The OECD (Organisation for Economic Cooperation and Development) has just published its first Latin America Economic Outlook. Although an increasingly important player in the world economy, Latin America will, nevertheless, have to undertake further economic reforms to improve its prosperity, the study says. Despite the region's potential, the two best performing economies, those of Mexico and Brazil, are losing ground to their Asian competitors. Over the last ten years, China and India have enjoyed average annual economic growth of 9% and 7%, compared with only 3.5% and 2.5% respectively for Mexico and Brazil. With more than 200 million people, or almost 40% of the population living in poverty, the region is also the one with the greatest inequality in the world. Speeding up economic growth will certainly help to increase budget revenue, but the countries of the region will have to spend this revenue more effectively and more fairly to reduce poverty and retain people's confidence in democracy. The report addresses four major areas: policy coherence for development (improving fiscal policy); finance for development (pension reform); business for development (investment and telecommunications); trade for development (growing trade with China and India). The OECD has also just published a report “Chile: OECD Reviews of innovation policy”. To sustain its economic growth, Chile will have to invest more heavily in research and development (R&D), improve its education system, foster public-private partnerships and encourage innovation in the business sector, particularly among small and medium-sized enterprises, the report states. Chilean investment in R&D, as a percentage of GDP, is far below the average for OECD countries: 0.67% in 2004, compared with an OECD average of 2.25%.