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There is no single solution to the effects of the financial crisis on middle-income countries, but introducing fundamental labor market reforms to create high-paying jobs will be the key to restarting economic growth, according to a report by Alejandro Foxley, the former foreign and finance minister of Chile.

Labor reform is always politically contentious, but the current crisis, by illustrating the dangers of ignoring necessary long-term reforms, has made it easier to reach consensus on the need for action. If policy makers undertake the right reforms, middle-income countries could achieve higher growth, better standards of living, and more effective government.