Dread and I have our differences it appears on this issue. I suggest that while the implementation occurred during the reign of one of the worst human rights abusers, General Pinochet, Chile has developed one of Latin America's better economic systems. That this economic scheme has even developed a calling on behave of even leftist opponents of the prior dictatorship. Now, I don't wish to imply that all is rosy, and that Chile has found the keys to Nirvana. The GINI co-efficient remains among the highest, and reflects a general Latin American historical inclination towards massive income and resources accumulation at the top of the pyramid. The educational system has not performed as well as could be, and during the administration of Bachelet some movement towards remedying this problem took place after student demonstrations.

dreadlocks previously said:

Atabey, in my absence, you made this remark, which i was at pains to save on my pc, so i could revisit it , and ask you this question...what the heck do you mean by this?

From: United States
Milton Freedman and his thoughts are a welcomed part of the mix to DR's development. Outside of the brutal repression and killings in Chile, for example, his advise and the backing of the US treasury assured a transition from socialist policies in Chile to a pro-market oriented scheme that has served Chileans well for the past two decades. Chile has one of Latin America's better economic schemes/policy set-ups. And practically all the political parties, even the socialist, are in fundamental agreement about the validity of the capitalist core to its economic vitality. And again, exports lead the way in Chile, as they must in DR's current and future projections. Export or Die!


what thoughts, might i ask? yes, indulge me, please. i have been awaiting this moment with bated breath..fire away!


Atabey,

Well Dread, first of all welcome back to the Forum, I was referring to several conversations I've had over the last ten years or so with friends and acquaintances from Chile. Most have been of the leftist inclination so my ears perked up when they stated that the foundations of the economic scheme should not be tinkered with substantially. As for what is it that distinguishes Chile's economic performance over most of Latin America, the basic one has to do with her emphasize on being market driven and competitive. Labor costs have been kept in line, public spending have not gone off balance. Her fiscal policies have adjusted Chile's accounts to such a degree that Chile is perhaps the only Latin American state that has the ability, perhaps Brazil has gained this distinction also, to perform a counter-cyclical economic policy, if it needed to. This is an action that requires advanced modern economic understanding and implementation. In addition, I had a conversation back in 2007 with a friend from my College days who is an economist in Puerto Rico and had been to Chile as part of a delegation sent by the government of Puerto Rico to gain familiarity with the Chilean model. He came back very impressed and told me that Chile was vastly better prepared than Puerto Rico to handle the world market place. He told me about the quality of her professional class and the market driven policies that created better outcomes for the Chilean economy.

What do you say, is the Chilean Model a good model to follow or should Latin America look elsewhere, Chavista or Cuba Model perhaps?

You have the floor Dread.

the so called chilean model is nothing more than the supply side monetarist model embraced by Maggie Thatcher and Ronald Reagan, which has given us the wonderful phenomenon of extreme inequitable distribution of income. if you believe that because the GDP of Chile grew, FOR A WHILE in Chile, when the Chicago Boys ruled the economic roost, then go ahead and believe it. the prescriptions were no different than those which the IMF imposes on borrowers....privatise everything, liberalise currency, remove subsidies, disband labor unions, and generally allow the laissez faire crowd to run roughshod over the populace. so, while Chile showed growth in GDP terms, the numbers below the poverty line increased, the wealth was more polarised, and REAL INCOME declined. which is why Pinochet had to change course, chase away the Chicago Boys, reinstitute the minimum wage, and renationalise several industries. besides, it was Allende, not Pinochet, who sent Anaconda packing, and nationalised the lifeblood of the country, copper. funny, Pinochet had to make an about face and adopt Keynesian ecxonomics to restart the economy after it tanked, causing rebellions in the streets. so, Atabey, if you can see the merits in policies which will further polarise the distribution of wealth, eradicate the minimum wage, allow for rampant usury, and tread more forcefully upon a population in which 42% of the citizens ALREADY live below the poverty line, then we have a difference of opinion. Milton Friedman has now , posthumously, been declared an ass in many economic circles. just as Jean Baptiste Say, the originator of supply side economics, is little more than a trivia question today, Milton Friedman will soon be recognised as the fraud he really was.

what the hell does this mean, pray tell?

