Global crisis: policies to face the crisis in Latin-America

According to ECLAC, the demand for Latin American exports is dropping, and in many cases, the terms of trade are also deteriorating. Additionally, access to external financing is becoming increasingly difficult to obtain. This occurs in a context of uncertainty that is deteriorating the labor market and negatively affecting consumption and investment. Under this situation Governments are taking actions in order to minimize the effects of the global crisis.

At first, most policy initiatives were geared at assuring the liquidity of local financial markets, but the focus of policy announcements has gradually shifted towards fiscal policy. However, since the impacts of the crisis differ from country to country, so do the instruments used to counteract them, and this explains the broad array of policies that are being implemented. These differences are partly explained because problems are not identical in every country, but mostly because each country has different capacities to apply these policies, explained in turn by their ability to finance them and the institutional framework in which they are immersed.

In the study “32 Latin American Countries Implement Policies to Buffer Impact of International Economic Crisis”, the ECLAC classifies the types of polices in five categories: monetary and financial; fiscal; exchange-rate and foreign-trade policy; sectoral; and labor and social.