拉美国家金融动荡的财政原因分析（Financial reasons for financial turbulence in Latin America）

1、拉美国家金融动荡的财政原因分析（Financial reasons for financial turbulence in Latin America）Financial reasons for financial turbulence in Latin AmericaFinancial reasons for financial turbulence in Latin America 2008-12-20 15:15:29Abstract: after the outbreak of the debt crisis in 1980s, Latin American countries imp

2、lemented the acute fiscal adjustment, which laid a hidden danger for the outbreak of the financial crisis in 90s. In 90s, the problems of Latin American countries, such as the cyclical fiscal policy, the defects of debt management, the large amount of invisible debts, and the lack of straighten out

3、of the intergovernmental financial relations, were potentially threatening the financial stability of Latin American countries. The analysis of the financial reasons for the financial turmoil in Latin America can provide useful inspiration for Chinas coordinated fiscal and financial reform.Keywords:

4、 debt crisis, financial crisis, fiscal policy, pro cyclicalThe financial market turmoil in Latin America in 1990s was not only related to the opening of capital projects, exchange rate regimes and many mistakes in the use of foreign capital, but also the fiscal factors of which were not to be neglec

5、ted. The maintenance of financial stability and financial security is an important issue in Chinas 11th Five-Year plan. While improving financial supervision and preventing financial risks, we also need to control the adverse effects of financial risks on financial stability. By analyzing the financ

6、ial reasons for the financial turmoil in Latin America, we can provide some useful reference for the coordination of fiscal and financial reform in china.First, in 1980s to cope with the debt crisis fiscal adjustmentAfter the debt crisis broke out in 1980s, the fiscal adjustment in the economic stab

7、ility plan of Latin American countries created a systematic obstacle for the outbreak of the financial crisis. The stability plan with the nominal exchange rate anchor as the core, the lack of coordination between fiscal policy and monetary policy leads to the overestimation of the real exchange rat

8、e and the inflow of speculative capital. Many stability programs ended in failure due to over reliance on wage and price indexation and lack of tight fiscal policy. Based on the consideration of political costs, Latin American countries did not implement basic fiscal reforms in 80s. They relied main

9、ly on quick settlement of fiscal revenue and expenditure policy measures.First, pay attention to short-term financial revenue and expenditure adjustment. In revenue, expand the tax and fees should be acute, mandatory savings plan or public debt conversion; in fiscal expenditure, reduce the overall q

10、ualitative illegal spending, through financial engineering operation of deferred payment of public debt interest.Second, cut government investment and social spending. Compared with the East Asian countries, Latin American countries greatly reduce the government investment, so that the regions infra

11、structure investment is seriously inadequate, which has a negative impact on economic growth potential. Cuts in education, health care and social security and other social spending in 90s caused the social field greatly, especially the social security field has accumulated a large number of hidden l

12、iabilities.Third, the government can not adhere to the budget deficit target and the international capital markets reverse account behavior, leading to a decline in the credibility of the government at home and abroad. The quasi financial activities of the state-owned financial institutions have acc

13、umulated implicit debt, while the financial costs of rescuing financial institutions have been magnified by the relaxation of banking supervision.Fiscal reasons for the financial turmoil in Latin America in two and 1990sThe fiscal imbalances in Latin America improved in 1990s. However, under the imp

14、act of globalization, the ability of Latin American economies to resist the financial crisis has not increased. Mexico (1994 - 1995), Ecuador (1999), Brazil (1999 and 2002), Argentina (2001) and Uruguay (2002) had a series of financial crises. In 90s, the problems related to financial instability in

15、 Latin American countries were manifested in the following aspects:First, the fiscal policy has a high Pro cyclical nature. According to the Keynes doctrine, fiscal policy should be against the wind. However, most of the Latin American countries fiscal policy tends to downwind act, has a strong Pro

16、cyclical, namely economic upsurge, government spending and tax cuts, while the recession was the implementation of tight fiscal policy. This Pro cyclical fiscal policy is superimposed with the adverse effects of trade conditions, capital flows and global interest rate fluctuations, resulting in macr

17、oeconomic instability and weakening immunity to external shocks.Second, the increase and repayment of public debt intensifies the Pro cyclical nature of fiscal policy. Latin Americas public debt generally rose rapidly as economic growth resumed, trade conditions improved and capital inflows increase

