Kruse Kronicle

Latin America’s middle class grows, but in some regions more than others

Pew Research: Latin America’s middle class grows, but in some regions more than others

Three interesting graphs:

A secular Latin America?

Christian Century: A secular Latin America?

In recent months, observers have remarked on the growing number of Americans who claim no religious affiliation (the “nones”), whose numbers are highest among the young. We can argue about just what these numbers mean, but possibly they do mark the beginning of a secularizing trend, a drift toward European conditions. Surprisingly perhaps, given our customary assumptions about Latin America, conditions in several Latin American nations mirror those in the U.S. Increasingly these countries are developing a European coloring. ...

... Whatever the causes, the European experience indicates that countries where the fertility rate falls well below replacement (2.1 children per woman) might be facing rapid secularization.

With that figure in mind, let’s look at the countries of Latin America, and especially the most economically developed ones. A few decades ago, all had classic Third World population profiles and very large families. In the 1960s, for instance, Brazil’s fertility rate hovered around 6 children per woman, alarming those who warned of a global population explosion. By 2012, though, Brazil’s figure was 1.82, far below replacement level. Chile and Uruguay both record similar rates of 1.87. Argentina is still above replacement, but the rate is falling fast. That’s a social revolution in progress—as well as a gender revolution.

In religious terms, these countries present a complex picture, with strong evidence of a continuing passion for religion. Brazil is home to some spectacularly successful Pentecostal megachurches, which Catholic clergy seek to imitate in order to hold on to believers. New evangelical churches are also booming in the other Latin nations, to the point that Protestants claim to be living through a new Reformation.

At the same time, though, signs of secularization appear that would have been unthinkable not long ago. Nine percent of Brazilians now say they follow no religion, and the proportion of nones is much higher among those under 20. Uruguay emerges as the region’s most secular country, with 40 percent having no religious affiliation. ...

Saturday Links

(Like the Kruse Kronicle at Facebook if you want links to daily posts to appear in your Facebook feed.)

I hope you had a great Christmas and are enjoying the holidays.

1. The Huffington Post offers their top religion stories of 2012: 2012 Religion Stories: The Top 10

2. David Gushee reflects on Glen Stassen's A Thicker Jesus: Incarnational Discipleship in a Secular Age: The illnesses of American Christianity

"... The first kind of Christianity avoids reactionary authoritarianism but is often a therapeutic or vanilla mush that fails to ask anything of anybody out of fear of giving offense. The second kind of Christianity offers stern, clear moral directives that attract people seeking the “specific instruction, even confrontation that calls us to grow in discipleship” (p. 6), but disastrously embraces right-wing ideology and baptizes that as the content of Christianity.

Both of these versions of Christianity are so deeply flawed, says Stassen, that both are contributing to the alarming spread of secularism in the U.S. The first version of Christianity is so thin as to lack any particular reason why one would want to get out of bed on Sunday and go to church; the second is so reactionary as to drive thoughtful people into an anti-religious posture if they conclude that religion equals right-wing authoritarianism.

I believe this is a stark but actually quite accurate depiction of the primary problems afflicting the Protestantisms of the left and of the right in the current U.S. setting. ..."

3. When New England Progressives Won't Tolerate Evangelicals. "Once a center of 19th-century evangelism, Northfield, Mass., is unsettled by the prospect of a school with religious aims."

4. Peter Enns with yet another provocative post: What do Turkey, Bethlehem, and Tennessee Have in Common? They Don’t Bode Well for the Conservative Christian Subculture

5. Peter Liethart offers a book review of Peter Brown's new book, Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 Ad, at Christianity Today: How the Early Church Made Peace with Prosperity. (And, no, I don't know why everyone seems to be Peter this week ... Enns, Liethart, and Brown.)

6. Why Latin Americans top the happiness rankings

"While not exclusive to Latin America, the culture of family, support, and living a life to spend time with your family, I think, is an important part of Latin American culture that keeps people positive. Being with those close to you and finding other friends and partners that value that way of life is a key part of Latin American culture. That might be the main reason why people remain positive: they are never truly alone. Interestingly, many discussions and documentaries about immigrant groups in the United States show an internal conflict among many who move to the US and who do not wish to lose their support systems in a new culture rooted in individualism. While being motivated and entrepreneurial is valued, a life being with your family, where you are never truly alone, is the basis for many cultures in many parts of the world. Many new Americans frown on the thought that children can detach themselves from their family at 18 years of age. They believe people can only truly thrive as a family."

7. In contrast to Latin American happiness based in family connection is this survey of British children that revealed that A 'dad' is tenth most popular Christmas list request for children.

8. Christian Science Monitor reports on Parental leave global comparison: US still among least generous

9. And in yet another story on familial collections China orders children to visit their elderly parents.

10. Scientific American reports some positive news: Early Childhood Obesity Rates Might Be Slowing Nation-Wide

11. Men may want to think twice before taking up yoga. It seems men are more prone to serious injury from yoga. Wounded Warrior Pose

12. What are the ten most popular books of all time? The 10 Most Read Books In The World

13. Traditional Books On Decline, Survey Says

"A Pew Internet Research Center survey released Thursday found that the percentage of Americans aged 16 and older who read an e-book grew from 16 percent in 2011 to 23 percent this year. Readers of traditional books dropped from 72 percent to 67 percent. Overall, those reading books of any kind dropped from 78 percent to 75 percent, a shift Pew called statistically insignificant."

