THE AMERICAS: Latin America 'needs new economic strategy' By RICHARD LAPPER
After more than 10 years of market-oriented economic reforms, Latin America's external dependence has become "accentuated", according to the executive director of the United Nations Economic Commission for Latin America and the Caribbean (Eclac).
Jose Antonio Ocampo said that pursuit of so-called Washington consensus policies had failed to deliver enough economic growth and that the region needed a new production-oriented economic strategy.
"Simply maintaining macroeconomic equilibrium and opening up economies has not worked and nothing indicates that it is going to work," he said.
Mr Ocampo, a former Colombian minister of finance, was speaking yesterday shortly after publication of a downbeat annual assessment of regional economic trends by Eclac.
The commission's report shows that the region is expected to grow by an average of 4 per cent in 2000 and by 3.7 per cent in 2001, compared with only 0.3 per cent in 1999. But much of the expansion is due to growth in exports; domestic consumption has not recovered at the speed expected and investment levels are still below those of 1998.
Open unemployment remains at a level described by the report as "almost a historic high" of about 9 per cent, the same figure as in 1999. "It is very worrying," said Mr Ocampo.
The report shows Latin America has made progress in further reducing inflation and bringing order to public finances. Some 80 per cent of countries in the region now have inflation in single digits and the pace of price rises in the two countries that have been least successful in this area - Venezuela and Ecuador - has begun to slow.
But stability has not led to more investment or lending. Even though domestic interest rates fell by 2 percentage points during the year, there has, on average, been no reactivation of credit.
The region's current account deficit fell from Dollars 53bn (3.1 per cent of gross domestic product) to Dollars 49bn (Pounds 33.3bn) (2.5 per cent).