Ei-iE

Think-tank report proposes lessons to be learned from previous crises

published 15 July 2009 updated 15 July 2009

This week, the think-tank "Carnegie Endowment for International Peace" published a report on the response to the financial crisis in middle-income countries.

The author, Alejandro Foxley, former foreign and finance Minister of Chile, argues that lessons should be learned from previous crises in these countries such as Chile’s in 1982 or Mexico’s in 1994. The report gives several useful recommendations, such as the need for increased labour market participation of women and the need for education as a means to "get smart" in the knowledge-based economy. At the same time, Foxley puts forward controversial proposals that might harm long-term recovery such as the flexibilisation of hiring/firing regulations to boost the economy on the short term. It is however made clear that these reforms should only be passed by large political majorities. The report can be downloaded from their website: carnegieendowment.org.