Unnamed: 0
int64
0
1.66k
text
stringlengths
76
552
0
<s>[INST] ___ Document 2 of 400 The Americas: Successful Latin economies show the [/INST] gain before the pain Author: Malpass, David Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 29 Jan 1993: PAGE A15. </s>
1
<s>[INST] accountid=28034 Abstract: David Malpass points out that Latin American politicians who have [/INST] raised gasoline and consumption taxes and cut government subsidies merely to reduce their budget deficits have failed both politically and economically. </s>
2
<s>[INST] However, he says liberalized fiscal policies built [/INST] on a solid currency have engendered public support and achieved lasting change. </s>
3
<s>[INST] take note: Latin politicians who have raised gasoline and consumption [/INST] taxes and cut government subsidies merely to reduce their budget deficits have failed both politically and economically. </s>
4
<s>[INST] However, when Latin leaders unleash the growth potential of all levels [/INST] of the economy through liberalized fiscal policies built on a solid currency, they get public support and achieve lasting change. </s>
5
<s>[INST] Like the incoming administration, Latin America [/INST] is seeking a sweeping change in its political economy. </s>
6
<s>[INST] In a very short period of time, Latin America [/INST] adopted democracy as its preferred form of government, and market-based economics as its preferred economic system. </s>
7
<s>[INST] In countries such as Mexico, Argentina, El Salvador and Chile, [/INST] governments promoted policies that led to an almost immediate improvement in the growth potential of the average citizen. </s>
8
<s>[INST] However, in Venezuela, Ecuador, Brazil, Nicaragua and others, the consensus movement toward a [/INST] market-oriented economy was slowed by leaders who focused on deficit reduction without first declaring a program designed to improve the people's economic situation. </s>
9
<s>[INST] Most of Latin America's unsuccessful attempts at [/INST] economic change rely on austerity -- the "no pain, no gain" recipe. </s>
10
<s>[INST] In this recipe, "courageous" politicians use up their [/INST] political capital getting their people to accept economic slowdown, tax increases and public sector layoffs. </s>
11
<s>[INST] It's hard enough to sell that message in developed countries like the [/INST] U.S., but in poor Latin countries -- where mere survival is a challenge for most -- it can be a political death sentence. </s>
12
<s>[INST] Leaders who promote these policies are left [/INST] with political instability, a deep recession and higher, not lower, deficits. </s>
13
<s>[INST] Nevertheless, many economists laud this policy of impoverishment, and [/INST] urge Latin politicians to "stay the course" as their popularity erodes and per capita incomes sink further. </s>
14
<s>[INST] The examples build a clear case that [/INST] deficit reduction must be kept in the context of improved living standards. </s>
15
<s>[INST] While deficits do impede growth and should be reduced, [/INST] sound deficit reduction programs must be built on creating an environment for private sector growth. </s>
16
<s>[INST] When President Carlos Salinas set about revolutionizing the [/INST] Mexican economy, he first promised, and achieved, economic stability and the prospect of rapid growth. </s>
17
<s>[INST] Taxes on production, capital formation, [/INST] international trade and internal commerce were radically reduced. </s>
18
<s>[INST] Almost immediately, the economy began [/INST] to expand and tax revenues increased rapidly. </s>
19
<s>[INST] This gave government the revenue it needed to pursue far-reaching [/INST] efforts at modernizing Mexico's infrastructure and reaching out to the most impoverished (most notably through the multibillion-dollar Solidarity program). </s>
20
<s>[INST] The expanding economy and increased social spending gave President Salinas the [/INST] popularity he needed to enter into a trade agreement with the U.S., embark on agricultural reform and sell off state enterprises. </s>
21
<s>[INST] Only after the fruits of this growth strategy [/INST] were harvested was significant revenue allocated to retire Mexico's internal and external debts. </s>
22
<s>[INST] If Mexico's original policy objective had been merely [/INST] deficit reduction, rather than improved living standards, these radical changes might never have occurred. </s>
23
<s>[INST] Similarly, Argentina's budget deficit has fallen sharply not because the government [/INST] imposed deficit reduction and austerity on its people but because it imposed a sound currency and very rapid growth. </s>
