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FOREWORD
Dynamic, Resilient Latin America
hile the global economic crisis that began in 2008 inflicted deep wounds on many nations, the dynamic and resilient economies of Latin America suffered less and rebounded more quickly. Signs of recovery are positive, owing in part to widespread adoption of sound macroeconomic practices. In addition, Latin American nations have implemented significant social initiatives and achieved remarkable success lifting people above what is considered the poverty line for advanced economies (an income of $12 per day per capita). The population making this economic ascent is more than six times higher in Latin America than
it is in the rapidly expanding economies of East Asia.
However, the average income of a Latin American is still lower than the world average, and adjusted income levels in 2009 compared to 1965 are essentially unchanged, suggesting the region is stuck economically. Growth, though still positive, has slowed each of the past five years.
In order to achieve sustainable levels of social and economic development, the region must address important structural challenges. These include vast social disparities between the region’s peoples, low levels of domestic saving and investment, excessive emphasis on exports of raw materials and other low-value-add commodities, and relative lack of competitiveness of the region’s industries compared with other regions.
Among the keys to addressing these challenges are education, to lift the skill base of the work force; catch-up technology, which supports shifting resources from lower to higher productivity activities; and of course, reliable basic infrastructure for communications, transportation, and power. In addition, fiscal responsibility and government transparency can deliver tremendous impact in terms of improving competition and spurring economic development.
Signs are positive for Panama with its thriving services sector, its strong connectivity both within the region and with other continents, and stable political environment. Government and private industry have joined forces to construct world-class infrastructure and stimulate both foreign and domestic investment.
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