Two years after the outbreak of the international financial crisis, Latin America and the Caribbean are still suffering from its effects. The region’s economic growth rate has decreased across the board and will probably stagnate into a recession by the end of 1999, external financing has become scarce and expensive and the region’s external vulnerability has been confirmed once again.

Latin America and the Caribbean must also face the fact that the economic liberalization and institutional modernization policies they began implementing in the 1980’s have not made them immune to financial crises transmitted through the current international system.

This issue of CAPITULOS examines the effects on the region of the financial crisis that began in July 1997 in Thailand and spread to Russia in August 1998 and then to Brazil by the end of that year. It considers as well some of the discussions concerning the design of a new international financial architecture in which the countries of the region may play an active role. To this end, we have included the final communique issued by the high level regional meeting held in Mexico at the beginning of September and submitted to the consideration of the United Nations’ Secretary General. The document presents a number of recomendations aimed at contributing to the establishment of a stable and predictable international financial system concerned with countries’ social development. Finally, we examine the future of our region’s relations with Asian countries and the conflicts that have erupted within MERCOSUR due to the "samba" effect.

The crisis we are facing, at the beginning of a new millennium, also causes us to reflect on the development models our region has chosen to implement during recent years and on their prospects for the next decade; their viability in relation to the globalization process that characterizes the world economy and the limitations imposed by a merely unidimensional analysis of a complex phenomenon such as economic activity, one that involves cultural, sociological and political factors.

As a contribution to the examination of this central issue we present , as well, the document Globalization with Development prepared by SELA’s Permanent Secretariat in view of the UNCTAD X meeting to be held next year in Thailand. In it, a number of issues are discussed that could contribute to a definition of the region’s development agenda as well as of the role UNCTAD could play in this regard. The suggestions included in this document are based on the belief that the region does have room for maneuver to define its own development strategies centered on positive action vis-á-vis globalization.

We also include an article in which the power of states is measured by mathematical formula. According to the authors, this type of indicators could become an indispensable tool for the analysis of international relations.

Finally, our Documents section includes the full text of the declarations issued by the Presidents and Heads of State and Government at the Latin America and Caribbean - European Union Summit.

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