Category: Latin America and the Caribbean

Development finance, Green transition, Latin America and the Caribbean, SDGs

Bridging the green investment gap in Latin America: what role for national development finance institutions?

By Maria Netto, Lead Capital Markets and Financial Institutions Specialist, Inter-American Development Bank, and Naeeda Crishna Morgado, Policy Analyst – Green Growth and Investment, OECD              

Green-investmentThe developing world urgently needs more and better infrastructure. Affordable and accessible water supply systems, electricity grids, power plants and transport networks are critical to reducing poverty and ensuring economic growth. The way new infrastructure is built over the next 10 years will determine if we meet the Sustainable Development Goal (SDGs) and the Paris Agreement objectives. Considering the long lifespan of most infrastructure projects, the decisions developing countries make about how they build infrastructure are critical: we can either lock-in carbon intensive and polluting forms of infrastructure, or ‘leap frog’ towards more sustainable pathways.

Many countries in Latin America are making this shift: thirty-two of them have committed to cut their emissions and improve the climate resilience of their economies, in infrastructure and other sectors, through Nationally Determined Contributions (NDCs). The cost is estimated at a staggering USD 80 billion per year over the next decade, roughly three times what these countries currently spend on climate-related activities. What is more, this is in addition to a wide investment gap for delivering development projects and infrastructure overall – the World Bank estimates that  countries in Latin America spend the least on infrastructure among developing regions in the world.
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Gender, Women and Girls, Latin America and the Caribbean, Youth

Reimagining job-oriented education to give youth the chance of a better future

 By Mariana Costa, Co-founder and CEO of Laboratoria

 To find out more on youth and inclusive development, go to the 2017 International Economic Forum on Latin America and the Caribbean website

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Laboratoria graduates. Photo credit: the Laboratoria website

Receiving quality higher education in Latin America is still a privilege, with two-thirds of youth in the region lacking advanced technical, professional and management skills. Despite their limited access, acquiring these valuable skills is still the main vehicle to a career. The consequences are not minor. According to OECD data, 21% of youth are not working or studying, and another 19% are working in the informal economy. All of them face limited opportunities to fulfil or even discover their potential. A better way must be found to give the region’s young talent a path to professional growth.

A few years ago, I started a web development company in Lima, Peru. In the process of building our team of software developers, my partners and I discovered what appeared to be a loophole in the system. Most of these coding professionals, making competitive salaries and facing endless opportunities for career growth, did not have a fancy degree from a renowned university. They were self-taught developers, university dropouts or computer engineering graduates from obscure technical institutes. Despite the lack of a degree, they were doing great. And they were not the only ones. According to Stack Overflow’s 2016 survey, 56% of developers do not have a college degree in computer science or related fields. In tech, the key to a high paying job often has more to do with what you can build than where you studied.

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Development Matters
Latin America and the Caribbean, New social contract

Informal is normal in Latin America: taxes matter

By Juan Carlos Benítez, Economist at the Latin American and Caribbean Unit, and Angel Melguizo, Head of the Latin American and Caribbean Unit, at the Organisation for Economic Co-operation and Development (OECD)

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Informality equals vulnerability. In emerging economies and particularly in Latin America, informal is normal. On average, 55% of workers in the region did not contribute to pension or healthcare programmes in 2013. Although informality rates vary significantly across countries (Figure 1), a common feature of informality is its large prevalence amongst the poor and low-middle income workers (e.g. Jutting and De Laiglesia, 2009). On average, 85% and 73% of households in the lowest earning quintiles do not have any member contributing to social security schemes. Furthermore, informality is “one of the most striking differences, within the middle sectors, between the vulnerable population and the consolidated middle class” (Lustig and Melguizo, 2015).

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Development Matters
Latin America and the Caribbean

Instituciones, Gobernabilidad y Desarrollo

Por Danilo Astori, Ministro de Economía y Finanzas de  Uruguay

En la reflexión y la acción acerca de los caminos que conducen a niveles cada vez más altos de desarrollo económico y social, la cadena que nace en las fortalezas institucionales de la sociedad, e incluye como eslabones a la transparencia, la rendición de cuentas y la gobernabilidad, asume una importancia crucial. En tiempos como los actuales, en los que la volatilidad y la incertidumbre, así como los problemas de gobernanza afectan al mundo en su conjunto, es relevante detenerse a examinar el papel a jugar por los conceptos antes señalados.
Es claro que el que refiere al desarrollo económico y social de una sociedad se encuentra íntimamente asociado al de proyecto nacional, entendiendo por tal el que se define como una verdadera cuestión de Estado, definida y ubicada por encima de los partidos políticos y otras organizaciones sociales, así como la de la alternancia de unos y otras en el poder. Continue reading “Instituciones, Gobernabilidad y Desarrollo”

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Latin America and the Caribbean, SDGs

Partnering with philanthropy to optimise a country’s resources: Mexico’s case

By Emilie Romon of the OECD Development Centre’s Global Network of Foundations Working for Development (netFWD)

The Government of Mexico is stepping up its engagement with its philanthropic sector. Three factors fuel this decision. First, the share of official development assistance to middle-income countries, such as Mexico, is expected to significantly decrease in coming years. In 2014, the donor community decided to increase support for least-developed and fragile states rather than middle-income countries.

