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Pictures and information for Assessing the future
of Latin America:
Disclaimer: These notes below were taken by students
during the conference. Any misrepresentation of facts, omission or error of
interpretation is unintentional. They are intended to encapsulate the
presentations for conference attendees and do not represent the views of MIT
Sloan School of Management.
To download the presentation of this panel, press
here
Dr. Vinod Thomas - World Bank
 | Began stating the four dimensions of Latin American prospects in terms of
Economic Growth, Distribution, Importance of Natural Resources and
Socio-economic and political stability |
| In terms of growth, showed a comparison of Latin America with other
regions according to several indexes that indicate how easy it is to run a
business (these indexes include flexibility of hiring, days to start a
business, days to enforce a contract). He showed how these indexes do not look
favorable at all in the case of Latin America.
In terms of Socio-economic stability, “Latin America is still standing in an
unfavorable position in social progress”. “Real growth for the vast majority
of the people has to draw on all kinds of wealth”. |
| Dr. Thomas then mentioned how exploitation of natural resources can be a
great way out for poor countries. Nokia grew out of knowing how to expertly
exploit the natural resources of Finland. “Brazil has a huge potential to do
the same”. |
| In terms of distribution, he showed using data from Brazil how welfare
increased with low inflation. “Low inflation is good for the poor”. In the
case of Brazil, the economic reforms have made it more equitable, more
sustainable and more competitive. |
| Dr. Thomas finished stressing the importance of welfare for the people.
“One can imagine a future in the next 15 years in which Latin America will be
a leader in terms of welfare of their peoples”.
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Dr. Roberto Rigobon - MIT Sloan School of Management
| “The problem of Latin America is one of behavior”. |
| He compared the problems of Latin America with those of an overweight
person: they cannot be cured by a medical treatment, but by a change in
behavior. |
| The problems that Latin America had in the 70s were important, but easy to
understand and could be cured by simple antibiotics. Those that Latin America
countries are facing now are much more complicated and need behavioral
changes. |
| For this, “we need to create an environment that promotes wealth”. “In the
future, the only rule should be that we should be as flexible as possible”.
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Q&A
Question: For Dr. Mahuad about the fundamental need for Latin American
governments to invest heavily on education as a way to go out of economic crisis
in the future.
Answer:
Dr. Mahuad: He agreed but mentioned how difficult it was to balance deficits
in the short term.
Dr. Thomas: However, returns on education have been fairly fast in some years
(it has only taken 5 to 7 years to see the returns).
Dr. Rigobon: We must always take into account that long term goals are usually
incompatible with short term restrictions.
Question For Dr. Mahuad about his decision to dollarize the Ecuadorian
economy during his mandate.
Answer:
Dr. Mahuad: After making many consultations, we came to the conclusion that
“dollarization was the only possible alternative at my time”.
Dr. Rigobon: At the time Dr. Mahuad had to choose among hell 1, hell 2 and hell
3. He had little flexibility
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Dr. Vinod Thomas from World Bank
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During his presentation, Dr. Thomas emphasized the importance of welfare for the people
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The panel was masterfully managed by Dr. Lessard and impeccably complemented by Dr. Rigobon
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All four leaders reflected upon the future of Latin America
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