Reporting from Bogota, Colombia, and Buenos Aires — Facing an economic slowdown after years of brisk growth, Latin American nations from Mexico to Argentina have launched stimulus plans amid fears of recession, rising poverty and social unrest.
Central banks have moved to stabilize currencies, boost employment and bolster consumer confidence in an attempt to limit the fallout from the global economic crisis.
Brazil, the region's largest economy, has pumped tens of billions of dollars into shoring up its currency and once-booming housing and auto sectors, while announcing an additional $3.6 billion in tax cuts last week, along with $10 billion in credit for indebted Brazilian firms.
Mexico, dependent on the flagging U.S. economy, has backed loans to small and medium-size companies.
"We are taking every action to mitigate the negative impact of the global economic situation on our country," President Felipe Calderon declared.
However, the Mexican central bank estimates that gross domestic product could grow less than 0.5% next year, down from an expected 3% rate in 2008. Remittances from people in the United States have been dropping, one indication of how hard times north of the border affect Mexico.
Oil-rich Venezuela, faced with a big drop in crude prices since summer, is contemplating budget reductions that analysts say could throttle the free-spending ways of President Hugo Chavez and heighten opposition to his administration.
Ecuador has also been hurt by falling oil prices. On Friday, President Rafael Correa followed through on his oft-repeated threat to default on his nation's foreign debt, announcing that he would skip a $30.6-million bond interest payment this week. Correa said he was stiffing bondholders not as a result of economic conditions but because the debt taken out by a prior government was "illegitimate."
Even Peru, with one of the hemisphere's fastest-growing economies (thanks largely to mineral exports to China and elsewhere), has unveiled a $3.2-billion stimulus program.
"We all have to respond to the crisis," said Peruvian President Alan Garcia, outlining a wide-ranging package of social spending, infrastructure projects and business credits in a nation whose growth had been cruising along at 9%.
Experts have praised Latin American officials for acting forcefully, but it remains unclear what success they will have. Much will depend on the prospects for a global recovery, analysts say.
