Prospects for Latin America in the new world economic order

Beginning with a description of the new multipolar, market-oriented global economic system, this paper examines the evolution of Latin American economies from the high growth period of the 1960s and 70s, through the lean years of the ''lost decade,'' and into the renewed growth of the 1990s, focusing on how their experience has prepared them for future economic and political development. The author argues that, although the liberalizing reforms implemented during the debt crisis have once again made the region attractive to foreign capital, the process is not yet over. Increased capital flows have brought their own destabilizing problems, such as appreciated exchange rates and growing current account deficits, which make cautious macroeconomic policy as important as ever. In addition, much work remains to be done to modernize the state and reform the private sector. However, the outlook is positive. Domestically, the discrediting of the old impart-substitution model has built an internal consensus favoring market-based, internationally-competitive policies. Meanwhile, external factors such as resumed OECD growth, reductions in trade barriers resulting from the Uruguay round, buoyant commodity prices, diversified sources of external investment, and increased competitiveness brought about by sub-regional integration all provide a climate conducive to continued success of the open export-oriented growth model.