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Oil price hits eight-month high

21 February 2012

Newsroom Staff

By Tony Paul

The price of oil has reached its highest level since June last year due to rising tensions over Iran's nuclear program.

Benchmark US light crude rose 1.7% to $105.01 a barrel and brent crude futures rose $1.14 to $120.72 a barrel.

On Sunday, the country's oil ministry said it had halted oil sales to British and French companies.

The cost of fuel has also risen. In the UK the price of diesel has hit a new high, at 143.16 pence a liter.

The country insists its nuclear program is peaceful, but the UN's International Atomic Energy Agency says it has information suggesting Iran has carried out tests relevant to the development of a nuclear explosive device.

The rise in the oil price also pushed UK oil giant BP's shares above 500 pence for the first time since last January.

Analysts say the price of oil has risen as EU countries seek to find new oil suppliers and Iran hunts new buyers for its oil.

The increase in price is a direct result of European importers of Iranian oil looking round to find alternative sources, said Professor Paul Stevens from Chatham House.

Oil prices have also been driven up by an improvement in the performance of the US and Chinese economies.

It's been a combination of a couple of factors, obviously geo-political tensions are rising, especially Iran, said Amrita Sen, an oil analyst at Barclays capital.

But the price support has also come through, because fundamentals have tightened up.

Factors include stronger demand because of Asian growth and the European cold spell. At the same time, supply from South Sudan and Syria to Europe has also been cut.

If there is no further tension in Iran, the oil price may fall back. However, few analysts think this is likely.

That assumes that Iran doesn't do anything else, but that is a doubtful assumption, added Prof Stevens.

If there was a military attack on Iran, then all bets are off.

Eurozone states want Greece out, says Venizelos

16 February 2012

Newsroom Staff

By Tony Paul

Some eurozone countries no longer want Greece in the bloc, Finance Minister Evangelos Venizelos has said.

He accused the states of playing with fire, as Greece scrambled to finalize an austerity plan demanded by the EU and IMF in return for a huge bailout.

Greece needs to convince lenders that it will make enough savings, and that its politicians will enact the changes.

Athens is hoping to get a 130bn-euro (£110bn; $170bn) bailout from the EU and IMF.

The deal also includes a provision to write off a further 100bn euros of debt owed to banks.

Parliament approved a package of austerity measures on Sunday, but eurozone ministers indicated that more detail needed to be given on the cuts.

The ministers also insisted that the major Greek political parties committed to implementing the cuts, regardless of who wins a general election scheduled for April.

Leaders of the two main parties have now signed letters committing them to enacting the changes.

Mr Venizelos said there were very few remaining issues with the austerity package and promised to have them fully clarified before the conference call.

But he also warned that some eurozone countries were playing with fire, saying: There are many in the eurozone who don't want us any more.

Mr Venizelos also said that President Karolos Papoulias had volunteered to give up his salary as an honourable... symbolic gesture. He is reported to earn 280,000 euros a year.

But the austerity plan has been hugely unpopular in Greece.

Anger boiled over during Sunday's vote in parliament, when large groups of protesters clashed with riot police and dozens of buildings were set on fire in Athens.

And eurozone countries appear to be running out of patience with Greece.

Unnamed eurozone officials were quoted as suggesting that Greece's latest assurances still may not be enough, because people no longer trusted the country's politicians.

Greece has failed to deliver on many of the promises it made to secure an earlier bailout deal, EU officials say.

In a press briefing on Wednesday, German Chancellor Angela Merkel's spokesman, Steffen Seibert, denied Germany wanted Greece out of the eurozone.

Amadeu Altafaj, a spokesman for EU economics commissioner Olli Rehn, said eurozone members had stated very clearly that they want Greece to remain a member of the eurozone.

However, a BBC element in Brussels says there is a growing sense among eurozone members that if Greece did leave it would not mean the collapse of the euro.