14. Here are nine interesting findings about state by state data from the Census Bureau: Here Are The States Where People Are Leaving, Moving To, And Having Lots Of Babies

• Puerto Rico, Vermont, and Rhode Island are the only states (and territory) that saw a net decrease in population over the year.
• The fastest growing region was the South (1.06% population growth) followed by the West (1.03% population growth).
• North Dakota and the District of Columbia had the highest population growth, with 2.5% and 2.3% population growth, respectively. Texas, Wyoming, and Utah also saw major growth.
• West Virginia and Maine are the only two states where people are dying faster than they are being born, with 0.93 and 0.99 births for each death.
• Utah (3.44) and Alaska (3.33) had the highest birth to death ratio in 2012. That means 3.44 babies were born for each death in Utah.
• Domestic migration determines the rate that people leave and enter states to and from other states. Per capita, more natives left New York, Illinois, New Jersey, Connecticut and Rhode Island to move somewhere else than any other states.
• On the other hand, people flocked to North Dakota, D.C., Wyoming and South Carolina.
• The states that had the highest rates of international migration — that is, the rate of immigrants coming in — were Hawaii, New Jersey, Florida, New York and D.C.
• Puerto Rico is seeing a massive exodus — 1% of their population left last year.

15. When we think of transportation in the United States, few of us think about river and costal water transportation. Yet a great many goods and commodities are shipped on our rivers. The Midwest drought is having an impact on a major artery of that transportation network. The Mississippi River's Water Levels Are Dropping, And Could Shut Down Trade Next Week

16. Facebook?! Twitter?! Instagram?! We Did That 40 Years Ago. "Three decades before Yelp and Craigslist, there was the Community Memory Terminal. ..."

 

 17. America's Stuff Is Getting Really Old, And That's Bullish

"In other words, Americans are increasingly likely to have to purchase and replace these goods some time soon as they get more and more worn out.  That's bullish for spending, jobs, and the economy as a whole."

18.From right here in my hometown, just a mile or two from where I live: In a Kansas City Neighborhood, Deep Investments and an Uncertain Future. The Atlantic Cities reports on Kansas City's experiments with Green Impact Zones.

19. Why are men, in aggregate, better navigators than women? National Geographic: Of Men, Navigation, and Zits

"... Yet a few differences between the sexes do seem to hold up to scrutiny. One is spatial abilities. If men look at an object, for example, they are slightly faster at guessing what it would look like if it were rotated 180 degrees. There are plenty of women who do better than individual men. But overall there’s a stasticially significant difference in their average performance. This kind of difference carries over from one culture to another. It’s even detectable in babies. ...

... Whenever we reflect on human evolution, it pays to compare our species to other animals. And in the case of spatial abilities, the comparison is fascinating. Almost a century ago, the psychologist Helen Hubbet found that male rats could get through a maze faster than females. The difference can also be found in a number of other species. ...

... Clint and his colleagues propose a different explanation: male spatial ability is not an adaptation so much as a side effect. Males produce testosterone as they develop, and the hormone has a clear benefit in terms of reproduction, increasing male fertility. But testosterone also happens to produce a lot of side effects, including male pattern baldness and an increased chance of developing acne. It would be absurd to say acne was an adaptation favored by natural selection. The same goes for the male edge in spatial ability, Clint and his colleagues argue. They note that when male rats are castrated, they do worse at navigating a maze; when they are given shots of testosterone, they regain their skill. ..."

Latin America's income inequality falling, says World Bank

Guardian: Latin America's income inequality falling, says World Bank

Region now has as many middle class people as those who are poor thanks to rapid growth in incomes, study reveals.

Income inequality is falling in Latin America even as it rises elsewhere in the world, according to a World Bank study that encourages government intervention to reduce the wealth gap.

Over the past 15 years, more than 50 million people have risen into the middle class, which is now – for the first time – about the same size as the population of poor in the region, says the report, which was unveiled on Tuesday. ...

... He said the main reason for the reduction in inequality is not a compression of income from the rich at the top, but because of a rapid growth in the incomes and spending power of those at the "bottom of the population pyramid".

About 30% of the region's population is now in the middle class, which the World Bank defines as those who have less than a 10% chance of falling back into poverty. This is similar to the proportion who are classified as poor. In between is the biggest group, the 38% who are considered "vulnerable" because they live just above the poverty line on an income of between $4 and $10 a day. ...

... The report, titled Economic Mobility and the Rise of the Latin American Middle Class, recommends improvements in public education and healthcare as a way of consolidating the upward mobility of the population. Currently, one of the biggest gaps is not in spending power, but in access to decent social services. In many countries, poorer families have no choice but to put their children in low-standard schools and their sick in poorly-funded hospitals, while the middle class spend substantial sums on private education and health care.

The World Bank's president, Jim Yong Kim, emphasised the role played by the private sector, which he said creates 90 percent of jobs in developing countries.

But he said the great strength of the story in Latin America was that countries that have self-consciously focussed on reducing inequality have also experienced rapid economic growth. ...

Honduras Sets Stage for 3 Privately Run Cities

ABC News: Honduras Sets Stage for 3 Privately Run Cities

Investors can begin construction in six months on three privately run cities in Honduras that will have their own police, laws, government and tax systems now that the government has signed a memorandum of agreement approving the project.

An international group of investors and government representatives signed the memorandum Tuesday for the project that some say will bring badly needed economic growth to this small Central American country and that at least one detractor describes as "a catastrophe."

The project's aim is to strengthen Honduras' weak government and failing infrastructure, overwhelmed by corruption, drug-related crime and lingering political instability after a 2009 coup.

The project "has the potential to turn Honduras into an engine of wealth," said Carlos Pineda, president of the Commission for the Promotion of Public-Private Partnerships. It can be "a development instrument typical of first world countries."

The "model cities" will have their own judiciary, laws, governments and police forces. They also will be empowered to sign international agreements on trade and investment and set their own immigration policy. ...

