President Arias Meets with Regional Leaders to Discuss Economics.
More than 500 business, academic and political leaders from 46 countries and 7 Latin American presidents are meeting today, April 15, and tomorrow, April 16, 2008, at an economic forum in Cancún, Mexico. The III World Economic Forum in Latin America (a regional version of the World Economic Forum held in Davos, Switzerland) aims to establish strategies that will counteract the impact of the U.S. recession on regional economies and maintain regional growth. This year the forum is looking at the Chinese and European markets as potential allies for Latin America.

The forum’s theme, “Securing a Place in an Uncertain Economic Landscape” captures the focus of the meetings. Organizers have presented the main issue by explaining that average growth in Latin America has held at over 5% for the past 5 years, but the current U.S. recession creates doubts and uncertainty about the region’s future. This recent growth has helped reduce poverty in the region but more is needed. Emilio Lozoya, the regional director of the World Economic Forum, commented that “To continue these positive trends, the region needs to deepen its intercontinental ties and work more on different areas to address the slow regional interaction process”.

Another goal of the forum is to find more equitable ways of distributing wealth in the region. In support of this, Lozoya pointed out that “Latin America is not the poorest region in the world, but it is the most unequal”.

The forum, hosted by Mexico’s President Felipe Calderón (México) will also include other regional presidents including: Alvaro Uribe (Colombia), Elías Antonio Saca (El Salvador), Alvaro Colom (Guatemala), Manuel Zelaya (Honduras), Oscar Arias (Costa Rica), Patrick Manning (Prime Minister of Trinidad y Tobago), and the Vice President of Nicaragua, Jaime Morales.

An example of the dependence the region has on the U.S. market can be seen with Mexico, which has the biggest economy in Latin America with 80% of its exports destined for the United States. Foreseeing the fall in demand due to the recession, they are looking at alternate markets to fill the void.

Although major protests like those seen in the Davos meetings are not expected, the forum has tight security with over 200 police troops and 25 patrol cars. The forum is expected to be peaceful as opposition groups have been invited to actively participate in the forum.

Costa Rica’s Economy

Last week, the International Monetary Fund (IMF) indicated that Costa Rica’s Gross Domestic Product grew 4.1% this year. For 2009, the growth is predicted to decline slightly to 4%. Also, a figure that directly affects us all as goods and services become more expensive, inflation is expected to be 9.5% this year and 7% next year.

The United States’ financial crisis, which started in August of 2007, has become the biggest financial shock to the economy since The Great Depression and is affecting world economic stability too. In light of the current recession the United States is experiencing, it is imperative that Costa Rica establishes strong economic relations with the European Union and Asian markets to lessen its dependence on the U.S.

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Filed under: Business on April 15th, 2008