Her fiscal policies have adjusted Chile's accounts to such a degree that Chile is perhaps the only Latin American state that has the ability, perhaps Brazil has gained this distinction also, to perform a counter-cyclical economic policy, if it needed to.

what does that statement have to do with Milton Friedman?

dread please please ......Just imagine what Comrade Bob did in Zimbabwe and reverse it

Chile's education is a shambles. It would be better to employ Cuban, Chines and E. European teachers to kick start the system.


In Neruda’s Chile, good education eludes masses
Saturday, May 10, 2008 9:18:28 PM by admin ( Leave a comment )

By Liz Mathew
Santiago, May 11 (IANS) In Chile - the land of literary giants like Pablo Neruda and Gabriela Mistral - its young citizens strangely do not have a great affinity for books. The government’s attempts to reintroduce the writers have not had many takers. Concerned about diminishing reading habits among youngsters, the government in this South American nation has proposed a scheme to distribute books to 400,000 poor families. But people here are pessimistic about the programme. They say the government should first give priority to improving educational facilities.

While some Chileans in capital Santiago feel President Michelle Bachelet’s new scheme to refresh literary traditions in the country would at least inspire people to read books, the majority predicts the scheme would be an utter failure.

“If you distribute books to poor families, they will sell them off and buy food with the money,” said Doroti Hecke, an interpreter. Chile’s GDP grew by 5.1 percent in 2007 against 4.6 percent in 2006.

The government’s scheme for 400,000 families envisages a ‘maletin literario’ or box of up to nine books each that includes poetry and fiction apart from an encyclopaedia or a dictionary.

Bachelet’s idea came at a time when teachers as well as educationists were demanding more changes in the quality of educational institutions for economically backward people, including low official grants for such schools.

“Government-run schools have been in a bad shape. The teachers are badly paid. They take several shifts in different schools to earn money. In effect, no child gets attention from them,” Hecke complained.

According to Hecke, a very small percentage of Chilean children study in fully privatised schools, around 40 percent go to municipal public schools, which have improved their standards considerably in the last two years, but around 50 percent attend cheaper public schools which are fully funded by the government.

“But the results from the poor schools are still bad. Pupils from the cheaper schools score an average 50 percent less than their peers at the Grange (private schools),” she added.

In a study on education released by the Organisation for Economic Cooperation and Development (OECD), Chile fared better than other Latin American countries despite its ranking as 40th among 57 developed countries. But it also found that the gap between the performances of different schools was the widest in the region.

Although Chile, with a population of 16 million and almost 91 percent people living in urban areas, has a literacy rate of 95.7 percent, only 31.4 percent go for higher education.

Immediately after taking over as president in January 2006, Bachelet had faced an unprecedented strike - the largest in Chile’s history - from the country’s education sector, with more than one million students demanding an upgrade of the public school system.

The government had then allocated more money for the improvement of the public schools. However, Chileans say, it is not enough to lift the education system which is in a shambles.

Isabel Madiola, director of the education department, Municipality de Providencia, admitted that the current government provides sizeable funds for the education of the poor.

“But there is no coordination between the central government and the 345 communes. Instead of the centre spending the money directly, the local administration should have been given the powers to utilise funds as they can understand the needs better.”

“There should be more decentralisation in the education machinery,” Madiola told a visiting IANS correspondent who traveled there recently with Indian President Pratibha Patil.



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Rising inflation and unemployment in Chile drive workers into debt and poverty
By Roger Silva
8 July 2008
Chile is characterized by some economists as the most “globalized” nation in Latin America. The more conservative among them present it as a model to be followed by other countries on the continent. They point to the country’s supposed stability and security and Chile’s economic growth in recent years.

