Latin America and the Caribbean

Transitions in development: the European Green Deal and Latin America

Development Matters Development in Transition, Latin America and the Caribbean, Reviving international co-operation , , ,

By José Antonio Sanahuja, Director, Fundación Carolina, Spain, Special Advisor for Latin America and the Caribbean to the High Representative of the European Union for Foreign Affairs and Security Policy

The response to COVID-19, the ecological transition and strategic autonomy are the three driving forces of the European Union’s (EU) broad transformative programme. This programme involves deep changes in its own social and economic development model and in its relationship with the world. It is a short-term reaction to a pandemic that has fast become a systemic crisis. But it is also the EU’s long-term response to an international context of globalisation in crisis and challenges to the international order. The future of EU-Latin America relations will be deeply affected by these transformations.  

For the EU, as for Latin America, the pandemic is a catalyst for change. This time the reaction has been quite different in terms of monetary or fiscal measures compared to the self-destructive cycle of austerity adopted in the European debt crisis. Following an immediate response from the European Central Bank, the council adopted a first range of modest financial support measures. But in July 2020 the European Council agreed on an unprecedented package of 1.8 trillion euro, including the new 2021-27 budget and the “Next Generation” recovery programme. The programme involves linking budget, new common taxes and Eurobonds, paving the way to a common treasury. Therefore, this agreement is an important federal step forward, that just six months earlier would have been unbelievable. Beyond its macroeconomic and fiscal impact, these investment instruments will also push the EU towards an ambitious shift in its development model.

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We need a new multilateralism to bring about a better post-pandemic world

Development Matters Latin America and the Caribbean, New social contract, Reviving international co-operation , ,

By Benigno Lopez, Vice President for Sectors and Knowledge, IDB

When discussing life after the pandemic, many express a longing to return to a pre-Coronavirus world. But instead of dreaming of the status quo, I hope Latin America and the Caribbean (LAC) advances towards a better and “new normal”, born under the pressures of COVID-19, and far more equitable and collaborative than before. Critically, multilaterals will need to work together more than ever to help make this happen.

Bringing about a better, post-pandemic future will not be easy. LAC has been hit hard by the crisis. According to recent estimates, the region saw a 7.4 percent contraction of GDP in 2020, with 34 million people losing their jobs and at least 40 million falling into poverty. To further complicate matters, the region grappled with pressing challenges even before the emergence of COVID-19. Economic growth and productivity have been lagging for some time. And our region is the most unequal in the world: the richest tenth of the population captures 22 times more income than the bottom tenth, while the richest 1 percent captures 21 percent of the income in the entire economy — double the average in the industrialised world.

As the pandemic spread, so have concerns over inequality. References to inequality on social networks have multiplied by 10 since March 2020, according to our own digital tracking tools.

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Ciudades sostenibles, el nuevo desafío de América Latina: El rol de la innovación y de la cooperación pública-privada

Development Matters Green transition, Latin America and the Caribbean , , ,

Por Maurizio Bezzeccheri, Director de Enel para Latinoamérica y gerente general de Enel Américas

Según datos de Naciones Unidas, la concentración media de la población mundial en zonas urbanas aumentará del 55% en 2018 hasta casi el 70% en 2050. Sin embargo, en América Latina y el Caribe a día de hoy este porcentaje ya roza el 81% de la población. Las ciudades ocupan solo el 3% de la superficie de la tierra, pero representan entre el 60% y el 80% del consumo de energía y generan el 75% de las emisiones de carbono. De ahí su importancia a la hora de impulsar la descarbonización para así hacer frente a uno de los desafíos más urgentes de nuestros tiempos: el calentamiento global. Sin duda son retos complejos que requieren de un esfuerzo conjunto público y privado y entre niveles de gobierno. Pero al mismo tiempo, nos regalan una valiosa oportunidad de avanzar en la dirección correcta, trabajando para crear ciudades sostenibles, resilientes, seguras e inclusivas.

UNA VENTANA AL FUTURO

Alrededor del mundo, nuevas ciudades están desafiando el concepto establecido de cómo opera una ciudad mediante el uso de redes digitales que entrelazan los sistemas de electricidad, agua, desechos y gas, creando una matriz unificada de operaciones urbanas y un crecimiento explosivo en el intercambio de información.