24
<s>[INST] A report in the Financial Times earlier this month claimed [/INST] that "virtual elimination of the budget deficit has already cut inflation to less than 20% a year". </s>
25
<s>[INST] But Argentina's budget-balancing revenue surge began in April 1991, just after it embarked on its growth policy [/INST] based on a sound, freely exchangeable currency combined with dramatic fiscal incentives for growth (income tax rates were lowered to 20% on incomes up to $60,000 with no tax on capital gains). </s>
26
<s>[INST] Argentina's treasury income rose from under $400 million monthly between [/INST] January and March 1991 to $618 million in April and nearly $1 billion per month in 1992. </s>
27
<s>[INST] In the meantime, Argentina's rapid growth began almost precisely [/INST] in April 1991, the result of a stabilization program reliant on growth, not on economic contraction. </s>
28
<s>[INST] In contrast, Brazil has spent nearly three [/INST] years blindly pursuing deficit reduction while its economy continues to sink. </s>
29
<s>[INST] Brazil's January 1992 standby arrangement with the IMF [/INST] agreed on another vigorous attack on the deficit as the primary thrust of economic reform. </s>
30
<s>[INST] The Economic Commission on Latin America noted in its September 1992 report that [/INST] "Brazil's federal government cut back sharply on expenditure in response to a decrease in its revenues, and managed to generate a surplus as a result". </s>
31
<s>[INST] Of course, during this attack on the deficit, [/INST] the government was printing so much money that inflation stayed above 20% a month. </s>
32
<s>[INST] 6 editorial in the Financial Times claimed modestly that [/INST] "although he may not realise it, fiscal reform should be Brazil's new President Itamar Franco's priority. </s>
33
<s>[INST] Only through such reform will the budget [/INST] deficit be closed, inflation subdued, interest rates lowered and confidence restored". </s>
34
<s>[INST] No mention of the importance of monetary policy [/INST] in fueling inflation or of reducing subsidized credit to farmers, states and state enterprises. </s>
35
<s>[INST] In Venezuela, Peru and Ecuador, government-led austerity programs -- the blind pursuit of deficit [/INST] reduction with little regard to growth -- has brought falling political fortunes, economic hardships on the people, and a faltering desire to continue with economic change. </s>
36
<s>[INST] Peru's real GDP may have fallen as much as [/INST] 3% in 1992 with inflation still above 40% in spite of a "successful" deficit reduction effort. </s>
37
<s>[INST] Ecuador's new president entered [/INST] office last August with 90% public approval. </s>
38
<s>[INST] He immediately set bout fixating on his [/INST] government's too-high deficit by increasing gasoline taxes and devaluing the currency. </s>
39
<s>[INST] His popularity plummeted, much-needed economic [/INST] reform plans were shelved, and growth remained stagnant. </s>
40
<s>[INST] Before the new U.S. administration turns the helm point [/INST] blank at deficit reduction, it should tell the average American exactly what the benefit will be. </s>
41
<s>[INST] Above all, countries end up with smaller deficits [/INST] when their economies expand, not when they contract, so deficit reduction measures should promote growth. </s>
42
<s>[INST] --- Mr. Malpass was deputy assistant [/INST] secretary of state for Latin America during the Bush Administration. </s>
43
<s>[INST] (See related letter: "Letters to the [/INST] Editor: Deficit Cutting Plans Not Always Monsters" -- WSJ Feb. </s>
44
<s>[INST] ___ Document 6 of 400 Free-Market Model: Chile's Economy Roars As Exports Take Off In Post-Pinochet Era --- `Latin America's [/INST] Tiger' Now Goes After the Next Step: Free Trade With the U.S. --- Leaving Third World Behind Author: By Thomas Kamm Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 25 Jan 1993: PAGE A1. </s>
45
<s>[INST] accountid=28034 Abstract: BUIN, Chile -- Perched atop a hill in Chile's rolling [/INST] wine valley, Raimundo Valenzuela surveys the landscape like a conquistador as he tries to bring to life the architect's blueprint he's clutching. </s>
46
<s>[INST] "Here, we'll build a [/INST] chateau," he says, pointing to a clearing. </s>
47
<s>[INST] And here," he says, pointing to two large holes [/INST] dug into the ground, "we're building cellars, one for stainless-steel vats and one for oak barrels". </s>
48
<s>[INST] So is the rest of [/INST] Chile, a small country with big ambitions. </s>
