The world needs structural reforms, warns Mohamed El-Erian

Bnamericas Published: Friday, May 27, 2016
The world needs structural reforms, warns Mohamed El-Erian

The elusive quest for inclusive growth explains why the European Central Bank and the Bank of Japan set negative policy rates, why the US Fed is accused of being "inconsistent," and why traditionally well-managed economies are making more policy mistakes, said legendary bond investor Mohamed El-Erian on Thursday.

Since 2008 the world has over-relied on central banks, but these financial institutions do not invest in infrastructure or solve any structural economic problems, the chef advisor of Allianz, and former executive director at Pimco, said at the LatAm Focus 2016 conference hosted by BGT Pactual in Santiago.

Instead of carrying out much needed structural reforms to face a prolonged period of stagnation, governments have interpreted the current low growth scenario as part of an economic cycle, El-Erian added.

Most economies have arrived to a point where there are only two alternatives going forward: achieve high and inclusive growth, or continuing down the low growth path, he said.

Among other recommendations to investors, El-Erian suggested keeping an eye on "good names trading at really cheap levels," and not relying on diversification as the sole approach to mitigate risk.​

Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects

Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.

  • Project: Plata Verde
  • Current stage: Blurred
  • Updated: 15 hours ago
  • Project: Vizcachitas
  • Current stage: Blurred
  • Updated: 15 hours ago
  • Project: Cerro Blanco
  • Current stage: Blurred
  • Updated: 14 hours ago

Other companies

Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.

  • Company: Sociedad Química y Minera de Chile S.A.  (SQM)
  • Sociedad Química y Minera de Chile S.A. (SQM) is a Santiago-based non-metallic miner engaged in the production and distribution of specialty fertilizers. The company operates in...
  • Company: Pomagalski S.A.  (Poma)
  • Pomagalski S.A. (Poma) is a French group engaged in the design, building, installation of transportation systems for specific industries, with a special focus on ropeway systems...
  • Company: Cordoba Minerals Corp.  (Cordoba Minerals)
  • Cordoba Minerals Corp. is a Toronto-based resource exploration company focused on the acquisition, exploration, and development of precious and base metal properties. The firm i...