The return of private capital to Latin America: a word of caution in 1992 for ‘successful’ countries

Abstract

Optimism has replaced pessimism, as Latin America has seen improvements taking place in the past few years, and particularly in 1991. Budget balances have been improved, the printing of money moderated, inflation reduced, and investment projects better evaluated. But there are also many persistent problems. Private and public investment is low and public wages are far below market levels. Poverty and income concentration continue to increase in many LACs, to worse levels than before the debt crisis of the early 1980s. Despite clear improvements, therefore, crucial problems remain.

Comments presented in June 1992 published in J. Williamson, S. Griffith-Jones et al., Fragile Finance (ed. by J.J. Teunissen, FONDAD, The Hague, 1992). We have added two phrases referring to Chile.