49
<s>[INST] While attention has focused on the transformation of Mexico and the rebirth of Argentina, Chile has Latin America's most vibrant economy, [/INST] so successful that an Argentine business magazine recently ran a cover story titled "Chile Inc." And while the industrialized world frets about recession and Latin America worries about debt and inflation, the talk here is of leaving the Third World behind. </s>
50
<s>[INST] And the next place it wants its roar to be heard is the U.S. Having been told by [/INST] George Bush that it would be next after Mexico for a free-trade agreement, Chile wants to hold President Clinton to this, turning Chile into an important test of the new administration's policy toward Latin America. </s>
51
<s>[INST] By reaching a free-trade agreement with Chile, analysts say, the Clinton [/INST] administration could provide a strong incentive for Latin American countries to continue along the path of democracy and the free market. </s>
52
<s>[INST] Full text: BUIN, Chile -- Perched atop a hill in Chile's rolling [/INST] wine valley, Raimundo Valenzuela surveys the landscape like a conquistador as he tries to bring to life the architect's blueprint he's clutching. </s>
53
<s>[INST] "Here, we'll build a [/INST] chateau," he says, pointing to a clearing. </s>
54
<s>[INST] And here," he says, pointing to two large holes [/INST] dug into the ground, "we're building cellars, one for stainless-steel vats and one for oak barrels". </s>
55
<s>[INST] Mr. Valenzuela is general manager of winemaker Vina Santa Rita, and the blueprint is [/INST] the $4 million plan for Vina Carmen, a unit Santa Rita plans to spin off, float on the stock market and turn into a big exporter. </s>
56
<s>[INST] The new winery is part of a $27 million expansion plan [/INST] to turn Santa Rita and its affiliates into a world-wide competitor and turn the sleepy valley into a tourist attraction. </s>
57
<s>[INST] So is the rest of [/INST] Chile, a small country with big ambitions. </s>
58
<s>[INST] While attention has focused on the transformation of Mexico and the rebirth of Argentina, Chile has Latin America's most vibrant economy, [/INST] so successful that an Argentine business magazine recently ran a cover story titled "Chile Inc." And while the industrialized world frets about recession and Latin America worries about debt and inflation, the talk here is of leaving the Third World behind. </s>
59
<s>[INST] "Chile has the best opportunity in Latin America to be [/INST] the first country to defeat poverty and underdevelopment," says Felipe Larrain, an economist at the Catholic University of Chile. </s>
60
<s>[INST] Indeed, Chile is quietly completing what [/INST] is perhaps one of the world's most profound economic transformations. </s>
61
<s>[INST] The first Latin American nation to [/INST] undertake structural reforms, it is now savoring the fruits. </s>
62
<s>[INST] Its economy grew by 9.7% in 1992, and the boom is so visible that [/INST] an investment banker named Mario Lobo has a game going in his office to see who can count the most construction cranes in the neighborhood. </s>
63
<s>[INST] Chilean companies, many of them privatized in the past decade, [/INST] are in turn snapping up assets in neighboring Argentina as it sells off a host of state companies. </s>
64
<s>[INST] Exports are surging, and Chile runs [/INST] a large surplus with Japan, which is its leading trade partner. </s>
65
<s>[INST] Chile recently became the first in Latin America to receive an [/INST] investment-grade rating on their debt from Standard & Poor's, and foreign investment rose 22% to $1.38 billion last year. </s>
66
<s>[INST] "Chile," says Brazilian banker Igor Cornelsen [/INST] with a touch of envy, "is becoming Latin America's tiger". </s>
67
<s>[INST] And the next place it wants its roar to be heard is the U.S. Having been told by [/INST] George Bush that it would be next after Mexico for a free-trade agreement, Chile wants to hold President Clinton to this, turning Chile into an important test of the new administration's policy toward Latin America. </s>
68
<s>[INST] By reaching a free-trade agreement with Chile, analysts say, the Clinton [/INST] administration could provide a strong incentive for Latin American countries to continue along the path of democracy and the free market. </s>
69
<s>[INST] "Chile's biggest selling point is [/INST] its demonstration effect," says David Gallagher, a Santiago consultant. </s>
70
<s>[INST] "It's in the interest of the [/INST] U.S. that there be some developed country in Latin America. </s>