New York sues banks over electronic mortgage system

09 February 2012

Newsroom Staff

By Lara Holmes

New York State Attorney General Eric Schneiderman on Friday sued three major U.S. banks, accusing them of fraud for using an electronic mortgage database that resulted in deceptive and illegal practices.

Schneiderman filed the lawsuit against Bank of America Corp (BAC.N), Wells Fargo & Co (WFC.N) and JPMorgan Chase & Co (JPM.N) in New York state court in Brooklyn.

FAO Pronouncement: Cooperatives are central to fight against hunger

30 January 2012

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

Cooperatives and producer organizations will be increasingly important in efforts to eliminate hunger and reduce poverty around the world, FAO Director-General José Graziano da Silva told participants—on January 24-- at the 2012 Thematic Social Forum in Porto Alegre, Brazil, during an official meeting with the Economic and Social Development Council (CDES) of Brazil. Graziano da Silva attended the annual gathering of non-governmental organizations and social movements less than one month after taking the helm of the UN agency dedicated to improving food security. The FAO chief noted that the United Nations had declared 2012 the International Year of Cooperatives, reflecting a renewed interest in, and the need for greater awareness of, the multi-faceted value of cooperatives.

Graziano da Silva said that FAO would be stepping up its collaboration with producer organizations and rural, food and agricultural cooperatives that give organizational, economic, and social clout to smallholder farmers, pastoralists and those who rely on fishing and forestry for their livelihoods. "FAO needs strong cooperatives and producer organizations as key partners in the effort to eliminate hunger for some 925 million people, and to respond to the many challenges that face our world today. FAO is committed to seeking out and sharing evidence of the impact of cooperatives and producer organizations on food security at the global level, and to strengthening its ties with such groups," said Graziano da Silva.

Eclac: Rising tax revenues are key to economic development in Latin American countries

28 January 2012

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

Increased domestic resource mobilization is widely accepted as crucial for countries to successfully meet the challenges of development and achieve higher living standards for all their people. Additional tax revenues enable governments to simultaneously improve their competitiveness and promote social cohesion through increased spending on education, infrastructure and innovation, according to a tripartite study released on January 25.

Latin American countries have made great strides over the past two decades in raising tax revenues as is demonstrated in Revenue Statistics in Latin America which is launched today by the CIAT, ECLAC and the OECD. It shows that the average tax to GDP ratio in 12 Latin American and Caribbean countries (LAC) rose almost continuously from 14.9% in 1990 to 19.2% in 2009. This increase reflects strong economic growth, taxation of non-renewable natural resources, and better management of tax administrations.

Mexican President Felipe Calderon urges shift in economic model

28 January 2012

Newsroom Staff

By Eliane Portillo

President Felipe Calderón was awarded the Global Statesman award on Thursday during his presentation at the Global Economic Crisis and Opportunities of the G20, where he stated that the European debt crisis has provoked a re-design of the global economic model.

The president stated that a redesigning of the global economic model would create a new world order and new rules, but such rules would still respect economic liberty, democracy and respect for the environment.

Dr. George Soros: New year, same crisis

27 January 2012

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

Dr. George Soros, Billionaire Chairman of Soros Fund Management and of the Open Society Institute, published an article on January 26 in which he holds that the measures introduced by the European Central Bank last December, especially the Long Term Refinancing Operation (LTRO), have relieved the liquidity problems of European banks, but have not cured the financing disadvantage of the highly indebted member states. Since high-risk premiums on government bonds endanger the capital adequacy of banks, half a solution is not enough. Indeed, that supposed solution leaves half the Eurozone relegated to the status of Third World countries that have become highly indebted in a foreign currency. Instead of the International Monetary Fund, it is Germany that is acting as the taskmaster imposing tough fiscal discipline on them. This will generate both economic and political tensions that could destroy the European Union.

