ECLAC: UNEMPLOYMENT IN LATIN AMERICA TO REMAIN STRONG INTO 2012 BECAUSE OF UNCERTAINTIES

Santiago, April 11- An estimated 17 million people will suffer unemployment in Latin America well into 2012 according to latest estimates from the Economic Commission for Latin America and the Caribbean, ECLAC.

Nevertheless he underlined that Brazil has been the great performer since it created 10 million formal jobs between 2003 and 2010.

“It’s very hard for unemployment to drop from its current 7% to 7.2%”, admitted the Berlin University educated Weller who added that Latin American countries have lesser fiscal space to boost investment and jobs, but “the impact of instability will be milder in South America”.

Weller said that in spite of the positive signals from the United States, there’s uncertainty about the recovery particularly because of the European crisis, Ireland, Portugal and eventually Spain.

“The regional labour market will also suffer the consequences from the (nuclear) crisis in Japan and China’s package to control inflation”, underlined Weller.

He said that the great achiever so far is Brazil, which generated 10 million formal jobs in the last eight years “a quality of life leap for millions”.

But at the other end of Latin America and the Caribbean labour spectrum are Venezuela and Haiti, the only two countries that have seen a significant reduction in the employment level during 2010, and in the case of Venezuela “this was accompanied by a fall in the average salaries”.

As to the rest of the continent, Weller said South American countries are advancing sustainedly because of improved growth and less dependency on the US compared to Mexico and Central America.

Weller mentioned the fall in unemployment in Argentina and Peru, although in the last case “there has been a notorious weakness in transmitting the dynamism of the performing economy to the peasants and urban poor”.

“They have not benefited much from the strong economic growth of Peru in the last several years”, which has been reflected in certain social turmoil involving peasants, indigenous groups and the poor living in the sprawling capital Lima.

Regarding Mexico, the country that most suffered from the US recession since 90% of its exports are shipped to that country, the economy is gradually recovering, employment tepidly but “average salaries remained frozen during 2010”.

Finally the Weller paper makes some comments about what can be expected: “no major unemployment descent in 2012, “since countries in the region will face serious macro-economic risks in the coming months”.

Threats so far are not serious but they are clearly geared to those economies “with a boom in domestic consumption, strong foreign exchange appreciation and the growing impact of imported inflation in food and energy on local prices’ level”.

“This could clearly lead to an increase in interest rates which will impact growth and therefore employment”, concluded Weller.

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