Nonetheless, behind this rosy view lie enormous irresolvable contradictions that are becoming increasingly evident, revealing a very different reality than the picture painted by the bourgeois economic theorists.

In recent months, Chile has been the scene of violent street confrontations between students and teachers and state security forces over an educational reform that essentially continues the reactionary policy of the Pinochet dictatorship. In addition there have been continuous strikes in sectors ranging from the copper mines to health care.

Recently published data and surveys clearly reveal that the Chilean economy is not as stable or as secure from crisis as the economists have claimed—at least not for the workers, who are confronting the devastating effects of high inflation, wage cuts and rising unemployment.

Rising inflation


The most recent reports on Chilean inflation have shown the biggest price increases in recent years. According to Chile’s National Institute of Statistics (INE), the Consumer Price Index registered a 1.5 percent rise in June, with an accumulated increase of 4.3 percent in the first six months of this year. This is the biggest increase for the month of June since 1991, when a 1.8 percent rise was recorded. The increase over the past 12 months reached 9.5 percent, the largest 12-month rise recorded since June 1994, when it reached 14.4 percent.

There were price increases over the month in seven of eight areas of the economy surveyed. The figures include: transport, 3.6 percent; food, 2.3 percent; housing, 1.4 percent; household products, 0.3 percent; clothing, 0.1 percent; and education and recreation, 0.1 percent. Only health insurance recorded a decrease, falling by 1 percent.

Transport was the area registering the biggest increase, principally due to soaring oil prices, which in the past month have risen above $140 a barrel. Consequently, fuel prices rose by 8.4 percent, registering an accumulated rise of 12.1 percent in 12 months. The high price stems directly from the rise in oil prices in international markets. The price of fuel is set by ENAP, Chile’s state-owned refiner and calculated based on the price of oil in the North American market.

Food registered a 2.3 percent hike in June. The principal increases were for fruits and vegetables (4.8 percent), meat (4.1 percent), milk and eggs (2.6 percent), oil, butter and fats (2.2 percent) and cereals (1.4 percent). Over 12 months, food prices have seen an accumulated increase of 19.5 percent. The rise in food prices—a worldwide phenomenon that is confronting masses of people in Chile and throughout Latin America—means simply that workers are eating less and less. Every day sees food prices mounting and the buying power of workers slashed. The result of this process is less food and more hunger.

Felipe Silva, a researcher for LyD (Libertad y Desarrollo), a pro-free-market think tank, indicated that Chile’s current inflationary situation is not encouraging. “This high inflation is harmful because it causes distortions in the economy and especially for the poorest people, because they are the ones least able to ensure their means of subsistence,” he said.

Silva added that external factors, such as high oil prices and the growing cost of energy, are also contributing to a complex economic picture. “As a result we have a lot of pressure internally and externally on prices which must manifest itself with new increases in the rate of inflation,” he said. The researcher stressed that the cost of “fuel and public transport are going to increase further.” In other words, inflation has returned to stay.

One direct effect of this inflationary process is the lowering of the real wages and increasing indebtedness of the workers. A recent survey published by LyD indicates that 54 percent of Chileans have gone into debt in order to support their families. In comparison to the last such poll in 2007, the share of those in debt had risen by 8 percent. These figures are in line with information released recently by the Central Bank of Chile, which reported a high level of indebtedness among Chilean workers, with 61 percent having contracted commercial debt.

According to a study conducted by professor Sergio Becerra of the School of Engineering at the University Bernardo O’Higgins in Santiago and academic Álvaro Undurraga, 70 percent of the workers in the city of Santiago are dissatisfied with their wages.

“Chileans think their salaries are low, as the cost of living has gone up constantly,” said professor Becerra. As a result of high inflation and falling buying power, the survey revealed that 54 percent of workers expressed the desire to change jobs due to dissatisfaction with their current earnings, which are being whittled down daily by the rise in prices.