18、d. When the economic recession, due to the limited financing capacity of the government, the pressure to repay debt has magnified the adjustment of fiscal expenditure, and the result has exacerbated the Pro cyclical nature of fiscal policy. Empirical studies have shown that the output gap in Latin A

19、merican countries has narrowed by 1%, and the primary surplus of GDP will increase by 0.04%, while in industrialized countries it will increase by 0.87% 1.Third, the external debt management has the flaw. Because the international capital market financing conditions are more stringent,Moreover, the

20、imperfect development of domestic capital markets and the reliability of policies have prompted Latin American countries to issue short-term foreign debt denominated in foreign currencies. When the exchange rate anchor is used to stabilize the value of the currency, the foreign exchange burden will

21、be underestimated if the real exchange rate is overestimated. For example, in 2002, the proportion of public debt in Argentina increased by 65%, most of which was due to the devaluation of the exchange rate (GDP).Fourth, the public sector has accumulated a large amount of implicit debt and debt. A w

22、ide range of implicit debt and debt is a common financial problem for Latin American countries. These large amounts of implicit debt and debt are one of the sources of financial risk, and they are potential negative factors that affect the financial stability of Latin america. According to IMF estim

23、ates, if in accordance with the recessive liabilities accounted for the proportion of GDP to measure the increase in government debt burden, Mexico (1995 - 1997) 19%, Argentina (1999 - 2002) 14.5%, Brazil (1996 - 2000) 8.5% - 2.Fifth, the narrower tax base undermines the sustainability of Finance an

24、d limits the governments solvency. In mid 90s, nearly half of the countries in the Latin American government tax revenue as a percentage of GDP is less than 14%, only slightly increased in late 90s. In addition to the low proportion of government revenue to GDP, some countries rely excessively on th

25、e export of primary products, resulting in poor stability of government revenues, affecting the sustainability of Finance and the governments ability to repay debts.Sixth, the rigidity of fiscal expenditure compresses the space that the government adjusts the fiscal policy when it faces the financia

26、l crisis. The rigidity of fiscal expenditure not only weakens the efficiency of distribution and the flexibility of expenditure, but also limits the ability of macroeconomic regulation and control of the government. According to estimates of the degree of expenditure rigidity of Latin American count

27、ries, countries vary considerably, with Brazil and Columbia at around 80%.Seventh, the decrease of the quality of fiscal expenditure weakens the function of financial development. As the tax base is narrow and fiscal expenditure is rigid, the government mainly compresses infrastructure investment in

28、 the face of financial expenditure pressure. Ignoring the accumulation of capital in the public sector undermines long-term economic growth and weakens the governments ability to pay its debts. In addition, a large amount of social spending in Latin American countries is used to subsidize social sec

29、urity, so that the proportion of social education in the basic education and preventive medical care for the poor is very small.Eighth, the intergovernmental financial relations are not straightened out. When dealing with financial risks, the central government and local governments are difficult to

30、 coordinate. Decentralization reform in Latin America has weakened the central governments macro control capability, especially in Brazil and Argentina. In 1999, when the Brazil parliament discussed fiscal reform, governor Hussein Minas Djilas announced the end of the federal debt repayment, but tri

31、ggered financial turmoil in Brazil.Ninth, extra budgetary expenditure increases the financial risk. In some Latin American countries, the lack of financial statistics and the lack of transparency in fiscal accounts have covered off budget spending, causing the government to fail to keep track of the

32、 actual debt situation. These liabilities include the loss of central bank operations, financial support for state-owned financial institutions, repayment of tax concessions, arrears and privatization of state-owned enterprises. In addition, in the early 90s, after the social security reform, some o

33、f the countrys pension insurance included some of the governments payments for the personal retirement account or the minimum pension, causing financial costs to rise.Three. ConclusionIn the Latin American economic transition, the impact of fiscal factors on financial stability is critical. In 90s,

34、lax fiscal discipline, pro cyclical fiscal policy and the underestimation of fiscal costs in economic transition were potential factors threatening Latin American financial stability. The rapid privatization of state-owned enterprises and the liberalization of trade have reduced the robustness and s

35、ustainability of fiscal reform in the economic transition. Compression of infrastructure investment is the long-term growth prospects, fiscal sustainability issues and cuts in social spending increased; although in the short term to reduce the financial burden, but the income inequality worsened social problems. In 90s, financial turmoil in Latin America, financial risks and social problems intertwined with each other. In the context of financial globalization, the rapid financial opening, coupled with the fragile financial facto