I have proposed a plan that would allow Italy and Spain to refinance their debt by issuing treasury bills at around 1%. I named it in memory of my friend Tomasso Padoa-Schioppa, who, as Italy’s central banker in the 1990’s, helped to stabilize that country’s finances. The plan is rather complicated, but it is legally and technically sound. I describe it in detail in my new book Financial Turmoil in Europe and the United States. European authorities rejected my plan in favor of the LTRO. The difference between the two schemes is that mine would provide instant relief to Italy and Spain. By contrast, the LTRO allows Italian and Spanish banks to engage in a very profitable and practically riskless arbitrage, but has kept government bonds hovering on the edge of a precipice – although the last few days brought some relief.

IMF Publishes on January 24th its latest World Economic Outlook Update: Global recovery stalls, downside risks intensify

26 January 2012

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere. Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated. Global output is projected to expand by 3¼ percent in 2012—a downward revision of about ¾ percentage point relative to the September 2011 World Economic Outlook (WEO). This is largely because the euro area economy is now expected to go into a mild recession in 2012 as a result of the rise in sovereign yields, the effects of bank deleveraging on the real economy, and the impact of additional fiscal consolidation. Growth in emerging and developing economies is also expected to slow because of the worsening external environment and a weakening of internal demand. The most immediate policy challenge is to restore confidence and put an end to the crisis in the euro area by supporting growth, while sustaining adjustment, containing deleveraging, and providing more liquidity and monetary accommodation. In other major advanced economies, the key policy requirements are to address medium-term fiscal imbalances and to repair and reform financial systems, while sustaining the recovery. In emerging and developing economies, near-term policy should focus on responding to moderating domestic growth and to slowing external demand from advanced economies.

Wold Bank: Prepare for the worst

23 January 2012

Newsroom Staff

By Eliane Portillo

The World Bank warned developing countries on to prepare for the real risk that an escalation in the euro area debt crisis could tip the world into a slump on a par with the global downturn in 2008/09.

In a report sharply cutting its world economic growth expectations, the World Bank said Europe was probably already in recession. If the euro area debt crisis deepened, global economic forecasts would be significantly lower.

IMF: Big financial sectors under review in 2012

23 January 2012

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

The Fund states that there’s one thing all countries learned in the recent crisis: problems in the financial system can have devastating consequences for economic health. In the wake of the crisis, the IMF has strengthened its surveillance of countries’ financial systems. Since 1999 the IMF has monitored countries’ financial sectors on a voluntary basis through a joint review process with the World Bank called the Financial Sector Assessment Program.

In September 2010, in response to the global crisis, the IMF’s Executive Board agreed the world’s top 25 financial sectors would undergo a mandatory financial check-up every five years. 2012 will be a busy year as the IMF plans to evaluate 18 countries’ financial health—ranging from France and Spain to Argentina and Armenia— to spot any potential trouble on the horizon. The IMF then produces a detailed report that includes recommendations for the country on how to strengthen its financial stability.

IMF: Statement by managing director Christine Lagarde following executive board discussion on the adequacy of fund resources

18 January 2012

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

Through Press Release No. 12/13 of January 17, 2012 the Fund reported that Managing Director Christine Lagarde of the International Monetary Fund (IMF) today issued the following statement after an Executive Board discussion on the adequacy of Fund resources as part of the ongoing review of Fund resources:

“Today’s discussion on the adequacy of Fund resources was a welcome opportunity to assess whether they are sufficient for the IMF to fulfill its mandate and to play a full and constructive role in securing global stability. Following the request of our membership last year through the International Monetary and Financial Committee and the general support by the G20 leaders at the Cannes summit, today’s discussion was an important step.

Eclac “Tax reforms with a vision of sustainable development are needed in Latin America”

12 January 2012

Newsroom Staff

alt

By Fernando Álvarez: Ex IMF Economist

Tax reforms with a vision of sustainable development are needed in Latin America and the Caribbean. Tax collection and public expenditure structures must be revised so that they are fairer and have the necessary resources to face the challenges of development and climate change," said the Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, on January 9. The high representative and the Federal Minister for Economic Cooperation and Development of Germany (BMZ), Dirk Niebel, took part in a roundtable on "Opportunities and challenges of climate change for the economic and social development of Latin America" held at ECLAC headquarters in Santiago, Chile.

