European
Union
Asia
Latin America and
the Caribbean
40.1
7.7
12.9
2.6
5.7
9.1
36.0
35.3
25.3
33.1
44.3
39.2
39.4
26.6
12.8
72.7
47.4
14.0
17.6
22.7
7.2
15.9
8.4
13.5
11.9
22.0
13.6
5.4
6.0
15.8
11.0
19.4
7.0
10.1
16.5
17.5
24.1
17.1
10.7
17.1
7.9
8.4
37.8
15.8
5.0
6,1
6.2
8.6
39.3
10.3
11.9
19.3
40.8
22.4
61.1
45.4
61.0
25.4
40.2
33.9
27.1
42.9
40.0
35.0
43.5
21.6
6.1
18.6
>30
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
>10<30
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Latin America and the Caribbean posted record high FDI
inflows in 2011, accounting for 10% of global FDI
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In 2011, US$ 153 billion in FDI flowed into
Latin America and the Caribbean
LATIN AMERICA AND THE CARIBBEAN: TOTAL INFLOWS OF FOREIGN DIRECT
INVESTMENT AND INFLOWS BY SUBREGION, 1991-2011
(Billions of dollars)
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Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
Inward FDI flows in Latin America and the
Caribbean, 2011 and 2010
LATIN AMERICA AND THE CARIBBEAN: LARGEST RECIPIENTS OF FOREIGN
DIRECT INVESTMENT, BY COUNTRY, 2010-2011
(Billions of dollars)
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Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
Trans-Latins continue to expand
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Investments abroad by trans-Latins
LATIN AMERICA AND THE CARIBBEAN:
OUTWARD FOREIGN DIRECT INVESTMENT, 1992-2011
(Billions of dollars)
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Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
The Financial Professionals Forum 2012
Positive signs...
 In 2011 inward FDI in Latin America and the Caribbean hit a new high
 The region’s share in global FDI flows continues to increase
 FDI has gone up as a proportion of GDP for the second consecutive year,
from 2.0% in 2009 to 2.8% in 2011
 The rise in the reinvestment of earnings reflects the significant business
opportunities in the region Trans-Latin companies continue to expand
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...and challenges for the future
 FDI in high-tech sectors is scarce and concentrated in a few countries
 Policies to take advantage of the potential benefits of FDI must be
promoted
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The Financial Professionals Forum 2012
Latin America and the Caribbean:
economic panorama and international linkages
Inés Bustillo
Director, Washington Office
United Nations
Economic Commission for Latin America and
the Caribbean
Miami 2012
The Financial Professionals Forum 2012