## An IMF for Tomorrow — Latin America and the IMF

## Source details

**Canonical URL:** [An IMF for Tomorrow — Latin America and the IMF](https://www.imf.org/-/media/files/publications/fandd/article/2024/06/garcia-silva.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/fandd/article/2024/06/garcia-silva.pdf.md)
- [Structured JSON version](/-/media/files/publications/fandd/article/2024/06/garcia-silva.pdf.json)

---

### Historical role and participation
- 19 out of 44 delegations came from Latin America and the Caribbean at the Bretton Woods Conference.
- By the time the IMF started operations in 1947, an overwhelming majority of Latin American countries—representing more than 40 percent of the Fund’s initial membership—had signed its Articles of Agreement.
- The region’s early commitment underscored Latin America’s essential role in building a post–World War II system geared toward growth and stability.

### Achievements and persistent challenges
- Achievements:
  - Inflation and fiscal profligacy have been dramatically tamed in all but a handful of cases.
  - Since the 1980s, IMF-supported programs, with strong domestic ownership, have proved effective in many countries, from Chile and Mexico to Brazil and Jamaica.
  - Several Latin American central banks are well along the path of easing monetary policy after having withstood major global shocks.
- Persistent challenges:
  - Great inequality of income and opportunity remains, creating significant security, crime, and social challenges.
  - Historical political scars from Cold War-era encroachment still hamper national consensus on how to achieve inclusive growth.
  - Disappointing growth in the past decade despite macroeconomic stability.
  - Internal and regional infrastructure gaps limit effective regional integration and diversification.

### Importance of multilateralism and IMF mandates
- Latin America’s future will continue to depend on multilateralism and the achievement of the IMF’s core mandates, as set out in Article I.
- The IMF must double down on these objectives and continue to adapt to new global circumstances to meet the region’s needs.
- The international financial architecture exists to prevent the dislocations that made autarky and aggressive war feasible in the 1920s and 1930s.
- Speaking truth to power—particularly about risks to small and medium economies from disruptive deglobalization—must remain a guiding principle for the IMF.

### Major global risks and region-specific implications
- Geoeconomic fragmentation:
  - A major geopolitical break that disrupts trade and finance between the main economic zones would be catastrophic for the overwhelming majority of Latin American economies.
  - Latin American economies are more at risk due to relatively small size and heavy specialization in natural resources.
- Climate change:
  - Direct impacts from a hotter planet are a net negative, but effects vary across the region.
  - Countries dependent on fossil-fuel fiscal revenues face an exceedingly painful transition to clean energy.
  - Countries with natural resources such as lithium and copper and comparative advantages in renewable energy can expect positive tailwinds for years to come.
  - Sound institutions are crucial to ensure opportunities are not squandered, to manage climate finance properly, and to address water scarcity, climate migration, and energy security.

### Policy implications and IMF engagement
- The IMF should:
  - Continue adapting governance to new global circumstances to remain the prime forum for international economic cooperation.
  - Provide technical assistance and financing, in partnership with other institutions, to support national efforts in the region on climate transition and related challenges.
  - Emphasize multilateral solutions to avoid economic fragmentation and to mitigate the effects of climate change on Latin America.
- Geopolitical actors:
  - The US has an outsize responsibility for a well-functioning international financial architecture and peaceful prosperity in the Western Hemisphere; a US withdrawal from internationalism would be highly detrimental.
  - Constructive approaches by both the US and China toward peaceful multilateralism are necessary as the IMF supports Latin America’s future.

*Pablo García‑Silva is a professor at the business school of Universidad Adolfo Ibañez and currently chairs a panel conducting an external evaluation of the IMF’s Independent Evaluation Office. He is a former vice‑governor of the Central Bank of Chile and a former member of the IMF executive board.*

---


_Source: https://www.imf.org/-/media/files/publications/fandd/article/2024/06/garcia-silva.pdf_