The reform process initiated in Latin America and the Caribbean in the late 1980s has achieved extraordinary progress in opening markets and consolidating democracy throughout the region. Average inflation rates in the region were lower than 11 percent, down from 18 percent in 1996 and 25 percent in 1995. Market opening measures in the region continue at a strong pace and are clearly having a positive effect. And private sector investment is flowing to the Latin American and Caribbean countries at an impressive rate. Businesses see in these trends opportunities for growth and prosperity.
Governments see forces for stability, prosperity, and security.
But still, the results of reform are uneven. Unemployment remains high in Latin America and the Caribbean. In most countries, growth rates are still not sufficient to make a big improvement in poverty rates, and income inequality seems to be growing in many countries. A recent World Bank study concluded that to significantly reduce the number of people living in poverty, the region's economies must grow by more than 6 percent a year. It is clear, however, that the progress in economic reform in Latin America and the Caribbean will not be sustained politically unless its advocates demonstrate concretely that it offers a better life for the Hemisphere's impoverished citizens.