... Oscar Cruz, a former constitutional prosecutor, filed a motion with the Supreme Court last year characterizing the project as unconstitutional and "a catastrophe for Honduras."

"The cities involve the creation of a state within the state, a commercial entity with state powers outside the jurisdiction of the government," Cruz said.

The Supreme Court has not taken up his complaint.

Got to admit, this one seems a bit odd.

In 2005-2008, Poverty has fallen in all regions of the world

The Economist: Now for the good news

Poverty has fallen in all regions of the world

THE past four years have seen an economic crisis coincide with a food-price spike. That must surely have boosted the number of the world’s poor (especially since food inflation hits the poor hardest)—right? Wrong. New estimates of the numbers of the world’s poor by the World Bank’s Development Research Group show that for the first time ever, poverty—defined as the number and share of people living below $1.25 a day (at 2005 prices)—fell in every region of the world in 2005-08. Half the long-term decline is attributable to China, which has taken 660m people out of poverty since the early 1980s. But the main contribution to the recent turnaround is Africa. Its poverty headcount rose at every three-year interval between 1981 and 2005, the only continent where this happened. But in 2008, it fell by 12m, or five percentage points to 47%—the first time less than half of Africans have been below the poverty line. The bank also has partial estimates for 2010. These show global poverty that year was half its 1990 level, implying the long-term rate of poverty reduction—slightly over one percentage point a year—continued unabated in 2008-10, despite the dual crisis.

 

Latin America's middle class grows, but with a tenuous grasp on status

Christian Science Monitor: Latin America's middle class grows, but with a tenuous grasp on status

Although 56 million households have joined Latin America's middle class, many lack the benefits and job security to ensure stability.

With a regular salary as a beauty salon manager, Edgar Ladino supports his two children, leases a compact car, and is able to make rent payments on time.

“It’s not my dream job, but it’s OK,” he says with a shrug, sipping a latte at a Bogotá shopping mall.

Mr. Ladino may not love his job, but it has landed him a spot in the burgeoning Latin American middle class. Millions across the region are finally setting up new companies, buying cars and homes, and helping to further stabilize democracies. In the world’s most unequal region, their rise has dominated policy documents, academic papers, and press reports.

Fifty-six million households have joined the Latin American middle class in the past decade and a half, according to new analysis by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), which studied 10 countries in the region representing 80 percent of the population. The growth mirrors trends in the rest of the world, the group says, with 1.3 billion people today calling themselves middle class.

But behind good news lies a troubling reality. While new members of Latin America's middle class might be better off than their parents, the benefits often taken for granted by their Western counterparts remain far from their grasp. Many are barely holding on to their new status, with insecure jobs and poor access to quality education for their children. In most cases, they are more likely to fall into poverty again than rise into affluence. ...

Contrasting corruption: Bribery in Mexico

Economist: Contrasting corruption: Bribery in Mexico

International Public Opinion on the Free Market

From the Economist

Global Poverty Falls Below One Billion

The Brookings Institution: Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015

... How many poor people are there in the world and how many Are there likely to be in 2015?

To calculate the number of people in the world living in extreme poverty, we update the World Bank’s official $1.25 a day poverty estimates for 119 countries, which together account for 95 percent of the population of the developing world. To do this, we take the most recent household survey data for each country, and generate poverty estimates for the years 2005 to 2015 using historical and forecast estimates of per capita consumption growth, making the simplifying assumption that the income distribution in each country remains unchanged.

Global poverty figures are then calculated by adding together the number of poor from each country. (See the Appendix for a full account of our methodology.) Our results indicate that the world has seen a dramatic decrease in global poverty over the past six years, and that this trend is set to continue in the four years ahead. We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people, from over 1.3 billion in 2005 to under 900 million in 2010. Looking ahead to 2015, extreme poverty could fall to under 600 million people—less than half the number regularly cited in describing the number of poor people in the world today. Poverty reduction of this magnitude is unparalleled in history: never before have so many people been lifted out of poverty over such a brief period of time.

When measured as a share of population, progress remains impressive, but is more in line with past trends. In the early 1980s, more than half of all people in developing countries lived in extreme poverty. By 2005, this was down to a quarter. According to our estimates, as of 2010 less than 16 percent remained in poverty, and fewer than 10 percent will likely be poor by 2015.

The first Millennium Development Goal defines a target (MDG1a) of halving the rate of global poverty by 2015 from its 1990 level. In an official report prepared for the U.N. MDG conference this past September, the World Bank stated that we are 80 percent of the way toward this target and are on track to meet it by 2015, though the Bank warned that “the economic crisis adds new risks to prospects for reaching the goal.”3

Our assessment is considerably more upbeat. We believe that the MDG1a target has already been met—approximately three years ago.4 Furthermore, by 2015, we will not only have halved the global poverty rate, as per MDG1a, but will have halved it again.

Over the past half century, the developing world, including many of the world’s poorest countries, have seen dramatic improvements in virtually all non-income measures of well-being: since 1960, global infant mortality has dropped by more than 50 percent, for example, and the share of the world’s children enrolled in primary school increased from less than half to nearly 90 percent between 1950 and today.5 Likewise there have been impressive gains in gender equality, access to justice and civil and political rights. Yet, through most of this period, the incomes of rich and poor countries diverged, and income poverty has proven a more persistent challenge than other measures of wellbeing.6 The rapid decline in global poverty now underway—and the early achievement of the MDG1a target—marks a break from these trends, and could come to be seen as a turning point in the history of global development. ...

Here are some interesting charts and graphs:

  

I particularly liked this graph:

Nigeria will soon have more poor people than India.

Does culture affect long-run growth?

Vox: Does culture affect long-run growth?

