Home' Trinidad and Tobago Guardian : December 28th 2014 Contents DECEMBER 28 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
2014 YEAR IN REVIEW | SBG15
For Latin America, 2014 did
not turn out as well as we
envisioned. We expected
that a Latin American nation
would win the World Cup,
bringing the trophy back to
the Americas and, more seriously, that the
region s economic growth would continue
on a steady, albeit slower, pace.
According to our latest forecasts, the
region will grow barely 1.0 per cent this
year. Considering population growth, this
means the average per capita income of
Latin Americans did not progress in the
past 12 months.
Growth won t come easy. A commod-
ity-fueled expansion such as the one expe-
rienced by South America in the past decade
is unlikely to return with reduced global
demand for its production, particularly
from China. And if this were not enough,
the cost of financing development will probably rise in the
years ahead as United States monetary policy changes course.
The historic social gains achieved in the region in the past
decade are at risk. Latin America will have to turn to its own
devices in order to return to the path of growth with equity
that made those gains possible.
This challenge puts significant pressure on public coffers.
Thus a new premium will be placed on policies that can boost
growth while keeping the focus on the poor. And when it
comes to public investments that can do both at once, few
come to mind as easily as education. On the one hand, a
country with improved human capital can become more pro-
ductive and grow at a faster pace. On the other, a population
with better education can find better opportunities in life,
and break the cycle of poverty that is too often perpetuated
In a region where access to education up to secondary level
is close to universal, the central challenge now is quality. And
to raise the quality, what goes on inside the classroom, or
more to the point, the skills of those in charge of teaching,
Every week, however, due to teacher absenteeism, low skill
level and pay, as well as weak school leadership, public school
students in Latin America and the Caribbean are deprived of
the equivalent of one full day of class. That is one of the key
findings of this year s groundbreaking World Bank report,
Great Teachers: How to Raise Student Learning in Latin
America and the Caribbean.
Another key finding that stands out
is that individuals entering teaching
careers in Latin America are academ-
ically weaker than the overall pool of
students in higher education. In Sin-
gapore and Finland, teachers come
from the top third of students. And
this brings me to making teachers
Latin America is known for its
world-class superstars, be they writers,
soccer stars or artists. Shakira for
instance is admired for her music and
talent, but also for her years of ded-
ication to improving the lives of poor
children in Latin America. There is no
question that the Colombian singer
and songwriter deserves all the atten-
tion and praise she gets, but the region
could benefit from having teachers
who are admired half as much as music
That s easier said than done, many will say. But it is not
impossible. It requires, above all, a serious dose of political
In the 1970s, for instance, Finland made raising the bar for
teacher hiring a cornerstone of an education reform strategy.
Finland used to have an education labor market very similar
to Latin America with many teacher training institutions of
variable quality producing an excessive number of teachers.
Over several decades the country managed to change it to one
where a much smaller number of high quality institutions
produce just enough talented teachers, all of whom find
teaching positions and enjoy high social prestige (as well as
There is a growing consensus that the long-term growth
path for Latin American economies has to be paved with pro-
ductivity. This largely means investing in more skill-intensive
industries that more competitively insert the region in global
value chains to produce more growth by learning about new
technologies and management practices. This transformation
will require a skilled labor force, and education quality has
to improve first. To avoid the risk of widening income gaps
in the process of becoming more productive, quality education
cannot be limited to the lucky few.
Jorge Familiar is the World Bank's vice president for
Latin America and the Caribbean @Familiar_BM
Educational quality key to boost
Latam's growth and keep social gains
While the US economy grew from July through September
at the fastest pace in more than a decade, some other major
economies have been struggling.
Europe is straining just to grow. So is Brazil. Japan has slid
into recession. China is trying to manage a slowdown. Russia
foresees a recession next year. Meanwhile, the US economy
accelerated at a robust 5.0 per cent annual rate last quarter.
The United States has benefited from aggressive easy-money
policies by the Federal Reserve, a banking system that rebounded
from the 2008 financial crisis, solid consumer spending in
areas like autos and a roaring stock market that has left many
Americans feeling wealthier and more willing to spend.
Here s how other major economies stack up with the United
States. The figures, compiled by RBC Global Asset Management,
show third-quarter growth at an annual rate:
Up 0.6 per cent. The economy of the 18 countries that use
the euro currency is struggling to expand. Inflation remains
alarmingly weak at 0.3 per cent, and unemployment is high
at 11.5 per cent.
Down 1.9 per cent. The economy has tumbled back into
recession despite easy-money policies by the Bank of Japan
and aggressive spending by the government of Prime Minister
Shinzo Abe. A sales tax increase in April iced what had looked
like a strengthening recovery.
Up 1.1 per cent. The economy grew faster than expected
from July through September, helped by increased government
spending and stronger exports. Still, unemployment is stuck
at a high 10.5 per cent.
Up 0.3 per cent. One of the developed world s largest
economies has slowed sharply the past two years as the entire
European economy sputtered. In the July-September period,
Germany managed to dodge a recession, helped by stronger-
than-expected consumer spending.
Down 0.6 per cent. One of the weakest of the 18 countries
in the eurozone, Italy has been burdened by high debt and
unemployment. Standard & Poor s this month slashed the
country s credit rating to one notch above "junk" status.
Up 0.1 per cent. The economy, which is expected to slide
into recession, has been hammered by falling oil prices and
by Western sanctions meant to punish Russia for its takeover
of Crimea and assistance to rebels in eastern Ukraine.
Up 0.3 per cent. The economy pulled out of recession in
the July-September period, but just barely. Busier factories
helped snap two straight quarters of negative growth.
--- United kingdom
Up 2.7 per cent. Consumer spending has driven growth,
but paltry wage increases have raised doubts about whether
the spending is sustainable.
Up 8.1 per cent. The economic growth looks impressive---
until you look at its recent history. For much of the 2000s,
the Chinese economy registered double-digit annual growth.
Beijing is trying to engineer a delicate transition from over-
reliance on exports and investments in factories, roads and
real estate to sturdier but slower growth based on spending
by Chinese consumers.
Up 2.8 per cent. Canadian factories were busier in the third
quarter, and home-building was strong. Oil production rose,
though the energy boom likely won t last given the collapse
in world oil prices. AP
How other economies are
struggling as US shines
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