Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 BBVA Japan Tokyo May 30th 2006 Javier Santiso Chief Economist & Deputy Director OECD Development Centre LATIN AMERICA 2006: Beyond Good Revolutionaries.

Similar presentations


Presentation on theme: "1 BBVA Japan Tokyo May 30th 2006 Javier Santiso Chief Economist & Deputy Director OECD Development Centre LATIN AMERICA 2006: Beyond Good Revolutionaries."— Presentation transcript:

1 1 BBVA Japan Tokyo May 30th 2006 Javier Santiso Chief Economist & Deputy Director OECD Development Centre LATIN AMERICA 2006: Beyond Good Revolutionaries and Free Marketeers

2 2 LATIN AMERICA: IN THE GARDEN OF DELIGHTS?

3 3 Utopia in Latin America: from a spacial search to a temporal search. A search which has impregnated the history of Latin American political economy: from structuralism to monetarism, from Marxism to Liberalism. In the 20th Century the whole Continent was dancing a waltz of paradigms. THE FLOOD OF PARADIGMS IN LATIN AMERICA

4 4 The transformations of the Latin American continent are now obvious. In the region as a whole, the conceptual and practical framework of political economies have been transformed. Democracy and the Market have taken over from Revolution and the State on the altar of references. To sum up, a complete vocabulary and grammar have disappeared from the political and economic repertoire allowing a new ideology to emerge. DEMOCRACY AND THE MARKET: THE NEW ALPHABET

5 5 THE EMERGENCE OF THE POLITICAL ECONOMY OF THE POSSIBLE The strategy used by Ulysses: leaders know that they could be in danger of succumbing to the temptation of the sirens chanting the economic politics of the impossible. They are cautious and they tie themselves to the masts of the fiscal and monetary institutions they have contribute to build. Two strategies of development are being outlined – and sometimes combined-: one is an anchor of endogenous credibility, coming from within, and the other is an anchor of exognous credibility, coming from outside.

6 6 THE POLITICAL ECONOMY OF THE POSSIBLE: THE SILENT TRANSFORMATION Javier Santiso, Latin America's Political Economy of the Possible Beyond Good Revolutionaries and Free-Marketeers, Cambridge, Mass., MIT Press, 2006.

7 7 1 Latin Americas Crusade The Great Latin American Transformation Conclusion

8 8 CEPAL: Latin American Economic Commission THE BIG CHALLENGE: THE LIFE AFTER THE WASHINGTON CONSENSUS Index of Structural Reforms in Latin America CEPAL IDB IDB: Inter American Development Bank Source: Based on ECLAC and IADB

9 9 A DISAPPOINTING PERFORMANCE IN THE REGION… Source: Based on World Bank Not only was growth poor but it was also very volatile. Source: Based on World Bank

10 10 …THE CONSEQUENCE HAS BEEN A DIVERGENCE IN THE EVOLUTION OF INCOME PER CAPITA With the exception of the 70s when Latin America attained an average growth rate of 6%... … during succeeding decades the income per capita gap between the developped regions widened

11 11 HOWEVER AN UPWARD TURN BEGAN WITH A NEW CYCLE IN Latin American Cycles The last cycle in the region was very long (11 years), especially compared to previous ones which lasted 8 years. Source : BBVA 8 años 11 años Average Length Expansions:5,3 years Decelerations:4 years

12 12 CHINA AND ASIA CONTRIBUTE ALSO TO GROWTH IN LATIN AMERICA Source: Based on domestic sources, before the revised figures released in Jnauary Growth of GDP in China (Annual percentage variation) Exports to China in 2004 (Percentage of total)

13 13 Venezuela 83.1% Peru 70.7% Chile 59.1% Colombia 46.3% Argentina 38.0% Brazil 29.6% Mexico 14.6% Latam31.2% Source: Based BBVA over total exports (2004) Exports of commodities Source: Based on BBVA BBVA-MAP Index of Latin America commodity prices (100 =jan03) TOTAL Without oil COMMODITY BOOM HAS BEEN A BONANZA

14 14 1 Latin Americas Crusade The Great Latin American Transformation Conclusion

15 15 THE GREAT TRANSFORMATION: THE MONETARY MAST Latin AmericaTotal Emerging Markets Inflation (%) Source: Based on IMF

16 16 *Central Government By Country (2005) -4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% *% +0.3% -4%-2%0%2%4%6% Brasil Colombia Peru* México Venezuela* Argentina* Chile* LAC-7: FISCAL BALANCE (SPNF, in % of GDP) THE GREAT TRANSFORMATION: THE FISCAL ANCHOR