Does culture affect long-run growth? This column argues that countries with a more individualist culture have enjoyed higher long-run growth than countries with a more collectivist culture. Individualist culture attaches social status rewards to personal achievements and thus provides not only monetary incentives for innovation but also social status rewards. ...

Two interesting graphs:

 

Latin America - So near and yet so far

The Economist: Latin America - So near and yet so far

... As Latin America marks the bicentenary of the start of its struggle for political independence, many of its constituent countries have more recent cause for celebration too. The five years to 2008 were Latin America’s best since the 1960s, with economic growth averaging 5.5% a year and inflation generally in single digits. Even more impressively, a region which had become a byword for financial instability mostly sailed through the recent recession. After a brief downturn in late 2008 and early 2009, a strong recovery is now under way, with most forecasts suggesting economic growth of over 5% this year for the region as a whole.

Along with growth came a better life. Between 2002 and 2008 some 40m Latin Americans, out of a total population of 580m, were lifted out of poverty, and income distribution became a bit less unequal almost everywhere. Poverty increased in 2009 because of the recession, but will start declining again this year. Average unemployment went up slightly to 8.2%, but should come down again this year to 7.8%, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

Latin America weathered the recession partly thanks to good fortune but also to sound policies. After the cataclysmic debt crisis of 1982 the region’s policymakers abandoned the protectionism and fiscal profligacy that had brought hyperinflation and bankruptcy. In their place they adopted the market reforms of the Washington Consensus (opening up their economies to trade and foreign investment, privatisation and deregulation).

But they found the road to stability and faster growth a long and bumpy one. During a second bout of instability, from 1998 to 2002, the region introduced more pragmatic policies. ...

... Some Latin American countries may at last have found a path towards economic development. But getting there may be no quicker or easier than achieving independence. Latin America has often flattered to deceive (see article). Today there are at least three big worries. First, since 1960 it has seen the lowest growth in productivity of any region in the world, not least because around half of all economic activity takes place in the informal sector. Second, despite some recent improvement, its income distribution is still the most unequal anywhere. This has acted as a drag on growth and caused political conflict. Third, it suffers from widespread crime and violence, much of it perpetrated by organised drug gangs. The murder rate is hideously high in some countries.

A problem for any report such as this one is that Latin America is so diverse as to defy most generalisations. ...

Cuba Enacts 2 Surprising Free-Market Reforms

Huffington Post: Cuba Enacts 2 Surprising Free-Market Reforms

HAVANA — Cuba has issued a pair of surprising free-market decrees, allowing foreign investors to lease government land for up to 99 years – potentially touching off a golf-course building boom – and loosening state controls on commerce to let islanders grow and sell their own fruit and vegetables.

The moves, published into law in the Official Gazette on Thursday and Friday and effective immediately, are significant steps as President Raul Castro promises to scale back the communist state's control of the economy while attempting to generate new revenue for a government short on cash.

"These are part of the opening that the government wants to make given the country's situation," said Oscar Espinosa Chepe, a state-trained economist who is now an anti-communist dissident.

Cuba said it was modifying its property laws "with the aim of amplifying and facilitating" foreign investment in tourism, and that doing so would provide "better security and guarantees to the foreign investor."

A small army of investors in Canada, Europe and Asia have been waiting to crack the market for long-term tourism in Cuba, built on drawing well-heeled visitors who could live part-time on the island instead of just hitting the beach for a few days. ...

We pray for Haiti

(Source: Boston.com. AP Photo/The Day, Abigail Pheiffer)

We pray for Haiti

Brothers and Sisters in Christ,
As the eyes of the world turn to Haiti, let us join our hearts in prayer:
God of compassion
Please watch over the people of Haiti,
And weave out of these terrible  happenings
wonders of goodness and grace.
Surround those who have been affected by tragedy
With a sense of your present love,
And hold them in faith.
Though they are lost in grief,
May they find you and be comforted;
Guide us as a church
To find ways of providing assistance
that heals wounds and provides hope
Help us to remember that when one of your children suffer
We all suffer
Through Jesus Christ who was dead, but lives
and rules this world with you. Amen.
(Adapted from Book of Common Worship)

— Bruce Reyes-Chow, Gradye Parsons and Linda Valentine

One way to help? Presbyterian Disaster Assistance.

The Wal-Mart Effect

Foreign Policy: The Wal-Mart Effect

When India's first Wal-Mart opened this summer in Amritsar, the response was mixed, with detractors fearing that big-box stores would eventually crowd out India's fabled "wallah" culture. What no one remarked on, however, was that Wal-Mart's debut in a country is a bellwether for future growth. Indeed, Wal-Mart has started operations in 15 countries since 1991, and 13 of them have had boom economies, with an average of 4.4 percent annual growth since Wal-Mart arrived. Over the last five years, the economies of Wal-Mart countries outside the United States have grown 40 percent faster than the world average. So what's going on? Does the ability to buy giant bags of Froot Loops at cut-rate prices inspire economic growth? More likely, Wal-Mart is simply a smart, cautious investor. "Wal-Mart chooses to go places with a sizable middle class," says Nelson Lichtenstein, a historian who just published a book on Wal-Mart's rise. And Wal-Mart's attention to middle-class growth could pay off for the company in the future.

The portion of the global middle class that lives in the developing world should rise from 56 percent in 2000 to 93 percent in 2030, according to the World Bank. Next up for the Wal-Mart effect, Lichtenstein says: Russia and Eastern Europe. Picture the new global bourgeoisie outfitted with cheap hibachi grills, extra-durable puppy toys, and energy-efficient minifridges, and you've got a glimpse of the coming Wal-Mart revolution.

