Module 9 Essay

Name of Student

Name of Professor

Name of Class

Day Month Year

Latin American Financial Markets and Institutions

Faruqee, Hamid; Berhmen, S. Pelin, “Regional Economic Outlook: Seizing the Momentum.” IMF, Apr 2018.

In 2018, Scholars Hamid Faruqee and S. Pelin Berkmen along with many other scholars and under the guidance of Alejandro Werner and Krishna Srinivan developed the regional economic outlook. Within the outlook, scholars focused on the boost or acceleration of global growth within the year 2017. The scholar mainly discussed the progress of America and Canada. They claimed that it was possible that both countries will further accelerate just above their potential. Current growth was indicating that further momentum during 2018-19 will affect the number of elements including balance within the financial condition, the risk of movement towards protectionist policies, and the elimination of trade tensions. The factors that cause this growth include fiscal policy of America, improved strategies for external demand, and risks to the outlook. There are different chapters in which different discussion are made. The progress of America and Canada are discussed in the first chapter. They are followed by administering the Latin America and the Caribbean. While there was a contraction in the progress of both in 2016 but 2017 showed positive growth. The main progress that Latin America and the Caribbean showed was in term of increase in global trade and demand, balanced in the global condition financially, increase in the price of the commodity, and recovery in the private investment domestically. Scholars explained that although a positive growth was noted in 2017, the risks over the growth were not fully eliminated.

The main theme of the article is to highlight the growth factors of America, Canada, Latin America, Caribbean, and South America, Central America, and Mexico along with the discussion of risks that can have a serious impact over the economic condition of the different states and country like Canada. In the case of Latin America and the Caribbean, the risk that will remain include the risk of rigid financial condition globally, changes in the economic partners, increase in the sentiment at home, and domestic elections. The economic growth of both is positive; still, it is less than the other regions. GDP per capita growth rate is very much low as compared to the other regions of the emerging market. In South America growth will remain almost constant while Mexico, Caribbean, and Central America will show some efficient development in the United States of America. The resume growth of South America will be supported by the end of the recession, domestic demand recover, and favorable condition from the external environment. Argentina and Brazil will also be expecting a boost in the economic growth in the next two years. Scholars have represented the present progress and future estimated growth of the regions along with the factors that cause changes and risks. The questions that arise here are what should be the policies and recommendations to solve the risks of the economy. Is it enough to highlight the main risks like an increase in public debt, rigidity in monetary policy, and the issue of inequality of wealth through various tables and statistics? Is there more research needed to provide a solution to the problems? These are some of the questions that arise in my mind after reading the article. The article is useful to gain knowledge about the economic strength and weaknesses of the regions, but it lacks the knowledge about the policies and ideas on which regions are working. The questions that scholar asks in the articles are about the risk factors to the economy. For instance, only Latin America has successfully reduced poverty and inequality rate but what are the implications of the other regions for the issue? Also, the role of monetary and fiscal policy is effective or can it be more efficient?

Dresser, Denise. “Can Mexico Be Saved?” Foreign Affairs, no. September/October 2018.

The article focused on the political condition of Mexico. The author started with the claim that the Mexico’s future seems promising. The election of 2012 gave hope to the people of the country. They have a new sense of hope, purpose, and energy is given to the nation by the young and dashing president "Enrique Pena Nieto." The Institutional Revolutionary party came into power once again after twelve years. The main scholar theme is to discuss the future issues and reforms that the winning party will take into account. The PRI party wants to put the focus on the reinvention and systemizes its own party first. They promised to avoid and eliminate corruption factor from the party as well as from the all country department. The author quoted the press release information of "The Mexican Moment" in which magazine claimed that the new administration can save Mexico by releasing the energy sector to foreign investment, fighting against monopolies, and change in labor law, and eliminating capitalism from the society. Next elections became the victory for Andre Manuel Lopez Obrador. He was the party member of MORENA, i.e., the national regeneration movement. It was not just the failure for PRI, but it's more like punishing the party. The result of the election highlighted the anger and frustration of the people against the increase in corruption and homicide rate. Former administration failed to pursue their promises and goals. This time PRI promised the people to work against the elites and status quo. He was looking forward to bring the change by appealing to a restive population. The author raised the question about the promise that how Lopez Obrador will fulfill his promise that is what will be the implications. The hypothesis developed by the author was the question that whether PRI would really bring the change and become the life saviors for the people of Mexico. Here he presented the answer.

