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Panelists included, from left, Claudio Loser, president, Centennial Latin America, Washington, D.C.; Riordan Roett, Sarita and Don Johnston Professor and director of Western Hemisphere Studies, The Paul H. Nitze School of Advanced International Studies, Johns Hopkins University; CHP director and panel moderator Susan Kaufman Purcell; Mario Castro, vice president, Latin America Strategy, Nomura Securities, New York City; Jonathan Heath, principal, Heath & Asociados, Mexico City; and John H. Welch, executive director and emerging market macro strategist for CIBC World Markets.
CORAL GABLES, Fla. (October 1, 2015) — Despite a significant decline in poverty rates over the past decade and an economic boom spurred by exports of commodities, Latin America at the moment is still the slowest growing economic region in the world.
That was the assessment of Claudio Loser, president of Centennial Latin America in Washington, D.C., who was part of the panel “Modernizing Latin Americas’ Economies: Needed Reforms Spur Growth,” hosted by the University of Miami’s Center for Hemispheric Policy (CHP) on September 25 at the Westin Colonnade Hotel in Coral Gables.
Hosted by the University of Miami’s Center for Hemispheric Policy (CHP), the forum was moderated by CHP director Susan K. Purcell and was held at the Westin Colonnade Hotel in Coral Gables on Friday morning (Sept 25).
“We are highly dependent on commodities, and that is both a blessing and a curse,” said Loser. The recent decline in the price of commodities has led to a downturn in the Gross Domestic Product (GDP) per capita in the region and could lead to a decrease in the growth of the middle class in many countries, he said. Inflation is also increasing, he pointed out.
“All American economies are slowing down,” he said. “But there is no other region that has seen such as sharp decline in growth as Latin America.”
He warned that leaders in the region should not fall into complacency but should embrace change that could boost productivity and lead to better handling of its economies.
One major stumbling block for improvement of in region is its political and institutional reality, said Riordan Roett, professor and director of the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University.
Roett said that from a distance, many aspects of Latin America’s political and institutional systems appear to function normally. “But behind the façade, we find that Latin American institutions are found wanting,” he said. Many countries are marked by “very low level of the rule of law, impunity to crime and administration of justice is found wanting.”
Although there are some exceptions to the rule and countries like Guatemala and Brazil have started to prosecute government officials involved in major corruption scandals, he said, there is still a prevalent spirit that favors “caudillismo” or the old form of government where the leader was the supreme authority and considered above the law.
He noted Bolivian President Evo Morales’ recent attempts at altering the constitution so he could run for another term in office. He also noted that Venezuela, a failed state, has just sentenced opposition leader Leopoldo López to a 13-year prison sentence for leading peaceful demonstrations.
Mexico has its own set of problems with matters of impunity, said Roett. The disappearance of 43 students in the state of Guerrero last year and the government’s lack of clarity surrounding that investigation and prosecution of those linked to that incident has proven problematic.
Several of the panelists agreed that countries in Latin America should expand educational opportunities and improve access to quality schools for citizens. “Only educated people can make educated decisions about who should represent them,” said Roett “The low levels of education in Latin America tell us that we have a long way to go.”
Mario Castro, vice president of Latin America Strategy for Nomura Securities, chose to be “hopeful” about Latin America. He cited several social and economic reforms in Colombia and Peru that could pave the way for an improved society. These reforms included educational reforms in Colombia that would provide 10,000 scholarships a year to low-income students.