Why South American economies are rebounding first

Christian Science Monitor: Why South American economies are rebounding first

Commodities-hungry China is pulling Brazil, Chile, and others out of recession. But Mexico and Central America, dependent on US sales, are lagging.

Mexico City; and SÃo Paulo, Brazil - Latin America, long tied to the economic well-being of the United States, finds itself in a rare position these days: recovering from the global financial crisis faster than most of the rest of the world.

After shrinking 2.5 percent this year, the regional GDP is expected to return to 2.9 percent growth next year, according to the International Monetary Fund's World Economic Outlook.

But the recovery has two faces.

Brazil and other commodities-­exporting nations in South America are blazing the way forward thanks to increased trade with China, as Mexico and Central America languish from a sustained drop in demand in the US.

"Every time that the US or Europe or any other of the big world locomotives were in trouble, Latin America fell," says Alfredo Coutino, Latin America director at Moody's Economy.com. "This is the first time in many, many decades in which Latin America is better prepared, in terms of economic strengths, to deal with the external recession." ...

China pursues Latin America ties

BBC: China pursues Latin America ties

Two top Chinese officials have started visits to Latin America as part of an intensified effort to strengthen ties with the region.

Chinese Vice-Premier Hui Liangyu is to visit Argentina, Ecuador, Barbados and the Bahamas.

Vice-President Xi Jinping is visiting Jamaica, Colombia, Venezuela and China's two biggest trading partners in the region, Brazil and Mexico.

China has stepped up its efforts to strengthen ties with Latin America.

It is rare for two of its top leaders to descend on the region almost at the same time. ...

Russia's new presence in Latin America

Christian Science Monitor: Russia's new presence in Latin America

President Medvedev visits Venezuela this week as a Russian nuclear warship leads joint maneuvers.

Caracas, Venezuela; and Moscow - Russian President Dmitry Medvedev's visit this week with Venezuela's leftist leader Hugo Chávez is the first ever for a Kremlin leader to this oil-rich nation. And the meeting – part of a Latin America tour that includes stops in Brazil and Cuba – is kindling concerns that a resurgent Russia is aiming to revive its cold-war era presence in America's backyard.

The meeting is expected to coincide with joint naval exercises off Venezuela's coast, led by the Russian nuclear-powered warship, Peter the Great, and comes as the two powers announce that Russia will help Venezuela build a nuclear reactor.

Both nations insist their focus is economic, but geopolitics are also at play. ...

Latin America better girded for financial crisis

Christian Science Monitor: Latin America better girded for financial crisis

The region is affected by global downturn, but more prepared this time thanks to greater foreign reserves and less external debt.

Mexico City and Sao Paulo, Brazil - As leaders in Washington rushed to stem the growing financial crisis in the United States, Latin American leaders thought they'd be unscathed. Brazil's president, Luiz Inácio Lula da Silva, when asked what repercussions he expected at home, retorted, "What crisis?" Venezuelan President Hugo Chávez called it the "crash of capitalism."

A few weeks later, the tone has changed remarkably for a region heavily dependent on the international prices of minerals, crude oil, and food – all of which have taken a hit – not to mention remittances, tourism, and investment.

Stock markets across the region are falling. Argentina's has sunk 20 percent since Tuesday. Brazil's dropped 10 percent Wednesday; Mexico's, 7 percent; Chile, 6 percent.

Mexico and Brazil, the region's two largest economies, spent chunks of their federal reserves to stem unexpected currency declines. Mexico introduced an emergency stimulus package, while Brazil offered $2 billion in loans to exporters through local banks. The era of uninterrupted economic growth and fiscal surpluses, it seems, could be on the wane.

Yet even as nations await the full impact of a crisis that is reaching every corner of the world, Latin America is better placed today to weather the downturn than at any other time in the past half century, says Gray Newman, senior Latin America economist at Morgan Stanley in New York. Countries in the region have, overall, kept spending within budget and built up their currency reserves. Many have solved external imbalances and adopted flexible exchange-rate systems. ...

...Commodities prices are a key reason. The metals, grains, and livestock that South America sends around the world, particularly to China, helped push Latin America to five years of unstinting growth. Trade surpluses that averaged almost $100 billion a year between 2004 and 2008 are likely to fall to around $23 billion next year, according to a Morgan Stanley report.

The nations that have worked to get their economies in order – such as Brazil, Chile, and Peru – are among the best placed to keep growing next year.

Argentina, Venezuela, Bolivia, and Ecuador are expected to face tougher times – both because they are dependent on commodity exports, says Alfredo Coutino, a senior economist for Latin America at Moody's Economy.com, and because of greater needs for external financing. ...

The ghost at the till: Latin America’s economies

The Economist: The ghost at the till: Latin America’s economies

UNLIKE the developed world, Latin America has been barely touched so far by the credit crunch. Many of its economies are still growing fast, helped by demand for their commodity exports. But the commodity boom has started to have a less desirable effect: soaring food and fuel prices are pushing inflation up across the region. This has become a test of credibility for Latin America’s new-found economic stability, and for its central banks. Some of the more important ones have responded more robustly than many of their Asian peers—even if claims that Brazil’s hawkish Central Bank is “the new Bundesbank” require a pinch of salt.

The regional average inflation rate rose to 7.5% in April, from 5.2% a year before, according to the IMF. This is an underestimate, since Argentina’s official inflation figure of 9.1% is probably less than half the true rate. It also conceals a divide. Around the turn of the decade, several of the larger countries adopted floating exchange rates, and inflation targets administered by more-or-less independent central banks. Another group of countries—including Argentina and Venezuela—have given greater priority to growth than to price stability. But even among the first group, inflation has been rising. In response, central banks in Chile, Colombia, Mexico and Peru began to raise interest rates last year. Even so, they have missed their inflation targets, in most cases for the first time....