Increase in unemployment


It is not only the specter of inflation that is haunting Chilean workers, but also the other inherent byproduct of capitalist production, unemployment. A recent study produced by LyD found that the unemployment rate in Chile rose to 8.9 percent in May. The National Institute of Statistics had already published a report stating that unemployment hit 8 percent in the last quarter. On the other hand, the official figures provided by the Chilean government put the unemployment rate at only 7.6 percent.

The LyD survey produced a rate 1.3 percent above that of the government’s, while the INE’s was 0.4 percent above the official figure. The discrepancy exposes the government’s bid to juggle the numbers in an attempt to mask the depth of the crisis into which the Chilean workers are sinking.

Beyond this, it should be emphasized that among those who are currently employed, fully 30 percent said that they fear losing their jobs and joining the ranks of the reserve army of labor. As to the policies of the government, 65 percent of those surveyed by LyD said that the administration of Socialist Party President Michelle Bachelet has not done enough to reduce unemployment.

Chile’s Central Bank reported Monday that the country’s economy had grown 2.1 percent in May over the same month last year, down from a 4.8 percent growth rate recorded in April. Meanwhile, a survey by the Bloomberg news agency found that growth for the first quarter had fallen to 2.4 percent, compared to 6.5 percent during the same period last year.

Economists attributed a substantial share of the falloff to the curtailment of industrial production by a series of strikes that have shut down copper mines, trucking and other industries as workers are driven into struggle by the high cost of living and the threat of impoverishment.
"

My friends tell me thing are worse than ever as the best land is siezed for exports; people driven off the land into the mountains; profits from supposed economic growth ( read huge price increases )
go overseas.

Some of my family lived in Chile - and they knew a long time ago that the only route forward was sustainable development based on local communities due to the huge transport difficulties.

S.

Stop Violence Against Indigenous Children - UNICEF
By Daniela Estrada

SANTIAGO, Oct 27, 2009 (IPS) - Reports of police violence against Mapuche children in the southern Chilean region of Araucanía prompted the country's UNICEF representative, Gary Stahl, to express the agency's deep concern at a meeting with three government ministers.

Three months ago, several village communities belonging to the Mapuche Territorial Alliance began to "take back" the ancestral lands they claim by illegally occupying private estates in Araucanía, more than 600 kilometres south of Santiago, sparking a string of confrontations with the police.

The Mapuche are the main Amerindian group in Chile, numbering around one million people in a total population of over 16 million.

Acts of vandalism have taken place in Araucanía against public and private property, including setting fire to trucks loaded with logs from local forests. The radical Mapuche organisation Coordinadora Arauco Malleco (CAM) has claimed responsibility for most of these incidents.

"We are calling for a halt to the violence involving children, whichever side is responsible for it," Stahl announced after his meeting with Carolina Tohá, spokeswoman for the government of socialist President Michelle Bachelet, Planning Minister Paula Quintana, and the president's chief of staff José Antonio Viera-Gallo, who is also coordinator of indigenous affairs.

Last week a Mapuche delegation visited the United Nations Children's Fund (UNICEF) headquarters in Santiago to complain about police violence against children and teenagers, which they say is constantly being committed during raids on communities suspected of having had a hand in crimes under investigation by the justice system.

Asked whether the police might be violating the Convention on the Rights of the Child in Araucanía, the UNICEF representative said "some of the accounts we have heard" raise that possibility.

"The problem is that we have not seen any impartial investigation to clarify exactly what has happened," Stahl stressed.

"UNICEF calls on the government and all parties in the conflict to seek to improve the conditions for reporting incidents, because if people are afraid of making a complaint, no investigation is possible. And unless an investigation is carried out, we cannot find out what really happened, and what we have now is completely contradictory reports," he said.

