Latin America and the Rising South

The world economy is not what it used to be twenty years ago. For most of the 20th century, the world economy was characterized by developed (North) countries acting as 'center' to a 'periphery' of developing (South) countries. However, the recent rise of developing economies suggests the need to go beyond this North-South dichotomy. This tectonic re-configuration of the global landscape has brought about significant changes to countries in the Latin America and Caribean (LAC) region. The time is ripe for an in-depth analysis of the dynamics and nature of LAC's external connections.This latest volume in the World Bank Latin American and Caribbean Studies series will focus on the implications of these trends for the economic development of LAC countries. In particular, trade, financial, macroeconomic, and sectoral shifts, as well as labor-market aspects will be systematically analyzed.

This report is an impressive piece of work, very clearly written and bristling with new facts and interpretations. --Barry Eichengreen George C. Pardee and Helen N. Pardee Professor of Economics and Political Science University of California, Berkeley

Between the last decade of the past century and the fi rst decade of this one, the share of the South in the world economy doubled, from 20 to 40 percent of global GDP. This excellent report argues, however, that the gains from such a momentous shift have not been equally shared by all countries in the South. The report highlights, correctly in my view, that long-standing weaknesses of the Latin American and Caribbean region associated with its low savings rates and distorted labor markets are impeding it from fully benefi ting from the rise of the South. The implication is clear: this region of the world needs to go substantially beyond improved macroeconomic management if it wants to avoid being the world economy s laggard in the decades ahead. --Santiago Levy Vice President for Sectors and Knowledge Inter-American Development Bank

This report tackles interesting and important questions for development policy. It identifi es a series of new stylized facts relevant for the connection between trade and growth that should stimulate lots of research. It also helps in moving the debate from does trade cause growth? to what type of trade causes more growth? The second question is of fi rst order importance for development policy. --Andrés Rodríguez-Clare Edward G. and Nancy S. Jordan Professor of Economics University of California, Berkeley