 

The end of Communism? Cuba sweeps away egalitarian wages

The Independent: The end of Communism? Cuba sweeps away egalitarian wages

Raul Castro's reforms continue with abolition of rule that labourers and surgeons earn the same.

Cuba took another leap away from Fidel Castro's creaky egalitarian model yesterday when it swept away the wage restraints that have kept surgeons and taxi drivers on much the same salaries for the past 50 years.

The latest and most dramatic liberalisation by Raul Castro appears to be aimed at bringing to communist Cuba the Chinese-style economic reforms he admires so much. But the move falls far short of the political reforms that Cubans, both inside and out of the country, long for.

The new wage policy is the latest change by President Castro, who officially took over on 24 February but has been running the country since July 2006 when his older brother, Fidel, 81, suffered serious health problems.

Since February, Mr Castro, 77, has allowed Cubans to buy personal computers and mobile phones, rent cars and even stay overnight in hotels previously only accessible to foreigners, provided they can afford it.

He has shaken up the economy to pay farmers better and ease the impact of the world food crisis. He has commuted death sentences and released a handful of political prisoners. But his secret police have also broken up meetings of dissidents. ...

Poverty amid progress

The  Economist: Poverty amid progress

A revolution in South America's fastest-growing economy is not reaching everyone.

BLOCKS of flats or offices are under construction on nearly every street. New hotels and restaurants sprout on every corner, while shopping centres multiply in what were once shantytowns. Across the city, thoroughfares have been torn up to make way for new bus lanes and terminals. Such is the anarchic volume of traffic that just crossing the street has become a time-consuming and perilous exercise. Lima, Peru's capital of 8m people, is shedding its former air of provincial lassitude and turning into a bustling metropolis.

The city is the visible face of a boom that has made Peru South America's fastest-growing economy (see chart). That performance owes much to record prices for mineral exports. But newer export products, from designer cotton T-shirts to mangoes and artichokes, are also flourishing. As well as trade, private investment, growing at 20% a year, and domestic consumption are driving the economy forward at an accelerating pace (in the year to February, GDP grew by 9.2%).

Thanks to high world prices for food and fuel, inflation has spiked to 5.5%, having been low for years. Nevertheless, the growth looks to be built on solid foundations. The national savings rate has risen to 24% of GDP, high by regional standards, and the government last year posted a fiscal surplus of 3% of GDP. A free-trade agreement with the United States is about to come into effect. In recognition of such achievements, Peru's debt was awarded an investment-grade credit rating last month by Fitch, a ratings agency.

Yet there are paradoxes at the heart of the boom. Despite the growth, poverty has fallen only slowly. And many Peruvians are disgruntled. The president, Alan García, was once a radical populist who presided over hyperinflation and debt default in a first term in office in the 1980s. He returned to office in 2006 a reformed character. But his people give him little credit for the strong economy. He is one of the least popular presidents in Latin America, with an approval rating of just 26% in a poll taken in the main cities in April by Ipsos-Apoyo, a pollster.

There are several reasons for the relatively slow fall in poverty. Although the number of formal-sector jobs is expanding at 9% a year, many Peruvians still labour in the informal sector of unregistered businesses, where productivity is low. Wages for the unskilled have been slow to rise. ...

Wealth gospel propels poor Guatemalans (Part 1)

Christian Science Monitor: Wealth gospel propels poor Guatemalans (Part 1)

As church lights dim across the US and Europe, Christian houses of worship are opening every day in Latin America. The majority of the new churches are Pentecostal, an expressive evangelical creed that emphasizes individual “gifts of the Holy Spirit.” In a three-part series from Guatemala, Brazil, and Colombia, the Monitor shows how Pentecostals – who now make up nearly 15 percent of Latin America's population – are bringing a fresh, can-do approach to some of the once staunchly Catholic region's most stubborn social ills: poverty, violence, and gender inequality.

Guatemala City - Doris Cuxun will never forget the words that shook her out of a daze one Sunday morning during a service at Showers of Grace, a Neo-Pentecostal megachurch here. "Who here wants to own your own business? Lift your hand!" the pastor hollered.

"I want to, I want to," she whispered amid the dancing and chanting.

"Me? My own beauty parlor?" she thought to herself giddily, incredulously. Could a woman who had grown up in a house made of wood and tin sheeting somehow build a successful business?

A year later, her answer is clear. "God opened the door for me," she says unequivocally while rolling pastel pink paint on the walls of her new salon located next to one of the most upscale malls in Guatemala City.

Like so many here, Ms. Cuxun was born Roman Catholic. Like so many today, she converted to Pentecostalism, a Protestant Christ-ian faith that is sweeping the religious landscape worldwide. ...

Christian Century did some articles back in July about the prosperity gospel in Africa. Richard Mouw wrote an excellent blog post inspired by these articles. He wrote about the "exlcuded middle" when it comes to practical theology:

What I would add to this wise counsel is that we need to do the theological homework that will address these concerns more effectively. For me, the case was put in a challenging manner by my former colleague, the late Paul Hiebert, who published an important essay, “The Flaw of the Excluded Middle,” in the early 1980s in the journal Missiology. Hiebert recounted his experience as a missionary anthropologist with recent converts to Christianity in a village culture in India. When these folks would face difficult challenges relating to fertility, family crises, or economic threats, they would often turn to the shaman for help. Hiebert realized that he did not have the theological resources to address their practical concerns. He had a “high” theology of God, salvation, and human destiny. He also had a scientific grasp of empirical reality. But he was lost when dealing with a middle range of issues: How can I avoid accidents? How can I win my husband back? Who can help me deal with my child’s illness? How can I find enough food for our next meal?

