## Latin America—Taking the Helm

_IMF Blog, November 25, 2011_

## Source details

**Canonical URL:** [Latin America—Taking the Helm](https://www.imf.org/en/blogs/articles/2011/11/25/latin-america-taking-the-helm)

## Other formats

- [Markdown version](/en/blogs/articles/2011/11/25/latin-america-taking-the-helm/index.md)
- [Structured JSON version](/en/blogs/articles/2011/11/25/latin-america-taking-the-helm/index.json)
- [Bundle manifest](/en/blogs/articles/2011/11/25/latin-america-taking-the-helm/bundle-manifest.json)

## Bibliographic details
- Authors: Christine Lagarde
- Published: November 25, 2011

---

### Regional outlook and context
- The IMF has "187 members," and the Managing Director is engaging regions to "discuss, to listen, to learn."
- The euro area "storm" casts a long shadow over the global economy, but Latin America has achieved "sustained growth with reduced vulnerabilities."
- Recent performance credited to "strong fundamentals, sound policy frameworks, and prudent macroeconomic policies."

### Macroeconomic resilience and lessons
- Latin America was highly exposed in the past; the "2008-09 global financial crisis" would previously have triggered major upheavals.
- Now the region offers lessons for advanced countries: "saving for a rainy day" and ensuring "risks in the banking system are under control."
- The IMF "stands ready to support and assist countries with sound macroeconomic management that might be affected by the global crisis as bystanders."

### Risks and policy recommendations
- No country is immune in an interconnected world; countries should "take all necessary precautions and make all needed preparations."
- Fiscal policy guidance:
  - "Continue rebuilding buffers, including by maintaining prudent fiscal policies—this would create room for maneuver should the economic situation turn sour."
  - "Fiscal consolidation should not come at the expense of either needed social programs or productive investment in education or infrastructure."
  - "Explore the scope for mobilizing more revenues, where tax collections are low, or making spending more focused and efficient."
- Country-specific near-term focuses:
  - Mexico: "keep a keen eye on conditions in the United States and Europe, and implement structural reforms to unleash its growth potential."
  - Brazil: "increase domestic savings to reach higher and sustained growth."
  - Peru: "continued reforms to achieve more inclusive growth while preserving its hard-won macroeconomic stability."

### Social inclusion and development
- "Growth alone is just the first step"; the region "needs more socially inclusive growth" to build "fairer societies based on shared opportunities and social justice."
- Inequality historically has "been the bane of Latin America," hindering broad sharing of growth and contributing to social and political instability that harms economic prospects.
- IMF research indicates "more equal societies are associated not only with greater economic stability, but with more sustainable growth over time."
- Social programs and outcomes:
  - In Brazil and Peru, "indicators of poverty, inequality, and human development have improved dramatically over the past decade or so."
  - Brazil’s "Bolsa Familia" and Mexico’s "Oportunidades" have "enjoyed particular success in breaking the intergenerational transmission of poverty" and are "now models for the rest of the world."

### Leadership, global role, and outlook
- The Managing Director visited "three important countries in Latin America—Brazil, Mexico, and Peru" coinciding with the "transfer of leadership in the Group of 20 to Mexico."
- Mexico and Brazil described as "major global economic engines."
  - Mexico: "about to take the helm of the Group of 20" and positioned to "shape our collective economic destiny over the coming year."
  - Brazil: "one of the world’s leading emerging markets," "deeply integrated into the global economy," and central to global economic debate and cooperation.
  - Peru: "a new rising star—surely among the new wave of leading emerging markets."
- Concluding assessment: "Latin America is now on a firm foundation, and can look ahead to lasting prosperity and stability that can lift the living standards of all."
- From the IMF vantage: "a new partnership with a new Latin America" is anticipated.

*Source: Latin America—Taking the Helm (Christine Lagarde, November 25, 2011).*

---


## References

- [all necessary precautions](http://blogs.imf.org/2011/10/05/adjusting-the-economic-sails-in-latin-america/)
- [United States](http://blogs.imf.org/2011/11/11/us-housing-and-labor-pains-central-america-and-the-caribbean-feeling-the-pinch-too/)
- [IMF research](http://blogs.imf.org/2011/04/08/inequality-and-growth/)

_Source: https://www.imf.org/en/blogs/articles/2011/11/25/latin-america-taking-the-helm_