SANTIAGO: International Monetary Fund chief Christine Lagarde said that Latin America needs to simplify its complex web of regional customs unions and trade blocs in order to boost economic growth.
“The proliferation of trade groupings, such as MERCOSUR, ALBA, UNASUR and SICA, has created a spaghetti bowl of regimes and preferences whose aggregate benefits are unclear,” said Lagarde at the opening of a regional economic conference. “Policymakers should reassess the current approach to trade and create new ways to integrate the region,” she added, calling on policymakers to “rejuvenate” trade integration.
Latin America’s patchwork approach to integrating the region’s economies has produced numerous, sometimes overlapping blocs.
MERCOSUR (the South American Common Market) groups Brazil, Argentina, Venezuela, Uruguay and Paraguay.
ALBA (the Bolivarian Alliance for the Peoples of Our America) is a leftist regional bloc that groups Venezuela, Bolivia, Ecuador, Nicaragua, Cuba, Antigua and Barbuda, Dominica, Saint Lucia, and Saint Vincent and the Grenadines.
UNASUR (the Union of South American Nations) is a pan-South American political bloc.
And SICA (the Central American Integration System) groups the seven Central American countries plus the Dominican Republic. The more than one dozen blocs in the region also include the four-member Andean Community of Nations (CAN), the 15-member Caribbean Community (CARICOM) and the Latin American Integration Association (ALADI), which acts as an umbrella group of regional bodies.
The two-day conference in the Chilean capital Santiago is focused on reviving economic growth and reducing inequality in Latin America, whose economies are facing a slowdown after a so-called “golden decade” of growth fueled by high commodities prices.
In its latest forecast, the IMF estimated that the GDP of the region would grow by only 1.4 percent in 2014, the slowest growth since 2009. The body projects 2.2 percent growth in 2015. AFP
