OBRA PARTNERSHIP CARIBBEAN LEARNING & LAUNCH EVENT Kingston, - - PowerPoint PPT Presentation

OBRA PARTNERSHIP

CARIBBEAN LEARNING & LAUNCH EVENT Kingston, Jamaica

12 – 14 April 2010

THE PROBLEM

• RISING UNEMPLOYMENT TWICE AS HIGH

AMONG THE YOUNG

• POOR QUALITY AND/OR INCOMPLETE

EDUCATION FEW INFORMAL JOBS

• REZAGADOS, YOUTH AT RISK, OS MARGINAIS
• BIG PROBLEM: 50% POPULATION
• GAP BETWEEN RICH AND POOR GROWING
• ECONOMIC/SOCIAL GROWTH OR CONFLICT,

UNREST, UNDERMINE

NO VACUUM

• INFORMAL SECTOR OR CRIME PROVIDE THE

ONLY ALTERNATIVES TO JOBS

• GOVERNANCE: INFORMAL JUSTICE
• ECONOMICS: LOW PRODUCTIVITY & INCOMES
• SOCIAL: EXCLUSION (WRONG ADDRESS,

WRONG RACE, WRONG SCHOOL, WRONG NAME)

PERU GUATEMALA JAMAICA

• MIDDLE INCOME BUT VERY DIFFERENT
• HIGH INCIDENCE & GROWING INFORMALITY
• HISTORY OF CONFLICT
• SKEWED DISTRIBUTION OF INCOME
• DUAL CULTURES
• HIGH REMITTANCES: SAFETY NET
• WEAK PUBLIC SECTOR.

BIG DIFFERENCES

PERU GUATE JAM GROWTH 0.9%

• .05%
• 4.2%

INFLATION 1.2% 2.2% 8.6% CURRENT DEF $0.8B $0.6b $1.4b DEBT/GDP 26% 33% 132% PER CAP GDP $8,600 $5,200 $8,300

OUTLOOK

• COMMODITY PRICES ARE RISING
• CAPITAL FLOWS SLOWED
• DEVALUATION BOOSTS EXPORTS BUT ALSO

EXTERNAL DEBT AND INFLATION

• FISCAL DEFICITS MUST BE REVERSED
• LOW GROWTH AND LOW EMPLOYMENT IN

SMALL, OPEN, NET IMPORTING ECONOMIES

169 43% LAC-7 is the simple average of the seven major Latin American countries, namely Argentina, Brazil, Chile, Colombia, Mexico, Peru and

• Venezuela. These countries represent 91% of Latin America’s GDP.

CAC-7 is the simple average of Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

(Index of Fuel and Non Fuel Commodities, Average 91-97=100)

Commodity Prices and Terms of Trade: difference btw big and small countries.

Apr-08 Oct-08 Jul-08

383

Fuel Food Metals 79% 12% 60% Variation in % 241 150 200 250 300 350 400 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Jan-09 Apr-09 Jul-09 Oct-09

Commodity Prices

Source: IMF

8.6%

• 1.0%
• 2%

0% 2% 4% 6% 8% 10%

LAC-7 CAC-7

Terms of Trade

(Mar.09 - Jun.09 Variation)

Beginning of Global Recovery

External Vulnerability

LAC-7 is the simple average of the seven major Latin American countries, namely Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. These countries represent 91% of Latin America’s GDP. CAC-7 is the simple average of Costa Rica, El Salvador, Guatemala, Dominican Republic, Honduras, Nicaragua and Panama. * Excludes El Salvador and Panama

LAC-7 CAC-7

Current Account Balance

LAC-7 CAC-7*

Liability Dollarization

(Public Debt and Banking System Dollarization; 2008) (2008, % of GDP)

0.4%

• 11.3%
• 12%
• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% Public Debt Banking System Public Debt Banking System

38% 65% 13% 38%

0% 10% 20% 30% 40% 50% 60% 70%

Fiscal Vulnerability

*Source: Own calculations based on ECLAC and WEO

LAC-7 is the simple average of the seven major Latin American countries, namely Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. These countries represent 91% of Latin America’s GDP. CAC-7 is the simple average of Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

Fiscal Balance

(2009 Estimate*; % of GDP and % of Revenues)

Public Debt

(2009 Estimate*; % of GDP and Years of Revenues)

% of GDP % of Revenues % of GDP % of Revenues

LAC-7 CAC-7

• 2.5%
• 3.2%
• 9.9%
• 20.0%
• 25%
• 20%
• 15%
• 10%
• 5%

0%

% of GDP Years of Revenues % of GDP Years of Revenues

LAC-7 CAC-7

32% 35% 1.2 2.0

0% 50% 100% 150% 200% 250%

GOV’T SOLUTIONS

• ENGAGE INFORMAL GOVERNANCE STRUCTURE

OR COMBAT IT?

• DECOPAZ: REBUILD SOCIAL/ECONOMIC CAPITAL
• SQUATTING: (JA 30%) PROPERTY OWNERSHIP
• TRAIN: (MORE WELDERS?)
• KURP: INTERNSHIPS, COLLATERAL
• BUT: NO FISCAL SPACE
• DOUBLE IDB STILL NOT ENOUGH

GOV’T CAN’T DO IT ALONE…

• PRIVATE SECTOR INTERVENTION TO FINANCE

AND MANAGE INFRASTRUCTURE(ROADS, WATER, AIRPORTS, ELECTRICITY, EVEN SCHOOLS)

• CORPORATE SOCIAL OUTREACH: INTERNSHIPS
• DALLAS CASTLE: FINOR: PARTNERS NOT

EMPLOYEES OR SUPPLIERS