Latin America has enjoyed tremendous economic dynamism and a rising quality of life over the past decade. But the region’s transformation is not yet complete. Leaders across the region should capitalize on today’s favorable conditions, transforming their countries to the next level, and ensuring that the benefits of growth are more widely shared. The question is: how best to do that? As I travel through the region next week—visiting Panama, Uruguay, and Brazil—I’m looking forward to hearing the views of government officials, parliamentarians, and university students on the key challenges facing their countries today.
Recent popular protests in the Middle East and North Africa, although likely to have a negative economic impact in the short run, might actually help to unleash the countries’ long-term growth potential. By providing the impetus for reforms, these events may encourage better governance, greater transparency, and more competition—in other words, tackling many of the constraints that have held back progress in these societies. In a recent (video) interview, I talk more about events in the region, the policy challenges, and what actions might help these countries achieve higher standards of living and employment for all sections of society.
As G-20 Finance Ministers and Central Bank Governors gather in Paris this weekend, their meeting—the first ministerial level meeting of France’s G-20 presidency—comes at a critical juncture, critical for the global economy, with tensions and risks emerging that require strong policy responses, and critical for ensuring actions on international policy cooperation and reform. So, with all eyes turning to Paris, here is some recommended reading for G-20 watchers.
The international monetary system is a topic that encompasses a wide range of issues—reserve currencies, exchange rates, capital flows, and the global financial safety net, to name a few. Some are of the view that the current system works well enough. I take a less sanguine view. Certainly the world did not end with the crisis that began in 2008 and a recovery is under way. But, it is not the recovery we wanted—it is uneven, unemployment is not really going down, there are widening inequalities, and global imbalances are back. Reform of the international monetary system may be wide-ranging and complex. But concrete reforms are needed to achieve the kind of well-balanced and sustainable recovery that the world needs, and to help prevent the next crisis.
Health care reform is tricky. On the one hand, providing access to affordable health care is of paramount importance. But spending on health care is putting enormous pressure on public purses all over the world, and it’s only getting worse. How can we fix this? How can governments keep their health care promises to citizens without busting the budget? Despite the obvious differences, advanced and emerging markets share something very basic in common—they all need to get “more bang for their buck” when it comes to public health care spending.
Fiscal policy this year in some leading advanced economies is shaping up to be quite different from what was expected just last November, according to the just-published Fiscal Monitor update. Some of this change is attributable to the somewhat better than projected fiscal results in 2010. Most of it, however, is due to additional stimulus measures introduced in recent months. Altogether, sovereign risks remain elevated and in some cases have increased since November 2010. No amount of deficit reduction this year, however, can be sufficient to restore countries’ fiscal accounts to robust good health. Putting the government accounts in order will require a multi-year effort. So, how are countries doing in setting out their longer-term plans? Here, we see somewhat of a mixed picture.