Stahl said UNICEF would work with the government "at a technical level" to establish improved investigation mechanisms for such incidents.

For over two years UNICEF, together with other institutions, has been carrying out training courses on children's rights for Carabineros (militarised police) in Araucanía. "But (we do) not necessarily (train) all the Carabineros who come to the region" as police reinforcements, Stahl said.

Mapuche villagers have reported, for example, that a 14-year-old boy who was collecting herbs for a traditional healer in the village of Rofue was forced onto a police helicopter, taken aloft and threatened with being thrown out unless he confessed to taking part in a land occupation.

The Paris-based International Federation of Human Rights (FIDH) issued a communiqué stating that on Oct. 16 "a large group of police, for as yet unknown reasons, began to fire pellets and tear gas canisters" in a school in Temucuicui, in Araucanía. Several children suffered pellet wounds and had trouble breathing.

Another serious case is that of a 17-year-old Mapuche youth with a badly injured leg, who was wounded by about 100 pellets allegedly fired by Carabineros in the area where the land disputes are raging, on Oct. 20. After being shot he was not seen for a week, nor did he contact health services. At his village he was given up for dead.

However, he reappeared Monday and was taken to the Traumatology Hospital in Santiago, where the damage to his leg was being assessed, according to local press reports. He said that he had been rabbit hunting when he was shot, that he did not know who shot him, and that he had gone into hiding because he was afraid.

These violent incidents prompted a former presidential candidate, Senator Alejandro Navarro of the left-wing Broad Social Movement (MAS), to travel to Buenos Aires Oct. 22 to ask the International Red Cross to send a delegation to the area. They will do so within a few weeks, Navarro said.

After meeting with Stahl Monday, Minister Quintana promised the government "will take all the necessary measures to safeguard the children's physical and psychological safety."

Quintana emphasised the decision of the Carabineros high command to dismiss one of their officers who savagely beat a villager who had already been immobilised, after the Catholic University's TV channel broadcast footage of the incident.

But the tensions are running as high as ever. The Mapuche communities were not satisfied by the Oct. 9 announcement made by Minister Viera-Gallo, who said the government hopes to finalise the purchase of nearly 30,000 hectares of land for 115 Mapuche villages, at a cost of close to 181 million dollars, in 2010.

A huge march took place Oct. 23 in Temuco, the capital of Araucanía, with Mapuche and non-Mapuche alike protesting against the militarisation of the indigenous villages and the excessive force used by police.

In two provinces of Araucanía alone, Malleco and Cautín, some 90 estates are under permanent police protection, according to Sunday's edition of La Tercera, a local newspaper.

To curb the violence, the Bachelet administration has invoked the draconian anti-terrorist law passed by the dictatorship of the late general Augusto Pinochet (1973-1990), a move that has been criticised by several human rights organisations.

Deputy Interior Minister Patricio Rosende confirmed Monday that "worrying items" were found during violent raids on Sunday in a number of villages. Among them were ammunition for M-16 rifles, shotguns and fuses for explosives.

"We think they have been planted for political reasons, not by the ordinary police force but by the intelligence service," said Mijael Carbone, a spokesman for the Mapuche Territorial Alliance.

"What is happening here is a flagrant violation of human rights and of the rights of the Mapuche people," said Fernando Díaz, a Roman Catholic priest who coordinates the Southern Area Mapuche Pastoral Commission of the Chilean bishop's conference.

"(The police) charge into the villages as if they were terrorist hideouts, hitting out right and left and shooting. They are really provoking these communities. The present climate of tension in the communities is the fault of Carabineros and prosecutors who are using disproportionate violence," he said. (END)

Send your comments to the editor

http://www.ipsnews.net/news.asp?idnews=49026

People are deeply concerned over the situation in Chile!

S.

