5. The Changing Problem of Regional Development Finance in Latin America

By the turn of twenty-first century, LA countries—South American ones, especially—were benefited by a “commodity boom”, which brought vast political and economic adjustments. One of the issues the mentioned process altered was development financing, as economies were lift now from constraints imposed in the past. During the surge of commodity prices, South American governments envisioned a new type of development financing paradigm, based on an “endogenous” and/or “autonomist” perspective. Additionally, the rise of the People’s Republic of China (PRC) as an emerging power provided new resources to the sub-region countries. Financing necessities were unconsidered during the apogee of these international processes. However, the downturn of commodity prices, the deceleration of Chinese economy, and the persistence of low savings ratio re-installed the issue of development financing gaps in policy-maker circles. This chapter aims to evaluate the old and new challenges imposed by external development financing.