In his speech, Mr. Niebel agreed with the Executive Secretary of ECLAC that there is a need to "create fair tax systems in Latin American countries" and reduce tax evasion. "Latin America needs extra funding for technological innovation," he stated. "As a result of the ECLAC-BMZ cooperation, we have been able to help the region by linking the issue of climate change to production, technological innovation and tax reform," stressed Ms. Bárcena, who called the international community to take concrete steps in this area at the next United Nations Conference on Sustainable Development, known as Rio+20, which will take place in June this year in Brazil. "The challenge over the next years is to make the growth of emerging countries a path which is compatible with the climate," stated Mr. Niebel, reiterating Germany's plan to continue supporting, together with ECLAC, the countries in Latin America and the Caribbean in their own journey towards development.

Mr. Niebel highlighted that a "positive sign" is "the road map" for reaching an agreement on the climate by 2020, which resulted from the XVII Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 17), held in Durban, South Africa. At the end of the roundtable, the representatives signed a document which establishes the framework of shared values and objectives of the strategic alliance ECLAC-BMZ, such as to strengthen the global development agenda, promote learning processes and increase the effectiveness of mutual cooperation.Both organizations have been working together for more than 30 years to form local, national and regional capacities to face the challenges of sustainable development. In 2003, the relationship was defined as a "strategic partnership" and in 2005, ECLAC accepted Germany as a Member State. The book "A model of cooperation for the twenty-first century", given to Mr. Niebel during his visit to the Organization, looks back over the history of this successful partnership, which includes 12 programmes, almost 200 publications and more than 150 events and training workshops all over the region.

At present, ECLAC and BMZ are implementing the programme "Promoting low carbon development and social cohesion in Latin America and the Caribbean", agreed to on 18 November 2011 for aperiod of two years. This programme has two priority areas including "climate change and opportunities for achieving low carbon development" and "promoting a new State-market-society balance for equality and environmental sustainability in Latin America and the Caribbean"."We believe that the only way to make progress in a strategic alliance between Europe and Latin America is if we manage to give economic and social structure to this change of paradigm towards the path of sustainable development," concluded Ms. Bárcena.

ECLAC and UNICEF call to meet goal of universal birth registration by 2015

05 January 2012

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

According to the thirteenth issue of the bulletin Challenges launched in late December 2011 by ECLAC and UNICEF, it is estimated that 10% of children under the age of five in Latin America and the Caribbean are not registered, which infringes their ability to exercise their social, economic, civil and cultural rights.
The article "A rights-based approach to birth registration in Latin America and the Caribbean", which is included in the latest issue of the joint publication, highlights that in total there are 6.5 million children without birth certificates in the region. It indicates that universal registration means registering all children born in a country's territory, regardless of ethnic origin, gender, economic position, geographic origin or migration status, or their parents' nationality. According to the article, one of the main barriers to overcome in order to make progress in this area is the requirements that the parents must meet. For example, the mother might be required to go with the father when registering the child, or the parents might have to submit their own birth certificates or proof that they reside in a certain city or country.

The article included in the bulletin states that non-fulfillment of the right to identity and universal registration does the most harm to children in the poorest, most marginalized population segments in the region, such as indigenous peoples, Afro-descendants, migrants and families living in rural, remote or border areas.

UNODC and OSCE join efforts to tackle crime and drugs

04 January 2012

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

The United Nations Office on Drug and Crime (UNODC) is a global leader in the fight against illicit drugs and international crime. Established in 1997 through a merger between the United Nations Drug Control Programmed and the Centre for International Crime Prevention, UNODC operates in all regions of the world through an extensive network of field offices. UNODC relies on voluntary contributions, mainly from Governments, for 90 per cent of its budget.