Dread, you are correct to note that Milton was not a strong advocate of counter-cyclical policies. But what I was referring to was his advocacy for Chile to change her economic set-up and use more pro-capitalist policies in moving Chile towards a more open economic scheme. Milton was a strong promoter of Chile and his contributions have had noticeable benefits for Chile. Billions of dollars in foreign investments have poured into Chile as a result. And Chile today is moving towards modernity and maturity that people in DR and similar places can only dream about. The results have enabled Chilean leaders to use counter-cyclical policies to enhance the economy in times of crisis. Something that few Latin States have been able to achieve. That's a significant development.

Achieving Long-Term Fiscal Discipline: A Lesson from Chile
Jan 31st, 2010 by jfrankel |

As Chile’s President Michelle Bachelet prepares to hand over power to her newly elected successor, she remains extraordinarily popular. It is worth reflecting on the fiscal aspects of her term in office, as Chile has important lessons for other countries struggling with fundamental long-term budget problems, which includes a lot of countries right now.

As recently as June 2008, President Bachelet and her Finance Minister, Andres Velasco, had the lowest approval ratings of any President or Finance Minister, respectively, since the return of democracy to Chile. (See graphs below.) There may have been multiple reasons for this, but perhaps the most important was popular resentment that the two had resisted intense pressure to spend the receipts from copper exports, which at the time were soaring along with world copper prices. One year later, in the summer of 2009, the pair had the highest approval ratings of any President and Finance Minister since the return of democracy. Why the change?

It was not due to an improvement in overall economic circumstances: in the meantime the global recession had hit. Copper prices had fallen abruptly. (Chile’s economy is dependent on this metal, which constitutes as much as 3/4 of its exports.) But the government had increased spending sharply, using the assets that it had acquired during the copper boom, and thereby moderating the downturn. Saving for a rainy day made the officials heroes, now that the rainy day had come. Chile has achieved what few commodity-producing developing countries have achieved: a truly countercyclical fiscal policy.


(04 September 2009) Chile's Finance Minister Andrés Velasco offered a conference on "Current Economic Scenario and Actions for the Future" at ECLAC headquarters in Santiago today, highlighting the role of monetary, financial and fiscal countercyclical policies to better address the effects of economic crises.

Velasco was welcomed by the Executive Secretary of the Economic Commission for Latin America and the Caribbean, Alicia Bárcena.

Over 200 representatives of the diplomatic corps, academics and officials of international organizations attended the conference.

In her opening remarks, Bárcena praised the work of Velasco in the Chilean government and his leadership in the international arena, as reflected in the coordination of international forums, such as the Second Meeting of Finance Ministers of the Americas (Viña del Mar, July, 2009).

Bárcena also referred to ECLAC's role in the economic history of Latin America. "In over 60 years, we have developed a genuinely regional body of thought, one that is dynamic and critical and has been able to reflect on itself and renovate," she said.

In his presentation, Velasco stated that Latin America and the Caribbean have been consolidating their capabilities to design countercyclical policies to address eventual crises. In the case of Chile, he said, the measures adopted before and during the present global economic crisis have allowed the country to face the external turbulence better than other countries.

"More than ever, this is the time to apply countercyclical policies -monetary, financial and fiscal," stressed Velasco.

However, he emphasized that these kinds of policies are not created "from one day to another".

"That's why the measures that can be adopted before a crisis are so important. It is in periods of calm and bonanza that countries can build institutions and create rules to address future crises," he asserted.

Among the countercyclical measures taken by his country, Velasco highlighted fiscal savings, diminishing public debt, investing in low-risk instruments and funds, and establishing institutions such as independent central banks and development banks. He stressed the importance of technical criteria in policy-making, monetary flexibility and adequate financial regulations.

Referring to the future, Velasco stated that the crisis is posing enormous challenges, such as the regulation of financial markets, coordinating policies at a global level, and improving the corporate governments of public institutions.

Why does countercyclical monetary policy matter?

