Crisis and Reform in Latin America: From Despair to Hope

Abstract

During the past few years, the Latin American countries have gone through major economic reforms that have greatly changed the region's economic landscape. What started as an isolated and slow process -- Chile the sole reformer in the 1970s -- has become a sweeping movement affecting virtually every country in the region. The economic system that had emerged in the 1930s, based on heavy government intervention, protectionism, and broad regulations, has given way to one based on market orientation, openness, and competition. Perhaps the greatest sign of change is the eagerness with which most nations in the region have pursued free trade agreements with the industrial world. This contrasts sharply with the economic isolationism and autarkic attitude of only a decade or so ago. What makes the current reform process particularly attractive is that it has taken place at a time when democratic rule has returned to virtually every country, Cuba as an exception. This book deals with the history of the Latin American economic reforms. It analyzes the economic developments in the region from 1982 to 1994. The starting point is the debt crisis of 1982, and the discussion then focuses on the heterodox plans of the mid-1980s, the stabilization programs of the late 1980s, the opening to international trade, the privatization and deregulation process, and social security reforms. Finally, the book describes the circumstances that led to the Mexican peso crisis of December1994. Throughout, the discussion emphasizes the evolution of social conditions in the region, including poverty and inequality.