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Latin American Economic Outlook 2008

image of Latin American Economic Outlook 2008
While democratic regimes seem to be firmly rooted in the region, Latin American economies continue to experience sustained economic growth, benefiting from the ongoing process of globalisation. This Latin American Economic Outlook, the first volume in an annual series by the OECD Development Centre, provides original insights and comparative indicators on four key issues affecting Latin America’s development: the impact of fiscal performance on democratic legitimacy; the relevance of pension fund reform and governance for national saving and capital markets deepening; the role market-seeking investments by the private sector can have at improving access to telecommunication services; and growing trade with China and India as an incentive to boost the competitiveness of Latin American countries. Policy recommendations and the identification of best practices in the areas under scrutiny aim to put OECD’s expertise and well-known analytical rigour at the service of Latin America’s development.

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Business for Development

Multinationals, Telecommunications and Development

OECD Development Centre

Since the early 1990s, foreign direct investment has increased dramatically worldwide. Latin America has been a major recipient of such investment, notably in conjunction with privatisation in the region during the 1990s. The emergence of new Latin American multinational corporations means that the region has also become a source of such investment, especially in the 2000s. The importance of both inward and outward foreign direct investment is particularly visible in telecommunications, a sector dominated in Latin America by two multinationals, one from each side of the Atlantic. Many countries in the region have taken great strides in building modern telecommunications infrastructure thanks to the combined effects of technological progress, the spread of mobile telephony and the market-seeking thrust of the leading competitors’ investment behaviour. The strength of a few corporations has, however, given rise to concerns over the nature of competition in the sector. Greatly expanded user access to telecommunications services increases the contribution of this sector to economic growth, but key challenges remain in establishing and ensuring contestable markets that will close international and domestic digital gaps between rich and poor segments of the population and provide telecommunications services to all. Effective access-promotion policies with clear and stable rules are needed together with well-regulated, open and competitive markets that promote innovation and encourage multinational corporations to maximise their collective contribution to the region’s long-term development.

English

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