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Latin America’s Irrational Exuberance

MONTEVIDEO – Latin America is coming to the end of an extraordinary cycle of growth that has transformed much of the continent, especially its commodity-exporting countries. But, as the boom recedes, a deep, debilitating weakness is becoming increasingly apparent: the region’s inadequate education systems. This shortcoming undermines the continent’s longer-term economic prospects, social stability, and fight against poverty.

Such dire warnings have been obscured in recent years by headline-grabbing GDP figures. From 2004 to 2011 (excluding the crisis year of 2009), the region almost doubled its long-run average growth rate. This sustained period of expansion was all the more noteworthy because it followed a half-century of relative decline, with Latin America’s per capita income relative to the United States falling from around 50% in the 1950’s to 23% in 2004.