Needed: Global Solutions for International Financial Crises

By Hakim, Peter | The Christian Science Monitor, August 27, 1998 | Go to article overview

Needed: Global Solutions for International Financial Crises


Hakim, Peter, The Christian Science Monitor


Nothing will affect the future of Latin America (and the rest of the developing world) more than the movement of international capital. Unprecedented inflows of foreign capital have fueled Latin America's growth in the 1990s, and offer the region its best hope for sustained economic and social advance. But these same flows, when they reverse course and become capital flight, provoke economic crisis.

The hazards of international capital movements became evident to Latin America in 1995 when investors pulled their money from Mexico. The peso quickly lost two-thirds of its value, and ordinary Mexicans saw promised gains from years of austerity evaporate. Mexican stocks plummeted, the economy shrank, and wages took a nosedive. The effects swept through Latin America, with Argentina averting a full breakdown but suffering a sharp contraction in economic activity and skyrocketing unemployment. A $50 billion international rescue package was required to reassure foreign investors that it was safe to return to Mexico with capital the country needed for its recovery.

Now Russia is teetering on the brink - while most of Asia has been plagued by financial crisis for the past year.

Strengthened by earlier reforms and responding mostly with intelligent policy, Brazil and other Latin American governments have managed to stave off the effects of the Asian and Russian turmoil, but the battle isn't over, and high costs have been paid. Brazil's economy is static, and unemployment is rising. Latin America's best performers - Chile and Mexico - are watching their currencies devalue. Stock markets throughout the region have dropped precipitously.

The threat to Latin America goes beyond any immediate economic setbacks. In the past 15 years, the region has made a dramatic turnabout - its economies were restructured and disciplined, and democratic politics became the norm. But confidence in market reforms will not last if they bring economic trauma in their wake. It will become harder and harder to defend free trade, privatization, and balanced budgets if, instead of sustained progress, they lead the region into the same old boom and bust cycles. That the alternatives are certain to produce worse results will not remain a convincing argument for long. Unrelenting economic insecurity, in turn, is a recipe for political turbulence and demagoguery, not for democratic progress.

It's up to each government to adopt measures to secure the benefits of international capital flows and protect against their perils. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Needed: Global Solutions for International Financial Crises
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.