Latin America is better prepared for crisis than ever before and still expects its economic growth to be over four percent. The current food and energy crisis, however, has widely varying negative effects on the region. These are the major findings of the seminar of the Economic Commission for Latin America and the Caribbean (ECLAC) organized at the behest of member countries and held in Santiago, Chile on September 4 and 5, 2008. ECLAC is one of the five regional commissions of the United Nations.



The seminar examined the challenges posed for Latin America and the Caribbean by global food and energy scarcity and also analyzed public policy options to address the situation. In her welcoming address, Laura López, Secretary of the Commission for ECLAC, called this seminar the first step in a process of analysis, elaboration of proposals, and technical consultation.



The seminar’s analysis of problems points to external causes and to economic as well as social effects. Some challenges are shared by the entire region, such as the need to curb inflation while, at the same time, the Federal Reserve Bank weakens the US dollar. With regard to the economy, different questions arise concerning changing terms of trade. Some net food exporters benefit from soaring food prices and need to handle their extra income wisely — but are threatened by the Dutch disease of negative effects of trade surplus-related currency appreciation on other exporting sectors. On the other hand, net food importers face the opposite problem and have to deal with worsening living standards. Social aspects of the crisis are increasing poverty and malnutrition, especially in Bolivia, Haiti, Guatemala, and Nicaragua.



The seminar recommends, besides emergency aid, the following counteractive policies. With regard to food, countries shall develop policy frameworks that can tie in short-run concerns relating to price shocks with the long-term need to increase production and reposition agriculture. With regard to energy, the seminar points to four objectives: increasing energy security; promoting energy conservation and efficient use; diversifying the energy matrix; and fostering social equity in energy access and consumption. Generally, a process of economic restructuring towards new technological capabilities, while avoiding overspecialization, is required to make the region less structurally vulnerable to international price volatility. (Manuel Adams)



Please visit the seminar’s website for further information

Published in: ECC-Newsletter, October 2008