This means Mexico is exploring new ways to optimise all available public and private resources for development. Second, the Sustainable Development Goals (SDGs) endorsed in 2015 call for public and private actors to better pool and co-ordinate their resources if they are to achieve the goals. And third, as the co-chair of the Global Partnership for Effective Development Co-operation, which promotes multi-stakeholder partnerships with foundations and other non-state actors, Mexico wants to lead by example. Indeed, Mexico’s move towards its domestic philanthropic sector could not be more timely. Continue reading “Partnering with philanthropy to optimise a country’s resources: Mexico’s case”

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Latin America and the Caribbean

EU-Latin America: Post-Occidental relationship?

By Benita Ferrero-Waldner, Former EU Commissioner for External Relations and Neighbourhood Policy, Former Foreign Minister of Austria and former President of the EU-LAC Foundation

Today more than ever, the European Union and Latin America face the opportunity to advance a post-Occidental partnership. Already, the two regions share the same culture, speak the same language in part and promote the same values and principles enshrined in democracy, the rule of law, human dignity and peace. Such mutual bi-regional respect and tolerance serve as a clear counter-ideology to the surge of extremism and religious fanaticism that we see.

Alain Rouquié, academic, Latin America expert and former French ambassador to Brazil, referred to Latin America as Europe’s “Far West.” Yet, the many changes in the relationship between the European Union and Latin America no longer reflect this definition of the “West.” Thus, building a new enhanced post-Occidental strategic partnership is timely. Indeed, Europe and Latin America could be much stronger allies, politically, socially and economically. What does this mean in concrete terms? Continue reading “EU-Latin America: Post-Occidental relationship?”

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Latin America and the Caribbean, New social contract

How middle class are middle-income households in Latin America?

By Ángel Melguizo (OECD Development Centre) and Nora Lustig (Tulane University)

On labour informality and its causes

 One of the most important achievements of the recent period of economic expansion in Latin America has been the substantial reduction of poverty and the surge of an emerging middle class. According to World Bank estimates (Ferreira et al, 2013), in 2009 the Latin American population with a daily income of between 4 and 50 dollars a day (in parity of purchasing power) represents 68% in the region today, compared with 29% who still are moderate poverty. These ‘middle sectors’ are composed of 38% belonging to a vulnerable population, which has between 4 and 10 dollars a day, and 30% middle class, between 10 and 50 dollars. Continue reading “How middle class are middle-income households in Latin America?”

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Asia, Latin America and the Caribbean

Hacia una nueva asociación América Latina y China

Por Mario Pezzini, el ex Director del Centro de Desarrollo de la OCDE y Angel Melguizo, el ex jefe de la Unidad de América Latina y el Caribe del Centro de Desarrollo de la OCDE

América Latina y China han protagonizado un auge comercial impresionante en los últimos 15 años. Los flujos comerciales entre ellos se han multiplicado 22 veces, mucho más que con la Organización para la Cooperación y Desarrollo Económicos (OCDE) – dos veces – la Unión Europea -tres veces- ó Estados Unidos -dos veces. China es hoy el principal socio comercial de Brasil, Chile y Perú. China ha aumentado su participación en cadenas globales de valor de América Latina. Está más integrada en las cadenas de valor con China que a nivel regional. Sin embargo, hoy los vínculos entre América Latina y China están tomando un nuevo rumbo, planteando nuevos desafíos y abriendo oportunidades.

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Latin America and the Caribbean

La paradoja latina: un ejemplo del enfoque de la OCDE hacia el bienestar


Por Mario Pezzini, el ex Director del Centre de Desarrollo de la OCDE y Martine Durand, la ex Directora y Jefa de Estadística en le Dirección de Estadística de la OCDE

La evaluación del desarrollo implica más que la valoración del PIB, y abarca muchos otros aspectos de la vida de las personas. Dichos aspectos varían de un país a otro, reflejando así diferencias históricas, valores sociales e instituciones. En Bután por ejemplo, el concepto de Felicidad Nacional Bruta está firmemente anclado en la formulación de políticas desde los años setentas, el cual se enfoca en la preservación del medio ambiente, la cultura, el desarrollo socioeconómico sostenible y equitativo así como el buen gobierno. Ecuador, por su parte, incorporó la filosofía indígena del Buen Vivir en su Constitución de 2008, la cual hace hincapié en el papel de la comunidad y del medio ambiente en la formación de la vida de las personas.

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Building resilience, Development finance, Latin America and the Caribbean

How the private sector can advance development

By Lorenzo Pavone, OECD Development Centre EMnet Co-ordinator; Kate Eklin, Policy Analyst; Myriam Grégoire-Zawilski, Programme Assistant; Josep Casas, Trainee

The Millennium Development Goals (MDGs) launched in 2000 centred on addressing basic human needs throughout the developing world. The recently adopted Sustainable Development Goals (SDGs) for the post-2015 era focus on economic growth, social inclusion and environmental protection as interconnected dimensions of broader global development. Unlike the MDGs, achieving this new set of ambitious goals calls for bolder action from diverse actors across society, whose collective efforts outweigh what they could deliver individually. And the private sector is not least among these actors. Why? Business-led initiatives, such as research and development partnerships, knowledge-sharing platforms, technology and skills transfer, and infrastructure investment have the potential to kick-start development, enable productivity gains, generate better quality jobs, strengthen skills and promote technological advances. Continue reading “How the private sector can advance development”

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