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.Continue reading