This is the theological “excluded middle” that my own theology does not know how to address. Yet for many people in the world, those are the most important issues in their lives. Much of what goes into “prosperity preaching” makes me nervous theologically. But until the rest of us learn how better to address “the middle range,” I for one will refrain from attacking.

Amen!

Global Development Matters

Yesterday I came across a website called Global Development Matters. I haven't had time to explore it entirely, but I did check out some short video clips they have produced to help people think about globalization and poverty. Here are three. I especially loved this first clip.

Navigating Balance in the Global Economy

Changing Lives with Small Loans

Understanding Two Sides of Global Trade

Chile: well on the way to eradicating poverty

MacLeans.ca: Chile: well on the way to eradicating poverty

Capitalism and globalization used to be dirty words for Latin American leftists, who in the past were quick to blame the region's poverty on what they saw as these largely destabilizing and outside factors. But after a decade in which savvy leftist legislators in Chile pursued a bold economic program to embrace the free market, while at the same time creating public policy measures to address the needs of the most impoverished in the country, poverty is rapidly becoming an anachronism in Chile, one of the world's fastest-growing economies.

Poverty has fallen faster in Chile than anywhere else in Latin America, according to figures recently published by the Chilean government. Statistics collected by the Caracterización Socioeconómica Nacional (CASEN) survey carried out by the country's planning ministry showed that poverty fell from 18.7 per cent in 2003 to 13.7 per cent in 2006. In 1990, when dictator Augusto Pinochet left office, more than 38.6 per cent of people in this Andean country of 16 million lived below the poverty line.

For the country's president, Michelle Bachelet, the breakthrough is due entirely to the steady rule of several centre-left Concertación administrations. The party, an alliance of centre-left political parties founded in 1988, has won every presidential race since Pinochet's departure. "The social achievements are obvious," said Bachelet, a former political prisoner under Pinochet's rule, in a recent public statement following the release of the CASEN statistics. "Our priorities have never varied and we stick to them: a social safety net as never before, quality education, better health care, decent homes, pensions for the most vulnerable."

..........

...The Chilean government has invested in public infrastructure and telecommunications while maintaining a strong export-led approach to development, he says. Chile has 54 free-trade agreements with countries all over the world, including Canada. Since 1990, the country has increased exports from US$9 billion a year to US$60 billion in 2006, Heine says. As a result, Chile's economy has grown at a yearly average of 5.6 per cent, the highest anywhere outside Asia. Since 1990, per capita income has soared from US$2,500 to US$9,000 today....

Up from the bottom of the pile

The Economist: Up from the bottom of the pile

Something rather exciting is happening in Latin America.

MUCH of the news coming out of Latin America in recent years has been of radical populists proclaiming “revolution” or, as Venezuela's Hugo Chávez would have it, “21st century socialism”. In their widely propagated caricature, a tiny white elite in Latin America oppresses an indigenous majority whose poverty has been exacerbated by the free-market reforms imposed by the IMF and the United States.

So it might be hard to believe that in many countries in the region, and especially in Brazil and Mexico, Latin America's two giants, things are in fact going better today than they have done since the mid-1970s. The region is in its fourth successive year of economic growth averaging a steady 5%. In most places inflation is in low single digits. And for the first time in memory, growth has gone hand-in-hand with a current-account surplus, holding out hope that it will not be scotched by a habitual Latin American balance-of-payments crunch.

What is more, financial stability and faster growth are starting to transform social conditions with astonishing speed. The number of people living in poverty is falling, not only because of growth but also thanks to the social policies of reforming democratic governments. The incomes of the poor are rising faster than those of the rich in Brazil (where income inequality is at its least extreme for a generation) and in Mexico.

In both these countries a new lower-middle class is emerging from poverty (see article). Low inflation, achieved through more disciplined public finances and trade liberalisation, has brought falling interest rates. Credit has at last returned. So these new consumers are buying cars and DVD players or taking out mortgages. No wonder Latin Americans are in an optimistic mood: earlier this year a poll by the Pew Global Attitudes Project found a greater increase in personal satisfaction in Brazil and Mexico over the past five years than in any of the other 45 countries it surveyed. ...

See related story: Latin America's middle class: Adiós to poverty, hola to consumption

The richest man you've never heard of

USA Today: The richest man you've never heard of

MEXICO CITY — Carlos Slim Helú's business career began on the playground, trading baseball cards.

He would buy the adhesive-backed cards at a candy stand in downtown Mexico City, then make a meticulous record of each trade in a notebook, carefully evaluating whether he had come out on top.

By age 12, he had moved on to trading stocks and bonds. Before turning 30, he owned a soft drink company and a stock brokerage. Now, at 67, Slim is the world's second-richest man and is closing quickly on Bill Gates, according to Forbes magazine's most recent rankings. Slim's business empire stretches from Mexico to the USA — including major stakes in companies such as CompUSA and Saks Fifth Avenue — yet most Americans have never heard of him.

Slim accumulated his $53 billion fortune by collecting companies much as he once did baseball cards. He searches for undervalued businesses, infuses them with cash and uses the size of his holdings to overwhelm the competition. He now owns controlling stakes in at least 222 businesses, but he tells USA TODAY in a rare interview that he has never forgotten the lessons of his youth.

"Buying well is a discipline," he says. "The first type of business negotiation you do as a child. … (Trading cards) was a way to understand supply and demand, to understand the market. … Some boys had few (cards), and some had a lot." ...

Religion in Latin America: Lighting on new faiths or none

The Economist: Religion in Latin America: Lighting on new faiths or none

In his first Latin American visit, Pope Benedict XVI will find a less divided church facing stronger rivals.

