By Benjamin Flowers
The Economic Commission for Latin America and the Caribbean, ECLAC, this week called for countries to make economic adjustments in light of its prediction that the value of Latin American and Caribbean exports will decline.
On Tuesday ECLAC presented its annual report “Latin America and the Caribbean in the World Economy 2015. The regional trade crisis: assessment and outlook” in Mexico City.
The Commission, charged by the United Nations to help strengthen regional economic development, said that exports will decrease for a third consecutive year in 2015 and will contract by 14 percent.
“The region is at a crossroads: either it continues along the current path, restricted by the global context, or it commits to a more active international insertion that favors industrial policy, diversification, trade facilitation and intraregional integration”, Alicia Bárcena, ECLAC’s Executive Secretary, stressed.
She underscored that the situation puts greater pressure on countries to make economic adjustment measures, making up for lost opportunities which were untapped during the commodities price boom.These include a lack of investment in new technologies and infrastructure and the improvement of production processes.
ECLAC presented a list of factors which prohibited robust regional trade, and foreshadowed very low recovery in 2016.
Those factors included: a change in the economic cycle, marked by excess liquidity, the fall of aggregate demand, less ability by emerging countries to absorb external impacts, China’s deceleration, growth of financial assets beyond the real economy, and a changed trend in capital flows in the region.
The Commission also cited the recessionary bias that characterizes the current global economic context, preventing trade from recovering the dynamism it showed in the period prior to the 2008-2009 crisis.
Central American countries are expected to be slightly less affected because of their level of trade with the United States. If those predictions hold true, Belize while its exports are in decline, will receive marginal benefit due to the fact that the US is the second largest importer of Belizean goods.
According to the Statistical Institute of Belize, the United States received some 15.8 percent of Belize’s domestic exports in the August installment of the External Trade Bulletin.