"Things are bad but we're doing well." So former Argentine president Carlos Menem liked to say, just before his country plummeted into its worst financial meltdown seven years ago.

Latin America's leaders appear to be slow learners. As finance ministers emerged from crisis talks in Brasilia yesterday [Monday], Venezuela's parliamentarians voted themselves a 42% pay increase.

Yet the region's stock markets are tumbling, international finance is drying up, currencies are depreciating and jobs are under threat. Latin America's 579 million people have good reason to fear the worst.

"Latin America's presidents are trying to reassure their people, but the global slowdown is already being felt," says Lynne Walker, vice-president of the Institute of Americas, a Washington-based think-tank.

In Brazil, the region's largest economy, the value of the local Bovespa stock exchange has halved this year, while the currency has fallen more than 30% against the US dollar.