.......

Benedict's choice of Aparecida for the conference suggests a desire to guide Latin America's Catholics back to traditional spirituality after decades of strife between progressive and conservative wings of the church. “Our great mission is to reach people who belong to the church but have lost a sense of living in accordance with the faith,” says Raymundo Damasceno Assis, the archbishop of Aparecida.

Belief in God is as widespread in Brazil as in the United States, says Antônio Flávio Pierucci, a sociologist at the University of São Paulo, but religious practice is close to Europe's wan levels. The numbers saying they are of no religion is small but growing. Some in the Catholic church fear that it is losing its grip over public morality. Local governments in Buenos Aires and Mexico City have recently legalised gay unions; the latter legalised abortion last month. Brazil's health minister has called for a plebiscite on the issue.

The more familiar threat to Catholic hegemony in Latin America comes from Pentecostal Protestantism. Born in the United States, this began to spread south a century ago but it has taken off since the restoration of democracy in the 1980s. According to the World Christian Database, a statistical service based in Massachusetts, more than 80% of Latin Americans are still Catholic. But that figure has been falling swiftly.

In Brazil, the world's largest Catholic country, the church has lost adherents at a rate of 1% a year since 1991, mainly to Pentecostal churches. Fewer than three-quarters of Brazilians are now Catholics while 15% are Protestants (known locally as “evangelicals”). In Mexico, 7.3% were Protestants according to the 2000 census; the figure may be almost 20% today. In Guatemala, some 30% are Protestant.

Traditional varieties of Pentecostalism emphasise a strict moral code of personal behaviour, including teetotalism and marital fidelity. Newer groups have added a gospel of self-enrichment. They offer a customer-friendly faith, telling the poor and uprooted that Christ can improve their lives and that He can be approached through ecstasy rather than ritual....

Building a reluctant nation: Haiti

The Economist: Building a reluctant nation: Haiti

This tenuous foothold of law and order is a microcosm of Haiti's snail-like progress a year after René Préval was elected as president of the poorest and most lawless country of the Americas. The election came two years after the ousting of the thuggish socialist regime of Jean-Bertrand Aristide at the hands of a rebel band and American and French troops.

For a failing state, the election was a success. Mr Préval, a moderate former president who was once an ally of Mr Aristide, won just over 50% of the vote. But he did not form a government until June, after legislative elections. Local elections followed in December, with more due in March. All this voting gives Haitians the chance of a fresh start, but it has also diverted resources from other priorities.

The most pressing issue remains crime. The government tried at first to negotiate with the criminal gangs. But kidnaps, assaults and drug-trafficking rose. A UN scheme under which those who hand in guns get job training has few takers. The new, tougher policy is aimed at regaining control of places like Cité Soleil, a district of more than 200,000 people which has been too dangerous for aid groups to enter.

.......

Even in Port-au-Prince's richer suburbs, rubbish fills the streets. The economy has stopped contracting. Venezuela supplies subsidised oil and Haitians in the United States send money home. But Haiti still depends on foreign aid for over 65% of the state budget. A job-creation scheme, backed by $128m from the United States and the World Bank, is only just starting up. According to the bank, 83% of skilled Haitians live abroad. Driven out by instability and poverty, they have yet to show any sign of returning.

Mexico: Coffee Farmers Find Connection With God

Mexico: Coffee Farmers Find Connection With God is an article about the ministry of Growers First at Sight Magazine. This is exciting stuff!

Growers First bought Pastor Pacheco’s entire coffee crop - along with the crops of about 480 other small farmers in the region. Eliminating the middlemen, known as 'coyotes', who take advantage of the smaller farmers is one way additional income is generated by Growers First. The other key was getting organic certification for Pastor Pacheco’s coffee, which added value in the global marketplace.

One of Day’s favorite words is ‘sustainability.’ “Handing out money is robbing a man of his dignity, pride and self-worth,” he maintains. “We feed into that dignity at a grassroots level.”

But the support offered by Growers First is not just economic. Day and his team are actively involved in equipping local pastors, planting churches, and investing in the growth of a small Bible school. Their annual Leadership Conference for pastors and their families drew over 1,000 last year to a cattle ranch in La Ventosa, at the base of the mountains. Paco Montero, who oversees the ranch, hopes to double the size of their main meeting area and build 15 additional restrooms to handle next year’s conference.

El Salvador’s Secret: Freedom and Opportunity Cure Poverty

El Salvador’s Secret: Freedom and Opportunity Cure Poverty is an address given by Francisco Flores, president of El Salvador, 1999-2004. It was delivered on October 24, 2005, at the Acton Institute in Grand Rapids, MI. Here is a quote from his address:

The important message is this: Fifteen years ago, El Salvador was destroyed by war, seven years ago by hurricanes, four years ago by earthquakes. Extremely poor, 15 years ago, some 60 percent of the population lived under the poverty line. The country was totally dependent on its traditional agricultural exports and unable to honor its financial obligations. Fifteen years ago, its infrastructure had collapsed: Roads, energy systems, water distribution, telecommunications.

Today, El Salvador is a different country. It has the most accelerated poverty reduction rate in Latin America. From 60 percent to 30 percent under the poverty line, El Salvador has reduced its poverty level by half in twelve years. Twenty-five percent of our population could not read nor write; now it is down to 12 percent. Infant mortality has dropped from 45 out of a thousand births to 24.

The unemployment rate has dropped from 13 percent to 6.5 percent. Interest rates have lowered from 30 percent in 1992 to 6.8 percent last year. El Salvador has the lowest inflation rate in Latin America, and its fiscal discipline has earned it the coveted investment grade, only held by El Salvador, Chile and Mexico.