According to the author, Lopez Obrador failed to fulfill his promises. Mexico was facing the same problems from years to years. The main problem was the corruption which weakens the institute of the nation. Even today the problem is unsolved, and there is a high rate of corruption. The other problem is the increase in violation due to the drug-related crime. The administration has failed to control crime and violence from 1929 to 2000. In 1990 the National Action Party (PAN) successfully broke the one-party rule in the country. They defeated PRI, and one of their members won the election. It gave hope to the nation again. They believed that new administration would bring the change that PRI was not delivering, but corruption remains the same. The elite dominated society. New administration just like PRI failed to fulfill their promises. It leads to open the door for PRI again. PRI won the elections and celebrated the victory. It was the continuous failure for the people of Mexico because this time once again PRI enjoyed their power and did not work for the promises that they made. Energy reform became a big failure. The article highlights the political issues that impact the economic, social, and financial progress of Mexico. The article tells us how an administration impacts the whole nation. How political risks are complicated for economic growth. The political parties increase their voters through promises that indicate the problems and issues of the society like in Mexico the main issue is the corruption and inequality but mostly when a political party comes into power , they focus on self-interest more than society and their problems. Also, the public has no other option to put their trust in one of the political party who can solve their issues

The Caribbean, Economic Commission for Latin America and the. A Regional Reserve Fund for Latin America. CEPAL, 2014.

The article analyzes the challenges faces by Brazil, Argentina, Mexico, Paraguay, and Chile due to the expansion in reserve fund of Latin America. The main hypothesis of the article is the regional reserve fund with respect to its implication and viability. The author explained that the reserve fund should be taken as a broad range of tool as it directly affects the monetary policy, balance of payment, and capital movements. It is one of the beneficial mechanism to address the issue of balance of payment difficulties through international financial architecture. The main challenges present in fund governance can be due to the increase in the members. The qualitative, as well as quantitative data concluded that funds like reserve funds do not only focus on the countries member; rather its focus should be broader and international to face the external shocks. The authors defined the two major implication to decide the size or reserve funds. Firstly, the member countries can turn to other available sources to face the constraint of the balance of payment. Therefore size should be smaller to be a lender of last resort. Secondly, to cover the international expansion of the funds do not require large size; rather it needs a reasonable size which can face the most likely ones. The scholars answered their hypothesis that the benefits of reserve funds entirely depend on the balance of payment. If all the countries member faces the balance of payment, it shows the efficiency of reserve funds, but if some countries get the benefit while others do not know, then the condition may lead to the crisis. In case of any crisis due to reserve funds, member countries should leverage their capital for the mobilization of additional resources. In the contribution scenarios, the amount of the reserve funds provided by the two largest economies that are Mexico and Brazil play a vital role. The author recommended that government should play their role. They should expand reserve funds by increasing the member countries and resources. Also, they should not lose the positive attributes during the crisis from other regional or global funds.

The article tells us about the reserve funds and how it financially helps the economy. If the government manages monetary policy effectively, it can help in the surveillance mechanism and efficient decision making. The article is useful to get insights on the relationship of reserve funds with other economic elements like the balance of payment, capital flow, trade, monetary policy, and investment. Through a sufficient and effective use of reserve funds, all members can increase the economic growth of their countries. The question that the author raised was about the size of reserve funds and secondly the implication needed during the crisis due to reserve funds is important to learn. It is well defined that benefits cannot be achieved by simply increasing the size of reserve funds. It is more necessary to achieve more profit out of it equally. Unequal benefits due to balance of payment within some of the economies rather than all can bring the crisis. At this point, largest economies can play the role by expanding their reserves funds and member countries.

Work Cited

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Caribbean, Economic Commission for Latin America and the. A Regional Reserve Fund for Latin America. CEPAL, 2014. www.cepal.org, https://www.cepal.org/en/publications/37018-regional-reserve-fund-latin-america.

Dresser, Denise. “Can Mexico Be Saved?” Foreign Affairs, no. September/October 2018, Aug. 2018. www.foreignaffairs.com, https://www.foreignaffairs.com/articles/americas/2018-08-13/can-mexico-be-saved.

“Regional Economic Outlook: Seizing the Momentum.” IMF, https://www.imf.org/en/Publications/REO/WH/Issues/2018/05/09/wreo0518. Accessed 4 Mar. 2019.