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Our top 10 blogs of 2020!

Development Matters Africa, Asia, Covid-19, Latin America and the Caribbean

In 2020 we posted 179 blogs! Here are the top 10 most read blogs of the year:

1. Landmark Supreme Court victory in Zambia: collecting millions in tax revenues and sending a message across borders

By Ignatius Mvula, Assistant Director – Mining Audit Unit, Zambia Revenue Authority, Mary Baine, Director – Tax Programmes, African Tax Administration Forum, and Ben Dickinson, Head of the Global Relations and Development Division, Centre for Tax Policy and Administration, OECD

The authors explain why a landmark Supreme Court victory in Zambia sends a message that African tax authorities are able and confident to take on and deal with complex transfer pricing transactions.

In French: Victoire historique devant la Cour suprême en Zambie : des milliards de dollars US en recettes fiscales supplémentaires et un message par-delà les frontières

2. COVID-19: consequences for international migration and development

Immigration-coronavirus

By Jason Gagnon, Development economist, OECD Development Centre

Jason Gagnon discusses how to minimise the short-term effects of the Covid-19 crisis on migrants and leverage the crisis to address the unfinished business of international co-operation on migration.

In French: COVID-19 : conséquences pour les migrations internationales et le développement

3. How China is implementing the 2030 Agenda for Sustainable Development

Photo by Robert Bye on Unsplash

By Xiheng Jiang, Vice-President of China Center for International Knowledge on Development (CIKD)

Xiheng Jiang discusses the key points of China’s Progress Report on Implementation of the 2030 Agenda for Sustainable Development (2019).

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Why we need radical democratic innovation post-COVID

Development Matters Covid-19, Latin America and the Caribbean, New social contract , ,

By Silvia Cervellini, Founder and Co-ordinator of coletivo Delibera Brasil

Although we have talked about inequality and sustainability in Brazil for a long time (we held the Rio de Janeiro Earth Summit in 1992 and the first World Social Forum in 2001 in Porto Alegre), the COVID-19 pandemic struck us in the middle of a “quasi” economic crisis, a declining Gini Index and increasing evidence of biomass destruction in Brazil’s Pantanal, Mata Atlântica and Amazonia forests.1

We have seen some consensual and immediate solutions to the different crises Brazil faces, e.g. quarantine and extra resources allocated to public health to fight the sanitary crisis; temporary financial support and food for the most vulnerable to tackle the hunger crisis; and firefighting to extinguish fires in the jungle. None of these measures, however, address the root causes of these problems, nor can they be sustained as permanent policies.

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The dramatic Latin American crisis

Development Matters Covid-19, Latin America and the Caribbean ,

By José Antonio Ocampo, Professor at Columbia University, and former UN Under-Secretary-General for Economic and Social Affairs and Finance Minister of Colombia

As we ring in the new year, the region needs a new development consensus, committed to reducing inequality, implementing stronger counter-cyclical macroeconomic policies, and spurring production and export diversification – including a major digital transformation. The consensus should accelerate a de-politicised regional integration, push the international environmental agenda forward and renew the region’s commitment to democracy.

The year 2020 closed with the worst economic crisis in Latin American history. The Economic Commission for Latin America and the Caribbean (ECLAC) has estimated that the region’s GDP fell by 7.7%. According to the International Monetary Fund (IMF), this is one of the worst crises in the world, similar to that of Western Europe and only surpassed by the one India has experienced. The projections of all international organisations and private analysts also indicate that the region’s economy will only partially recover in 2021. As economic growth during the quinquenium prior to the current crisis was close to zero, Latin America is immersed in a new lost decade, 2015-2024, which may be worse than that of the 1980s. In addition, the COVID-19 crisis deepens a long period of slow economic growth: 2.7% per year in 1990-2019 vs. 5.5% in 1950-1980. This is the poorest performance of any developing region in the world over the past three decades.

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Fiscal policy in the time of COVID-19: a new social pact for Latin America

Development Matters Covid-19, Latin America and the Caribbean, New social contract , , , ,

By Pablo Ferreri, Public Accountant and former Vice Minister of Economy and Finance of Uruguay

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

We could say that ultimately the role of government remains unchanged overtime: to achieve ever higher levels of development with the understanding that true development means achieving sustained economic growth while generating greater equity and social cohesion. This must be done through more and better exercise of civil rights and in an environmentally sustainable manner. But in achieving this ultimate goal, challenges change according to realities that governments must face.

