Two recently released reports by the International Labour Organization (ILO) and the Economic Commission for Latin America and the Caribbean (ECLAC) cite significant job losses and high levels of contraction of regional exports as being among the more serious consequences of the downturn in the global economy.
According to the ILO’s 2009 Annual Report released earlier this week 2.2 million jobs were lost in Latin America and the Caribbean last year, reversing a five-year trend of falling unemployment in the region. The Report says that the downturn had the effect of increasing the overall unemployment rate in Latin America and the Caribbean to 18.1 million and upping urban unemployment in the region to 8.4 per cent last year from 7.5 per cent in 2008.
Regional economic growth dropped to a projected 1.8 per cent last year and despite the ILO’s optimism that recovering demand for commodities like oil and copper in the face of an expected global economic upturn should boost economic growth to 4.1 per cent this year, the Regional Director Jean Maninat is quoted as saying that job creation is likely to lag during the recovery period and that unemployment is likely to continue to hover at around 18 million. In urging regional governments to make employment a central policy issue Maninat declared that the current crisis demonstrates “that the invisible hand of the market is not strong or efficient enough to develop sustainable businesses or to create the employment levels we need.”
Meanwhile, new estimates released by ECLAC indicate that the total value of exports from Latin America and the Caribbean fell by 24 per cent in 2009. According to ECLAC the 24 per cent contraction in the value of the region’s exports represents a combined 15 per cent drop in value and 9 per cent in volume.
According to the ECLAC study a simultaneous decrease in the price and volume of Latin American and Caribbean exports “is unprecedented in recent history” having last occurred in 1937.
Exports from the Caribbean reportedly fell by 29 per cent in the Caribbean last year while exports from Venezuela declined by 42 per cent.
Domestic economic decline last year also forced several countries and sub-regions in the hemisphere to reduce their imports. According to the ECLAC study Caribbean countries cut their imports by 35 per cent while Chile and Mexico reduced imports by 32 per cent and 22 per cent, respectively.
The ECLAC study indicates that in terms of sectors mining and oil exports fared the worst with an average 42.3 per cent between January and September last year while exports of regional manufactured and agricultural and livestock products decreased by 18.4 per cent.
The ECLAC study points to what it says are indications of a measure of economic recovery evidenced during the last quarter of 2009. According to the study while both regional exports and imports diminished continually during last year the reduction was milder during the second half of 2009. The report attributes recovery trends to the partial rise in the prices of several commodities exported by countries in Latin America and the Caribbean including copper, zinc, oil, wheat, soya and the strong demand for regional exports by China as of the second quarter of 2009.
