Magazine article Americas Quarterly

Latin America in the New Asian Reality

Magazine article Americas Quarterly

Latin America in the New Asian Reality

Article excerpt

POLICY WONK CORNER

In his opening statement at the Global Development Network's 2007 conference, Lawrence Summers began by noting the historical significance of the "spectacular ascendancy of Asia on the global map." Meeting in Beijing, China, nearly 600 researchers, development practitioners, and policymakers agreed, noting that the rise of Asia will continue to yield far-reaching economic, social, and political implications. For Latin America, the question is, will this rise leave them behind or provide an engine for development?

The two giants: India and China

Potential bottlenecks in achieving sustained growth are likely to hinder the global economic impact of India's rise. Among the most pressing concerns facing India, Professor Shankar Acharya of ICRIER (India) noted the fiscal burden imposed by populist policies, inadequate and under-utilized infrastructure, labor market rigidity, weak agricultural performance, and overdue economic reforms. In contrast, China's rapid growth and $3.2 trillion economy, in the view of Dr. Linda Yueh of Oxford University, provide a unique model of a transitional country with high, sustainable economic growth. But, China's rise is not just tied to economics. A pragmatic approach to policy formulation, which is based on experience and not ideology, contributes to its economic success.

Can Latin America Join the Party?

Specialists explored how the rise of Asia effects other regions, highlighting both the winners and losers. In Latin America, low growth rates and high inequality have led to great anxiety about the implications of an emerging Asia. But, the actual effects vary by country. In Brazil, an increasingly open economy, Ilan Goldfajn of Ciano Investments noted that exports to China from 2000 to 2005 accounted for approximately 12 percent of real GDP growth. Across the region, Marcelo Olarreaga of The World Bank emphasized, China's economic expansion has triggered negative shocks in only 15 percent of all industries. …

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