Higher growth is imperative for Latin America and the Caribbean. The region, one of the most unequal regions in the world, has experienced a decade of weak growth that prevents it from adequately addressing development challenges. This year will end with an expansion of their economies of 2.2% and in 2024 it is estimated to reach only 1.9%. These unambitious personalities worry their leaders. This came on Friday at the launch of the report Latin America Economic Prospects 2023: Investing for Sustainable DevelopmentThis is at the headquarters of the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile.
This document is the result of joint work carried out by the Latin American and Caribbean Development Bank, the Organization for Economic Co-operation and Development (OECD), the Economic Commission for Latin America and the Caribbean (ECLAC) and the European Commission. It proposes an action program to encourage investment, support growth, create more formal employment opportunities and progress towards sustainable development in Latin America and the Caribbean.
Fernando Carrillo, vice president of Grupo PRISA, the publishing company of EL PAÍS newspaper, said that in addition to economic challenges, the region also faces important political challenges. Among them, he noted the importance of deepening democracies in the region by encouraging elements of greater participation. “We are talking about how to combat disillusionment with democracy that has opened an authoritarian siege, we are talking about how to achieve a new social contract and a joint fight against corruption where the silver lining is social dialogue. It seems to me that we should be talking about the need to regain those spaces that we have lost in the field of latin america.
The meeting was opened by the recently inaugurated President of Ecuador, Daniel Noboa, who stated, through a recorded video, that one of the challenges facing his country is to generate greater attractiveness for public and private investments that allow for the generation of more and better jobs and better business opportunities. Drive sustainable growth. “We cannot continue to repeat the policy of the past and expect a different result,” he said. Then it was the turn of Matthias Cormann, Secretary-General of the Organization for Economic Co-operation and Development, who also called, via video, for harnessing the region’s resources, such as lithium, copper and nickel, to advance sustainable development. Energy transformation and attracting investments.
After these interventions, the Secretary-General of the Economic Commission for Latin America and the Caribbean, José Manuel Salazar-Zerenach, took the floor, providing a brief summary of the report and listing the problems facing the region, such as low growth rates. “Low growth is not temporary. In the decade between 2014 and 2024, we will have growth of only 0.8%, which is even lower than the lost decade of the 1980s.” Likewise, he explained that productivity is stagnant, and that although the labor market has managed to recover to pre-pandemic levels, two-thirds of the population still depends on informal employment, and there are 181 million people living in poverty and 70 million people living in poverty. A state of extreme poverty.
He said: “Latin America represents a significant lag in investment, investing 20% of GDP, which is lower than developing countries in the rest of the world and much lower than Asia, which invests 39% of GDP.” In this scenario, he pointed out, it is important to increase investment through productive bets. “At ECLAC, we have proposed 14 potentially dynamic sectors, which we have grouped in this report into four broad areas: green transition, digital transformation, health and care economy, and sustainable agriculture and food systems,” he said.
Director of the Development Center of the Organization for Economic Co-operation and Development, Ragnjær Elin Arnadóttir, complemented these statements and mentioned the importance of creating physical and human capital in the region, especially in industries with the greatest ability to create jobs such as manufacturing and renewable energies. Then, the representative of the African Development Bank for Latin America and the Caribbean, Julian Suarez Migliozzi, spoke about the role of financial institutions, especially development banks, to benefit from these challenges in seeking to support small and micro enterprises. and medium-sized companies, as well as to support strategic sectors of various economies in the region. In this sense, he also highlighted the progress made in the sustainability-linked thematic bond market. He stressed that “this type of instrument is witnessing growth, and in the context of the issues witnessed by the region, 22% of the total public bond issuances in 2022 were related to these thematic bonds and there is room to move forward.”
For his part, Eyot Sandker, Head of Cooperation at the European Union Delegation to Chile, highlighted the progress made on Europe’s agenda with countries in the region such as the Advanced Framework Agreement signed this week between Chile and the European Union in 2018. Brussels, which is working to update the Association Agreement In operation since 2003.
After a round of applause for the report’s presenters, a panel discussion was held in which leaders from various countries and organizations presented their views on the current situation in the region and ways to move forward towards sustainable development.
Jorge Iván González, Minister Director of Colombia’s National Planning Department, called for adapting global finances to meet sustainable challenges, while João Rossi, Director of International Organizations at Brazil’s Ministry of Planning and Budget, spoke about how to formulate the organization’s presidency. The G20, today in Brazilian hands, with a regional development agenda based on sustainability. In turn, Carla Flores, Director of InvestChile, spoke about the contribution of foreign investment, which today amounts to 8% of Chile’s GDP. The authority also explained that 30% of formal jobs in the country today are created by foreign companies, and that their salaries are 39% higher than the national average.
Exhibitors include Roberto Muñoz Laporte, CEO of Telefónica Chile; Javier Díaz Fajardo, Co-Chair of the International Development Finance Club; Andrea Costafreda, Program Director for Latin America and the Caribbean at Oxfam Intermon, and María Teresa Ruiz Tagle, Executive Director of Business Leaders for Climate Action, who explored the idea of progressing towards environmental, social and governance challenges and tapping into the region’s potential to lead a new development model from Latin America. To the world.
