Some time in September 2008, Brazil’s president, Luiz Ignácio Lula da Silva was asked by journalists what he thought about the global economic crises we are going through. He replied by saying, “When people ask me about an economic crisis in the world, I tell them, go ask George Bush. After all, it is his crisis and not mine.” Such has been more or less the attitude of the Latin finance world to contemporary issues and developments. Whether described as indifference or whatever else, Latin finance has had a hands-off policy of administrating growth and development for a long time now.
It is easy to understand why this delusion has been perpetrated in the region about the non-volatile status of their financial institutions. Policymakers and key economists on the world stage have been full of praise for Latin America’s increasing financial independence and industrial maturity. Of repute has been the fiscal discipline, sustained economic growth, reducing external debt and aid levels, high commodity prices, growing international and national reserves, strengthened governance, and the national and corporate balance sheets health. These developments are amiable and deserving of praise indeed. They are indeed very promising in the race to place Latin America on a firm economic footing by and by. The only problem is that without a change of approach and policy, Latin markets might find themselves irrelevant, and very soon at that, in the face of new developments in the world finance circles.
An instance of this myopic indifference was experienced immediately the credit crisis hit the U.S. financial markets. Most experts and public officials expressed confidence that