With 56 participating States in Europe, Central Asia and North America, OSCE is the world's largest regional security organization. It offers a forum for political negotiations and decision-making in the fields of early warning, conflict prevention, crisis management and post-conflict rehabilitation, and puts the political will of its participating States into practice through its network of field missions.

UNODC Executive Director Yury Fedotov met—at the end of December 2011-- Lamberto Zannier, Secretary-General of the Organization for Security and Cooperation in Europe (OSCE), to discuss a joint action plan that will see the two organizations cooperate in tackling organized crime and illicit drugs. The two organizations intend to undertake substantive, long-term cooperation in combating transnational threats, with particular focus on illicit drugs, illicit firearms, small arms and light weapons and terrorism.

Other areas of cooperation will be the countering of transnational organized crime, corruption and money-laundering and the combating of trafficking in persons, irregular migration and the smuggling of migrants. "We are pleased to join hands with OSCE. In cooperating, UNODC and OSCE draw upon their respective comparative advantages: UNODC through its mandate to provide technical assistance in response to the interrelated issues of organized crime and illicit drugs; and OSCE as a political platform for dialogue with a network of field operations working to promote security in its political, military, economic, environmental and human dimensions," said Mr. Fedotov.

OSCE Secretary-General Lamberto Zannier said: "For several years, UNODC and OSCE have met regularly to review the results of cooperation between the two organizations and to plan for the future. The decisions taken by OSCE foreign ministers at their recent meeting in Vilnius to strengthen and consolidate the Organization's work to address transnational threats and its cooperation with Afghanistan should enable us to reinforce this process. We are prepared to enhance our cooperation with UNODC in addressing the common challenges of terrorism, organized crime, trafficking in human beings and illicit drugs."

Under the joint action plan, the two parties will, among other activities, improve coordination in the field in order to avoid duplication of work; conduct expert-level consultations on common issues; draw on existing successful programmes in the field to develop best practices; undertake joint assessments, such as in the area of opiate trafficking, in priority countries; and cooperate in implementing regional initiatives, such as the recently launched UNODC-led Regional Programme for Afghanistan and Neighbouring Countries.

The two parties will promote the ratification and legislative implementation by OSCE participating States of international counter-terrorism instruments and cooperate in raising awareness of and encouraging the implementation of protocols such as the OSCE Document on Small Arms and Light Weapons and the Protocol against the Illicit Manufacturing of and Trafficking in Firearms, Their Parts and Components and Ammunition, supplementing the United Nations Convention against Transnational Organized Crime, in addition to other United Nations conventions and related protocols.

International Labor Office (ILO): Questions and answers on food security

30 December 2011

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

Recent food price shocks threaten some 1 billion people with hunger. Meanwhile, there is growing evidence that climate change, along with rampant commodity speculation and lack of social protection are contributing to widespread food insecurity, resulting in hunger, poverty and even increased child labor. ILO On-line talked to Marva Corley-Coulibaly and Uma Rani Amara, senior economists at the ILO International Institute for Labour Studies about the growing concerns over food insecurity, and what urgent actions are needed to address the crisis.

World Bank: International experts address debt-restructuring issues

29 December 2011

Newsroom Staff

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By Fernando Álvarez: Ex IMF Economist

With the debt debate in the Euro-zone heating up, many in Latin America are thinking of ways to shield the region from a crisis that, pretty much like the previous recession, it did not help to create.As part of this worldwide brainstorming, a group of top experts has concluded that more needs to be done to strengthen the current international financial architecture so it allows for seamless debt restructuring should the situation arose.

The likes of Nobel Laureate Joseph Stiglitz, London School of Economics professor Richard Portes and other experts attending a one-day seminar in Buenos Aires, looked at the recent experiences in Europe and other parts of the world to examine the gaps in the current global financial setup. Even though Latin America is not immune to shocks from abroad, it is well positioned to weather a crisis, many experts noted. “Latin America’s experiences provide valuable lessons to share with other regions,” said World Bank director for Argentina, Penelope Brook.