71
<s>[INST] Then, other Latin American presidents will [/INST] have to explain why they don't perform like Chile". </s>
72
<s>[INST] President Clinton in November expressed interest [/INST] in reaching a trade agreement with Chile, although negotiations haven't begun. </s>
73
<s>[INST] Its economic success was overshadowed by [/INST] the political horror story of the dictatorship of Gen. </s>
74
<s>[INST] Augusto Pinochet, whose 17-year rule was marked [/INST] by massive human-rights violations, including at least 2,025 deaths or disappearances. </s>
75
<s>[INST] But President Patricio Aylwin, confounding predictions that his democratic election [/INST] in 1989 would lead to a wave of populism, has stayed the course of austerity and economic reform. </s>
76
<s>[INST] Suddenly, Chile switched from pariah to model, attracting many [/INST] Latin Americans and Eastern Europeans for crash courses on how to combine democracy and free markets. </s>
77
<s>[INST] "It's clear now that the rejection [/INST] of Pinochet isn't the rejection of the economic model". </s>
78
<s>[INST] That model has led to results so remarkable that some here joke [/INST] that if the U.S. and Chile reach a free-trade accord, the first thing Chile should export is a team of economists. </s>
79
<s>[INST] "We're sitting in an economy [/INST] that's like `Pinch me, is it real? </s>
80
<s>[INST] Its economic indicators are certainly un-Latin: 1992 marked the ninth consecutive [/INST] year of growth, and the gross domestic product has more than doubled in two decades to $36 billion last year. </s>
81
<s>[INST] Though there's a lot of underemployment, the unemployment rate has [/INST] fallen to 4.8% of the work force, and some businesses complain of a shortage of skilled labor. </s>
82
<s>[INST] Chile expects to post a 1992 trade surplus of [/INST] $680 million, a sharp drop from 1991's $1.5 billion, but exports are continuing to grow. </s>
83
<s>[INST] "Some people say we're growing [/INST] too fast," says Finance Minister Alejandro Foxley. </s>
84
<s>[INST] "My worries are much less [/INST] important when I look at the fundamentals. </s>
85
<s>[INST] Urban poverty is less shocking than in Brazil, Peru [/INST] or Venezuela, but it's estimated that about a third of Chile's 13.4 million inhabitants live in poverty. </s>
86
<s>[INST] "There are several, unequal Chiles," says [/INST] Aristides Torche, an economics professor at the Catholic University. </s>
87
<s>[INST] "Quality of life has improved [/INST] even for the poor, but they remain poor". </s>
88
<s>[INST] In addition, Chile's infrastructure is in [/INST] bad shape, and economists expect bottlenecks shortly if rapid growth continues. </s>
89
<s>[INST] Indexing of wages and such things as loan [/INST] balances to inflation makes it hard to cut the inflation rate to one digit. </s>
90
<s>[INST] And Chile's very success contains the seeds of potential trouble: The influx of [/INST] foreign capital has been such that it threatens to overvalue the peso and thus make exports, the engine of Chile's growth, less competitive in price. </s>
91
<s>[INST] But most agree that Chile's problems [/INST] are the sort that its neighbors would like to have. </s>
92
<s>[INST] And to neighbors currently in the throes [/INST] of reform, Chile's case shows how sticking to painful measures can yield rewards. </s>
93
<s>[INST] "It's far away, has [/INST] no technology, its debt-to-GDP ratio was huge. </s>
94
<s>[INST] Chile's story, says Roberto Fantuzzi, general manager [/INST] of a kitchenware company bearing his name, could be called "Death and resurrection". </s>
95
<s>[INST] He speaks from experience, because his company is a [/INST] microcosm of Chile's wrenching metamorphosis from an inward-looking, socialist economy to an export-oriented, capitalist one. </s>
96
<s>[INST] In the chaotic days of Salvador Allende's Marxist government, which ruled from 1970 to [/INST] 1973 and was marked by fourdigit inflation and daily demonstrations against shortages of basic necessities, Fantuzzi was taken over by its workers, its owners expelled without indemnity. </s>
97
<s>[INST] "We lost everything, 50 years [/INST] of work," says the burly, 60-year-old Mr. Fantuzzi. </s>
98
<s>[INST] When Mr. Allende was overthrown in [/INST] a bloody military coup in 1973, the pendulum swung back hard. </s>
99
<s>[INST] But it also adopted austerity measures that [/INST] so reduced demand that Fantuzzi simply closed its plant for three months. </s>

No dataset card yet

Downloads last month
3