What was the cause of the current difficulties facing so many countries in Latin America?
5. The 1990s started with much promise. After the “lost decade” of the 1980s, many hopes were pinned on reforms, both political and economic. In a great number of countries, the introduction of market-oriented policies paid dividends: in particular, inflation was durably lowered across a continent historically prone to repeated bouts of high inflation. Market liberalization and privatization attracted large volumes of foreign capital, both portfolio and FDI. And for the continent, if not for every country, this paid off in terms of growth: between 1991-97, per capita GDP grew by an average of nearly 2 ½ percent per year, compared to a average annual drop of 1 percent throughout the 1980s. However, since 1998 growth has slowed sharply, and real per capita income levels today are basically back to their levels of 25 years ago. So what went wrong? 6. The debate about the causes of the current crisis is ongoing, and I welcome this debate. But let me say clearly what in my view is not the c
