Carnegie Endowment for International Peace
The global financial crisis calls for new thinking on the role that capital controls can play to reduce vulnerability to financial shocks and economic downturns.
As middle-income countries recovering from the global financial crisis face high unemployment and growing government deficits, existing social services will become stressed. Maintaining these safety nets is a vital part of recovery.
Latin America performed better during this crisis than in the previous three global recessions. It continues to lag behind other emerging markets, however, underscoring the need to address its persistent structural weaknesses.
The proposed U.S.-Colombia Free Trade Agreement could potentially have adverse effects on Colombia’s economy and stability, and particularly on small farmers, who have already been disproportionately affected by Colombia’s internal conflict.
The recent Colombian court decision to preserve a two-term limit for the presidency is a triumph for democracy in a region where hyper-presidencies are becoming more common.
On a global stage, losers of the decade include the people of Iraq, Afghanistan, and Pakistan, who are suffering from violence, poverty, and extremism. Global winners include Google, J.K. Rowling, and Hugo Chavez, who has proven more resilient than expected in surviving both his opponents and his own misdeeds.
There is widespread agreement that NAFTA has fallen short of its stated goals. Mexico’s experience under NAFTA shows that the U.S. trade agreements must include robust funding for development and avoid restrictions on government policies proven to promote dynamic development.
Migrants are economic assets for both their host and home countries, but they are disproportionately affected by the global financial crisis. Temporary migration programs and collaboration with migrant-sending countries can help maximize the economic benefits of migration, even in times of crisis.
Mexico’s disappointing experience with NAFTA underscores the need to reform trade agreements between the United States and developing countries.
The global financial crisis was a result of failures in both the market and state—markets created financial turmoil and regulatory agencies failed to detect risks and correct imbalances. As Latin American countries emerge from the crisis, both the market and state are needed to ensure sustainable growth.