Challenges that Latin America faced fifteen years ago, when it enjoyed high levels of growth and a commodity boom in an increasingly open world, are quite different to those that have been brought about by economic slowdown, lower international prices and new isolationist tendencies.

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Prospects for Chinese and Mexican South-South co-operation post-COVID-19

Development Matters Asia, Covid-19, Latin America and the Caribbean , , , , ,

By Denghua Zhang, former diplomat and Research Fellow at the Australian National University and Carlos Cortés Zea, Coordinator of the AMEXCID-UNDP Co-operation Programme

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The COVID-19 crisis is having profound impacts on the international political and economic order. It also provides an opportunity for stakeholders to reflect on past practices in each sector and learn from lessons to improve policies in the future. In this case, we examine the purposes, approaches and capacities of emerging providers (or Southern providers as some may call them) through the lens of China and Mexico—two major players in south-south co-operation (SSC).

Emerging providers, similar to traditional donors, provide aid to serve their own national interest. Motivations underpinning emerging providers’ efforts can vary significantly. The Chinese foreign aid programme is driven by a combination of factors including diplomatic competition with Taiwan, access to natural resources in recipient countries, image building as a responsible global power, and generating geopolitical support when its relationship with developed countries is strained. For example, China is currently taking a whole-of-government approach to conduct its COVID-19 diplomacy; an effort to improve its global image and garner support from developing countries in the face of growing pressure from developed countries over China’s handling of the crisis.  

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Adapting to the new normal: the economic impact of COVID-19 in Central America

Development Matters Covid-19, Latin America and the Caribbean, Social Protection , , , ,

By Miguel Angel Medina Fonseca, Economist at Chief Economist Office, Central American Bank for Economic Integration

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Eve Orea-shutterstock_1716207883
Photo: Eve Orea / Shutterstock

The COVID-19 pandemic is causing one of the largest economic recessions in the world’s history. In Central America, the Central American Bank for Economic Integration foresees a worst case scenario where the region’s GDP will contract by 4.9%, and public debt will increase by at least 7.6 percentage points of GDP.

The COVID-19 pandemic has prompted most governments around the globe to take preventive containment and mitigation measures, often implemented under state of emergency or similar clauses. In Central America, most policies have focused on saving people’s lives and reducing the socio-economic impact of the pandemic. Some measures stand out:
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América Latina y el Caribe en tiempos del COVID-19: no descuidar a los más vulnerables

Development Matters Covid-19, Latin America and the Caribbean, Policy, Social Protection , , , ,

Por Federico Bonaglia, Director Adjunto, Centro de Desarrollo de la OCDE, y Sebastián Nieto Parra, Jefe de la Unidad de América Latina y el Caribe, Centro de Desarrollo de la OCDE

Este artículo es parte de una serie sobre cómo abordar COVID-19 en los países en desarrollo. Visite la página específica de la OCDE para acceder a los datos, análisis y recomendaciones de la OCDE sobre los impactos sanitarios, económicos, financieros y sociales del COVID-19 en todo el mundo.

Photo by Manuel on UnsplashRead this blog in English

Las medidas de contención necesarias contra el COVID-19 han generado una crisis económica mundial sin precedentes, combinando choques por el lado de la oferta y de la demanda. Ahora, la pandemia está afectando a América Latina y el Caribe y los países se están preparando para el efecto multiplicador que tendrá en la región. Tan solo unos meses antes, a finales de 2019, muchos países de la región tuvieron una ola de protestas masivas impulsadas por un profundo descontento social, aspiraciones frustradas, vulnerabilidad persistente y creciente pobreza. Esta crisis exacerbará estos problemas.

Más allá de la magnitud del impacto en los sistemas de salud que ya son débiles (unos 125 millones de personas aún carecen de acceso a los servicios básicos de salud), el abrumador impacto socioeconómico de la crisis podría recaer desproporcionadamente en los hogares vulnerables y pobres si no se implementan respuestas ambiciosas de política. Continue reading →