By Andres Oppenheimer

A key United Nations think tank that has been very bullish about Latin America in recent years is sounding a little less optimistic about the region's economies for 2012. As we have been cautioning in this column for some time now, the fiesta may be over.

According to a new study by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC), the region's economies grew by 4.3 percent in 2011, and are projected to grow by 3.7 percent in 2012. Not bad, but not great either.

In its annual Preliminary Overview report released Wednesday, ECLAC made the following forecasts for the coming year:

- Argentina's Gross Domestic Product (GDP) grew 9 percent this year, and is likely to slow down to 4.8 percent in 2012.

- Brazil's economy grew by 2.9 percent this year, and is projected to grow by 3.5 percent in 2012.

- Chile's economy grew by 6.3 percent this year, and is likely to grow by 4.2 percent in 2012.

- Colombia's economy grew by 5.5 percent this year, and is expected to grow by 4.5 percent in 2012.

- Cuba's economy grew by 2.5 percent this year, and is expected to grow by the same percentage in 2012.

- Ecuador's economy grew by 8 percent this year, and is likely to grow by 5 percent in 2012.

- Haiti, which grew by 4.5 percent this year, is likely to grow by 8 percent in 2012.

- Mexico's economy, which grew by 4 percent this year, is expected to grow by 3.3 percent in 2012.

- Panama's economy is likely to slow down from 10.5 percent this year to 6.5 percent in 2012.

- Peru's economic growth is projected to slow down from 7 percent this year, to 5 percent in 2012.

- Venezuela's economy, which grew by 4.2 percent this year, is likely to grow by 3 percent in 2012.

According to the report, Latin America's economic growth may slow down even more than currently projected if Europe's financial crisis worsens.

ECLAC's new estimate is in sharp contrast with claims by several Latin American leaders in recent months that their countries were immune to effects of the 2008 crisis in the United States and Europe.

High international commodity prices, triggered by rising purchases by China and India, had created a feeling of triumphalism in several South American capitals. Even Standard and Poor's, the credit rating agency, echoed such optimism in a webcast early this year that suggested that 2011 could mark "the dawn of the Latin American decade."

My opinion: By itself, the slight decline in ECLAC's projections for next year's economic growth in the region shouldn't be cause for alarm. The region's economies, although they are beginning to lose steam, will keep growing at higher rates than the industrialized world.

What's much more worrying, frustrating, and ominous, is that with a few exceptions -- such as Chile, and to some extent Brazil -- most South American countries have been wasting their commodity exports bonanza in a consumption fiesta. Instead, they should be using their extra income to improve their disastrous education standards and become more competitive in the global economy.

We're living in a global knowledge economy, where small countries like Singapore, which have no natural resources, have much higher per capita incomes than commodity-rich countries, thanks to their obsession with raising education standards. And by virtually all measures -- including the PISA tests of 15 year old students -- South American countries are lagging increasingly farther behind.

It's time for international economic research groups to change their measuring standards, and create a new measurement that could be called the Gross Education Product (GEP) that should be calculated annually alongside the existing Gross Domestic Product (GDP).

If they keep focusing just on the GDP, which measures countries' total economic activity, they will never make a long-term dent in poverty reduction, because the only way to lift people from poverty in the long run is by giving them a good quality education that will allow them to access well paying jobs.

If Latin America wants to stop being the world's most unequal region, it has to provide high-quality education to the poor.

So here's my year-end proposition for international economic think tanks: create a Gross Education Product, so that next year -- at this time -- you can give us both GDP and GEP figures. Both should go together.

The current measuring standard is too short-sighted, and leads countries to forget focusing on what matters most.


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