By Chatterjee, Satyajit
Publication: Business Review - Federal Reserve Bank of Philadelphia
Date: Sunday, April 1 2001

Modern capitalistic economies use stabilization policies to minimize fluctuations in the unemployment and inflation rates. In the United States, the Federal Open Market Committee (FOMC) lowers the target interest rate for interbank loans as economic activity slows or when a financial crisis looms (as in the fall of 1998) and raises it when inflation threatens to accelerate (as in late 1999 and early 2000).

Such countercyclical monetary policy is one example of a stabilization policy. Other examples of U.S. stabilization policies include the federal insurance of bank deposits (and the concomitant supervision and regulation of banking) and income-maintenance programs, such as unemployment insurance.

Macroeconomists have devoted much effort to understanding how countercyclical monetary policy affects the volatility of the unemployment and inflation rates. In contrast, macroeconomists have directed much less effort to understanding why countercyclical monetary policy is beneficial. This neglect reflects the fact that, until recently, macroeconomists of very different persuasions agreed that policies aimed at reducing the volatility of unemployment and inflation are desirable. Of course, economists disagreed about what form those policies should take, but no one questioned the premise that a less volatile macroeconomic environment was a desirable policy goal.


Building Countercyclical Fiscal Policies in Latin America:
The International Experience.

Mario Gutiérrez

Julio E. Revilla

http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/02/17/000158349_20100217131221/Rendered/PDF/WPS5211.pdf

Given the challenges faced by monetary policy institutions in open economies
subject to high capital mobility, the evidence of globalization has shown that fiscal policy
plays a key role in the attenuation of economic slowdowns and in the stabilization of
market sentiment. In Latin America the history of poor fiscal discipline has prevented
policy makers from using fiscal policy for stabilization goals; and the weakening of
market sentiment and corresponding limitations on access to affordable credit have
required in most instances the adoption of pro-cyclical fiscal policies during economic
downturns. The improvement of fiscal discipline and credibility in fiscal management has
made possible the gradual adoption of countercyclical fiscal stances in some countries in
the region as the cases of Brazil and Chile have shown in the 2000s.

The strengthening of fiscal discipline in certain countries in the region since the
1990s allowed for the generation of substantial public savings and the reduction of public
debt (and the associated country risk), which in turn opened the necessary room for fiscal
stimulus polices during the late 2008-2009 financial crisis. Some governments were able
to avoid cutting expenditures, while others were able to raise expenditures to provide a
boost to domestic demand and GDP (see also Eyzaguirre et. al [2009]). Moreover,
countries that had already adopted more sustainable fiscal policies before the crisis
enjoyed greater fiscal space in which to establish countercyclical fiscal policy stances and
thereby reduce the negative output effects experienced by many countries during 2009;
among the leaders in the use of effective, responsible countercyclical policy were Chile,
Colombia, Mexico, and Peru (see International Monetary Fund [2009]).

Colombia has some of the poorest people in S. America. Economists of this type are quite stupid.
Houses could have been built;agriculture developed. now yes it is possible the rich can buy more cars.
AS Lulu said feeding the poor cannot wait.

16 % of Columbia lives in extreme poverty.

http://colombiareports.com/colombia-news/news/9463-dane-45-of-colombians-live-in-poverty.html


Government claims reduction but really?

Money was sitting in the bank in such countries when they could have bought tractors and paid the very poor to improve the land; increasing food production and to build simple houses.

S.

Colombia has an on-going internal war that has caused her untold harm; both in human lives lost and injured and the lost economic output these lives could have contributed. So in the scheme of things, the Colombian economy has actually performed very well. Hopefully, the Farcs and the other smaller bands are at their death beds and Colombia will finally achieve internal peace. Then watch out! Colombia possess all the elements to be an incredible successful nation-state. You name it and they appear to have it: educated people, tons of valuable resources, etc. The fundamental missing piece is internal peace, and the defeat of the rebel forces is a necessary part of the process.