“Several countries in the region were able to cope with the crises of the 90’s and this decade by implementing a variety of policies credited with creating a period of growth and stability that has received much praise around the world,” she said. The gathering offered an open and plural platform for a key discussion in the current economic climate, said Brook. "The value of this conference lies in its capacity to spur a fruitful debate, free of pre-conceptions, to push forward an agenda for global cooperation,” she noted.

Life After Debt

Reassuring the audience that "there's life after debt" economics Nobel Laureate Joseph Stiglitz pointed out that “there is a need for an orderly international financial system, a bankruptcy system, as markets will not take the initiative in terms of debt restructuring.” Austerity and adjustment plans by themselves are not the solution, Stiglitz added. The attending experts focused on the huge economic and social costs that protracted negotiations to restructure unsustainable debts can inflict on countries.

Minister of Economy of Argentina, Amado Boudou; Joseph Stiglitz; President of Central Bank, Mercedes Marcó del Pont and Secretary of Finances, Hernán Lorenzino. Some offered a glimpse of what an overhauled system would look like.

Any attempt to improve the existing financial systems should take into account factors such as a debtor’s repayment capacity, managing the risks of unwillingness to pay when there is capacity, and ways to arbitrate this issue rationally, said World Bank Regional Chief Economist Augusto de la Torre. “A more efficient system should prevent liquidity problems from becoming solvency problems due to public action delays and market hypersensitivity,” de la Torre said. Seminar host and Argentina's Finance Minister Hernan Lorenzino, noted the importance of promoting such discussion under the current circumstances. “Our intention is to promote a debate in view of what we believe is an inadequate reform of the international financial system,” Lorenzino said. “We want to move this issue to the top of the international agenda by calling upon anyone capable of providing different and well founded visions.”

Euro-zone Woes

The LSE's Portes noted that “it is now very clear that there is an issue with liquidity, banks have capital deficits and there is a public debt crisis.”The expert blamed the current crisis on imbalances between Germany and countries in the Euro zone periphery, but not on fiscal management -- with the exception of Greece.Portes recommended that the European Central Bank (ECB) support solvent European countries without an International Monetary Fund (IMF) program, while suggesting a debt restructuring program for Greece, Ireland and possibly Portugal.

Lee Buccheit noted that “something completely different is happening now if we compare it to the last three decades”. “In Europe, the public sector has not forced the private sector to restructure its debt; on the contrary, the public sector is taking on all responsibilities, starting with the Greek rescue package that has to cover debt and fiscal deficit commitments. In fact, debt is transferred from private creditors to the IMF and the European Central Bank, but the underlying issue is not solved,” he warned.

Jointly organized by the Economy and Public Finance Ministry of Argentina and the World Bank, the seminar convened figures of international stature, including from Nobel Laureate Joseph Stiglitz, Professor Richard Portes of the London Business School, US expert on international transactions Lee Buccheit, Swedish professor Axel Lejonhuvud from Los Angeles University in California and Augusto de la Torre, WB Chief Economist for Latin America and the Caribbean.

IMF: Executive board completes review of Mexico´s performance under the flexible credit line

26 December 2011

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

Through Press Release No. 11/480 of December 22, 2011 the Fund reported that the Executive Board of the International Monetary Fund (IMF) completed on December 21, 2011, its review of Mexico’s qualification for the arrangement under the Flexible Credit Line (FCL) and reaffirmed Mexico’s continued qualification to access FCL resources. The Mexican authorities have indicated that they intend to continue treating the arrangement as precautionary.

