Tackling them needs better education systems and, in some countries, land reform. All this leaves governments with work to do. Besides scarcer foreign finance, continued economic volatility, and high levels of poverty and inequality, there are other difficulties. Latin America has a savings rate that is too low, though higher savings are as much a consequence as a cause of growth. Second, Mexico and Chile apart, the region's export performance has been disappointing.
Many countries still rely on a handful of commodity exports, whose prices lurch up and down.
First, fiscal policy needs to be tighter, to boost savings and to allow higher social spending when recession strikes. Second, banking supervision needs to be stricter, especially in the weaker economies. All the Andean countries saw credit bubbles in the mid-1990s, followed by bank failures of varying severity. While guarding against such risks, capital markets also need to be deepened and corporate governance improved if businesses, especially small and medium ones, are to get the capital they need. And governments need to sweep away the red tape that stifles enterprise.