Higher growth is essential for Latin America and the Caribbean. The region, one of the most unequal regions in the world, has endured a decade of weak growth that prevents it from adequately addressing its development challenges. This year will end with economic growth of 2.2% and in 2024 it is estimated that this will only be 1.9%. The unambitious numbers worry their leaders. This was stated this Friday at the presentation of the report “Latin American Economic Outlook 2023: Investing for sustainable development”, which took place at the headquarters of the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile.
The document is the result of joint work between the CAF Development Bank for Latin America and the Caribbean, the Organization for Economic Cooperation and Development (OECD), the Economic Commission for Latin America and the Caribbean (ECLAC) and the European Commission. It proposes a work agenda to promote investment, support growth, create more formal jobs and advance sustainable development in Latin America and the Caribbean.
Some of the participants in the release of the report “Latin American Economic Outlook 2023: Investing for sustainable development”. CRISTIAN SOTO QUIROZ
Fernando Carrillo, vice president of Grupo PRISA, the publisher of EL PAÍS, said that in addition to economic challenges, the region also faces major political challenges. Among other things, he mentioned the importance of deepening democracies in the region by promoting elements of greater participation. “We are talking about how to combat the disillusionment with democracy that has opened an authoritarian siege, and we are talking about how to achieve a new social contract and a common fight against corruption, in which social dialogue is the silver bullet. “It seems to me that we should talk about the need to recover the spaces lost in Latin America,” analyzed Carrillo.
The meeting was opened by the recently inaugurated President of Ecuador, Daniel Noboa, who mentioned in a recorded video that one of his country's challenges is to create more attractiveness for public-private investments that allow the creation of more and better Enabling jobs to drive sustainable growth. “We cannot continue to repeat the policies 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 (OECD), who also made a video call for using the region's resources such as lithium, copper and nickel to advance development, promote energy transition and attract investment .
After these contributions, the Secretary General of ECLAC, José Manuel Salazar-Xirinachs, took the floor, giving a brief summary of the report and listing the problems facing the region, such as low growth rates. “The low growth is not temporary. “In the decade between 2014 and 2024 we will have growth of just 0.8%, even less than the lost decade of the 1980s,” he noted. Likewise, he explained that productivity is stagnating and that although the labor market has returned to pre-pandemic levels, two-thirds of the population still depends on informal employment and 181 million people are in poverty and 70 million are in poverty. situation of extreme poverty.
José Manuel Salazar-Xirinachs, Executive Secretary of the United Nations Economic Commission for Latin America and the Caribbean, during the presentation of the report. CRISTIAN SOTO QUIROZ
“Latin America has a significant investment gap, investing 20% of GDP, a figure lower than that of developing countries in the rest of the world and well below Asia, where 39% of GDP is invested,” he said. In this scenario, he pointed out that it is crucial to increase investments 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.
OECD Development Center Director Ragnheiður Elín Árnadóttir complemented this data and mentioned the importance of creating physical and human capital in the region, especially in sectors with greater job creation capacity such as manufacturing and renewable energy. Then, the representative of the CAF Development Bank for Latin America and the Caribbean in Chile, Julián Suárez Migliozzi, spoke about the role of financial institutions, especially development banks, in addressing these challenges in supporting micro, micro and medium-sized enterprises, as well as in supporting strategic sectors of the region's various economies. In this sense, he also highlighted the progress of the thematic bond market related to sustainability. “This type of instruments has increased in the context of issuances in the region, 22% of the total public bond issuances in 2022 were related to these thematic bonds and there is room for the future,” he emphasized.
Ragnheiður Elín Árnadóttir, Director of the OECD Development Center, in Santiago this Friday. CRISTIAN SOTO QUIROZ
For his part, Ewout Sandker, Head of Cooperation of the European Union Delegation to Chile (EU), highlighted the progress on the European agenda with countries in the region, such as the advanced framework agreement signed this week between Chile and the European Union Brussels, which is modernizing the Association Agreement, which has been in force since 2003.
After a round of applause for the report's speakers, a panel discussion took place in which leaders from different countries and organizations presented their views on the current situation in the region and the paths for sustainable development.
Jorge Iván González, Ministerial Director of Colombia's National Planning Department, called for adapting global finance to sustainable challenges, while João Rossi, Director of International Organizations at the Brazilian Ministry of Planning and Budget, spoke about how to formulate the Colombian government's presidency of the G20, today in Brazilian hands, with a regional development agenda based on sustainability. Karla Flores, Director of InvestChile, in turn reported on the contribution of foreign investment, which today represents 8% of Chile's GDP. The authority also stated that today 30% of formal jobs in the country are created by foreign companies and their salaries are 39% higher than the national average.
Fernando Carrillo, First Vice President of the PRISA Board, during the release of the report. CRISTIAN SOTO QUIROZ
Among the exhibitors were Roberto Muñoz Laporte, CEO of Telefónica Chile; Javier Díaz Fajardo, co-president of the International Development Finance Club; Andrea Costafreda, Program Director for Latin America and the Caribbean of Oxfam Intermón, and María Teresa Ruiz-Tagle, Executive Director of Business Leaders for Climate Action, who explored the idea of addressing and emerging from environmental, social and governance challenges To take advantage of the region's potential to bring a new development model from Latin America to the world.