The two year arrangement for Mexico for SDR 47.292 billion (about US$73 billion), approved in January 10, 2011 (see Press Release No. 11/4), was the first under the reforms to the FCL approved in August 30, 2010 (see Press Release No. 10/321). Following the Executive Board discussion of Mexico, Mr. David Lipton, First Deputy Managing Director and Acting Chairman of the Board, made the following statement: “The Flexible Credit Line (FCL) arrangement for Mexico, approved a year ago in a context of heightened risks to the global economic outlook, has played an important role in supporting the authorities’ overall macroeconomic strategy, providing an insurance against global tail risks and bolstering market confidence. Today, the Executive Board reaffirmed that Mexico continues to meet the qualification criteria for access to FCL resources.

ECLAC: Latin America and the Caribbean will grow by 3.7% in 2011 amid global uncertainty and volatility

22 December 2011

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

According to a publication presented on December 21 by the Economic Commission for Latin America and the Caribbean (ECLAC), lower growth of the world economy and greater uncertainty and volatility in international financial markets will have repercussions for Latin America and the Caribbean, a region which will register a slight drop in growth to 3.7% in 2012, having reached 4.3% in 2011.

In the Preliminary Overview of the Economies of Latin America and the Caribbean 2011, the regional organization of the United Nations states that although growth was already slower by the first half of 2011 when compared to 2010, most of the region showed a positive performance thanks to a favorable external situation. However, volatility and uncertainty complicated the global environment during the second half of the year, which caused a greater slowdown of economies compared to 2010, when the region grew by 5.9%.

According to the publication, the projected growth for 2011 means a rise in per capita output by 3.2%, and like in previous years, the results are uneven among the subregions, given that the South American countries grew by 4.6%, the economies of Central America by 4.1% and the Caribbean nations by only 0.7%. The countries with the greatest growth this year will be Panama (10.5%), Argentina (9.0%), Ecuador (8.0%), Peru (7.0%) and Chile (6.3%), while El Salvador will only grow by 1.4%, Cuba by 2.5% and Brazil by 2.9%. In this context, rapid job creation was observed and the regional open unemployment rate dropped from 7.3% to 6.8%.

In addition to the effect of an increasingly complex external situation, the lower economic growth in 2011 is due to measures applied particularly in Brazil to reduce domestic demand and prevent overheating as a result of its substantial growth in 2010. However, many countries grew more in 2011 than in 2010, as a result of a number of factors such as the recovery from natural disasters in the case of Chile and Haiti, the high prices of hydrocarbons, which favored countries such as Venezuela and Ecuador, and the effect of the recovery of the United States of America on exports and remittances from some countries in Central America and the Caribbean. The macroeconomic policy challenges which the countries had to face this year included the rise in regional inflation, which rose from 6.6% in 2010 to almost 7% in 2011, the appreciation of various currencies - in particular during the first half of the year-, the recovery of fiscal space, maintaining growth and particularly, starting from the second half of the year, the threat of a slowdown due to the external context.

According to the document, economic growth in the region is not immune to the prevailing situation of global uncertainty. "There is a great possibility of a deep crisis in the Eurozone, which would significantly affect the global economy overall and would impact our region primarily through the real channel (exports, prices, foreign investment, remittances and tourism) and the financial channel (greater volatility, possible capital outflows and difficulties in accessing credit)," stated Alicia Barcia, Executive Secretary of ECLAC, while presenting the report. ECLAC projects that growth over the next year in Latin America and the Caribbean will be led by Haiti (8.0%), followed by Panama (6.5%), Peru (5.0%), Ecuador (5.0%) and Argentina (4.8%).Furthermore, labour markets will continue to grow, albeit at slower rates than in previous years, which will place unemployment within the range of 6.6% and 6.8%. However, the current account deficit would increase again from 1.4% to 1.8% of GDP.

The publication stresses that future evolution of growth in Latin America and Caribbean will be influenced by the extent and scope of deterioration which is observed in the world economy. The drop in the level of activity in developed countries would result from a fall in the demand for goods which would negatively impact regional exports and the prices of principal export products, which is already being observed. ECLAC stresses that the region has a number of strengths which would enable it to better face the downturn of the world economy, including a high level of reserves, which would enable the region to finance a deficit in the current account, improvements in the public accounts and -except in a number of countries in the Caribbean- low levels of public debt, which would generate spaces for countercyclical fiscal policies, and prospects of falling inflation, which would open space for an expansionary monetary policy.

