The economies of Latin America have undergone a deep process of change in the last decade as a result of the application of major reforms. The outcome can be fairly described as a New Economic Model. This New Economic Model is distinguished from its predecessor, in force before the 1980s debt crisis, by an emphasis on market forces and export-led growth. This book explores the main features of the New Economic Model in Latin America and, through analysis of the reform process and case studies, examines its impact on income distribution and poverty.

Foreign trade has always been crucial to the economic development of the Caribbean. Slavery was introduced to the Caribbean by Europeans in order to make commodity export profitable. An adequate supply of (low cost, forced) labour was a necessary condition for profitability but it was not sufficient, and as market conditions changed, Caribbean countries had to shift resources from one export to another. In 1820 sugar accounted for 50% of merchandise exports but fell below 40% at the end of the century and below 20% by the 1980s. At first, countries simply shifted resources from one...