Latin America calls on its political leaders to buck up
The major theme to emerge over the past year is the demand of the region’s growing middle class for better governance and improved public services in return for their hard-earned tax dollars. These demands have erupted at a time of slowing economic growth and the end of the decade-long commodities dividend that gave a massive spurt to the region and stimulated a major consumer boom in countries like Brazil. This new ‘economic miracle’ allowed sitting governments to delay implementation of the complicated and politically-sensitive structural re- forms still pending in several countries — tax and labour market reforms in Brazil for example — that could help set the foundations for stronger and more sustainable growth over the medium term and reduce the region’s vulnerability to the boom-bust commodity cycle. But governments also failed to use the commodities dividend to invest sufficiently in basic public services – education, healthcare, transport infrastructure etc, with the result that in many cases they have simply collapsed under the weight of the increased pressure on them.