However, in many countries there are fewer arenas for anti-crisis policies than before the crisis 2008-2009, therefore, the measures available are less powerful than on that occasion. In face of a possible deteriorating global economic situation there would be less capacity to coordinate action among the main economies.

Lastly, the report states that some of the principal challenges for Latin American and the Caribbean economic policy are to prepare for an eventual deterioration of the international situation, taking into account the possibility of sudden changes in the external situation and the delay in the impact of macroeconomic policies, to design a countercyclical fiscal policy package and ensure that it is financed for easy implementation, depending on the circumstances, to protect jobs and the most vulnerable social sectors and to strengthen intraregional integration.

The Organization warns that if the situation in the Eurozone gets worse, the international context could deteriorate

FAO: Food prices almost unchanged

11 December 2011

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

The FAO Food Price Index in November was virtually unchanged from its October level. At the new level of 215 points, the Index was 23 points, or 10 percent, below its peak in February 2011 but remained two points, or one percent, above its level in November 2010. The prices of cereals, one of the main commodity groups included in the Food Price Index, dropped by 3 points or 1 percent from October. The retreat was largely driven by wheat prices, which dropped 3 percent, while rice quotations fell only slightly and coarse grain prices remained virtually unchanged. Nevertheless, the cereals index remained 6 points higher than in November 2010.

Contributing to the downward pressure on cereal prices is the significant upward revision of the 2011/2012 global cereal supply estimate as a result of better crop prospects in some Asian countries and the Russian Federation, and larger than anticipated stocks in the latter. Other factors include deteriorating world economic prospects and a strong U.S. Dollar.

ILO launches first global business and disability website

08 December 2011

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

The ILO has taken a major step toward promoting the inclusion of people with disabilities in the workplace with the launch of a pioneering new global knowledge sharing platform linking scores of multinational enterprises and organizations representing employers and networks of people with disabilities. The Network and website will also provide international businesses with information on how to include employment of people with disabilities in their work plans.

The new ‘ILO Global Business and Disability Network’ website: www.businessanddisability.org was launched on the occasion of the International Day of Persons with Disabilities, and represents a joint effort of the ILO Disability Team in the Skills and Employability Department (EMP/SKILLS) and the Bureau for Employers’ Activities (ACT/EMP).

ECLAC: India could become an important trading partner for Latin America and the Caribbean

07 December 2011

Newsroom Staff

By Fernando Álvarez: Ex IMF Economist

According to ECLAC, exports from countries in Latin America and the Caribbean to India represented only 0.9% of the region's total exports in 2008-2010 and 6.2% of those sent to Asia-Pacific in 2010. Although the figure was lower than that of exports to other nations, such as Korea and China, there is significant potential for increasing it in the medium term.

In a new publication entitled India and Latin America and the Caribbean. Opportunities and challenges in trade and investment relations, the Organization of the United Nations reveals that the outlook is promising, in particular in the present context of the larger influence of emerging nations in the world economy, including India and the countries of Latin America and the Caribbean.

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Charles Baudelaire - Les Fleurs du Mal

Out of the heart of turbulent nineteenth-century Paris came Charles Baudelaire’s 1857 poetry collection Les Fleurs du Mal. Unapologetically bold, these poems cut to the core of life in modern Europe through frank explorations of sexuality, art, death, exoticism, and the city. Together the poems in Les Fleurs du Mal form a mysterious and shocking bouquet full of vivid themes, compelling and terrifying characters, and seductively beautiful language. Although some poems in this anthology were banned until the mid-twentieth century, Baudelaire’s powerful voice could not be forever silenced. Readers all over the world have embraced Les Fleurs du Mal as a literary tour de force, one that has forever changed the landscape of art and literature.

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Charles Baudelaire - Les Fleurs du Mal