Corporate Social Responsibility
est economic stimulus ereign wealth funds as
plan in Chile’s histo- well as new bond issues.
ry. The $4 billion plan is Funds will go primar-aimed at assuring a steady ily toward subsidies, tax
growth rate of 2 to 3 per- rebates, infrastructure
cent with the creation of projects, and capitaliza-
100,000 jobs. Chile’s eco- tion for state copper pro-nomic stimulus is being ducer Codelco to expand
funded by fiscal reserves production. In total, the
acquired between 2003 plan will allow for a 10. 7
and 2008. This package percent increase in fis-draws from $21 billion of cal spending this year.
copper earnings that the Mexico is applying
government placed in sov- similar fiscal measures.
NICOLAS DEGASPERI/AFP/GEtty ImAGES
down in the world economy and in trade. In particular, as fiscal balances will be put under stress,
governments should weigh the effectiveness, timing
and potential risks associated with launching new
public spending programs.
But in the end, swift action is necessary to restore
confidence in the advanced economies themselves.
And although one may think of various policy
actions that could help under current circumstances,
it is paramount to realize that the health of financial institutions cannot be hidden under the rug. To
be sure, the new U. S. administration has pledged to
Unlike Chile, Mexico
is extremely vulnerable to economic turmoil
originating in the United States. Exports to the
United States represent
more than one quarter
of Mexico’s GDP. Remittances have also taken a
big hit, affecting one of
Mexico’s major sources of hard currency.
In January 2009, President Felipe Calderón
The source of
revealed a stimulus plan
accounting for 1 percent
of GDP, or approximately
$54 billion, that includes
infrastructure investments in roads, railways
and oil rigs, cuts in energy
prices, measures to extend
medical coverage and job
creation. In many ways,
though, Mexico’s real
stimulus will hinge on the
success of the $800 billion across the Rio Bravo.
invest significant resources in a new bank rescue
plan. Ultimately, its success will depend crucially
on implementation by regulators and supervisors
as well as on the quality of corporate governance at
the financial institutions themselves. While some of
the bank rescue actions announced by the U. S. Treasury earlier this year are encouraging, much more
is needed. Banks’ credibility needs to be restored by
removing toxic assets from their balance sheets and
ensuring effective implementation.
FOr sOUr CE Ci TATiOns sEE: W W W.americasquarterly.org/guiDotti.
americas quarterly 53