17 17 THE GREAT TRANSFORMATION: THE EXTERNAL ANCHOR 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% (e) Trade openness in Latin America Source: Based on BBVA 0%10%20%30%40%50%60%70% Mexico Chile Venezuela Uruguay Argentina Colombia Peru Brazil Trade openness in 2005 Source: OECD Development Centre

18 18 The political economy of the possible: Chile

19 19 Evolution of the Pension System in Latin America (in % of GDP) 0% 5% 10% 15% 20% 25% 30% Num. periods ARGENTINABOLIVIACOLOMBIA COSTA RICACHILEEL SALVADOR MEXICOPERUURUGUAY Return of Democracy GRADUALISM AND CONTINUISM: PENSIONS REFORMS

20 20 GRADUALISM AND CONTINUISM: PENSIONS REFORMS

21 21 CHILE: A MAJOR PERFORMER IN LATIN AMERICA IN TERMS OF POLICY STABILITY Source: IADB Politics of Policies Report, 2006 Average

22 22 The political economy of the possible: Mexico

23 23 EXTERNAL ANCHOR: THE EMERGENCE OF A GLOBAL TRADER Mexican exports increased on average by 17% each year between 1989 and Total Exports /121984/121988/121992/121996/122000/122004/12 Degree of Openness ((X+M)/PIB) ChinaChileMexTurColArgPerúBraInd... Which has resulted in a greater degree of openness Source: INEGI and Banxico

24 24 THE COUNTRY NOW DEPENDS A LOT LESS ON RAW MATERIALES The export of manufactured goods grew on average between 1990 and 2000, about 28% per year and now accounts for 90% of total exports. Exports /121984/121988/121992/121996/122000/122004/12 Non Oil Oil 0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1,0

25 25 The political economy of the possible: Brazil

26 26 EXTERNAL TRANSFORMATION Following the 1999 devaluation which give way to the floating of the real, the economy has gradually opened up, making it less vulnerable to external shocks. Source: Based on BCB figures 0% 5% 10% 15% 20% 25% 30% Trade Opennes (Exports + Imports) / GDP

27 27 Number of firms in Forbes IndiaSpainChinaBrazilMexicoChile Source: Forbes 2000 BRAZILIAN FIRMS RALLIED MEXICAN MULTILATINAS The 50 more profitable firms BrazilMexicoChileArgentinaColombiaEcuadorPanamaPeruVenezuela Source: America Economia 2005

28 28 1 Latin Americas Crusade The Great Latin American Transformation Conclusion

29 29 VENEZUELA ECUADOR PERÚ PARAGUAY ARGENTINA URUGUAY MÉXICO BRAZIL COLOMBIA CHILE EL SALVADOR NICARAGUA HONDURAS COSTA RICA GUATEMALA PANAMÁ REPÚBLICA DOMINICANA BOLIVIA Next presidential elections Latin America 2006: The political cycle is back

30 30 The timing game: Political cycles and crises in Latin America used to be synchronized, Nominal exchange rate depreciation and government change 0,94 0,96 0,98 1 1,02 1,04 1,06 1,08 1,1 1,12 1,14 1, Source: Frieden, Ghezzi y Stein, 2001 Country`s Total Elections 1Colombia Costa Rica Guatemala Ecuador Chile Peru Honduras Paraguay Brazil El Salvador Republica Dom Uruguay Mexico Argentina Nicaragua Panama Venezuela Bolivia

31 31 During the period , some countries achieved a decoupling: The case of Mexico Source: Jorge Blázquez and Javier Santiso, Timing of Presidential Elections and Exchange Rate Depreciations in Mexico, Election Year

32 32 While others had overcome the test of fire more recently: The case of Brazil Source: Based on Juan Martínez and Javier Santiso, 2003.

33 33 Emerging Democracies in Latin America: Trends and issues Average Source: Javier Santiso, Latin Americas Political Economy of the Possible: Beyond Good Revolutionaries and Free Marketeers. MIT Press. Cambridge, Massachusetts, 2006 Based on the Inter-American Development Bank

34 34 The quality of policy making: A pending issue for Latin American Source: IADB Politics of Policies Report, 2006 and World Economic Forum, 2005 Key features of Public Policies: Inter-regional comparison

35 35 BBVA Japan Tokyo May 30th 2006 Javier Santiso Chief Economist & Deputy Director OECD Development Centre LATIN AMERICA 2006: Beyond Good Revolutionaries and Free Marketeers


Download ppt "1 BBVA Japan Tokyo May 30th 2006 Javier Santiso Chief Economist & Deputy Director OECD Development Centre LATIN AMERICA 2006: Beyond Good Revolutionaries."

Similar presentations


Ads by Google