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Latin America at a crossroads: Is sustainable and inclusive growth possible in the region?

25 June 2012

Mary Tere Guzmán

Latin America faces great challenges for its development: the type of challenges that have been addressed at Rio+20.  The size and diversification of the region’s economy make it especially relevant at the world level.  The economic and environmental impacts of Latin American politics are potentially enormous.

In the final stages of the summit, the Inter-American Development Bank (IDB) organized a discussion, Sustainable and inclusive growth for Latin America and the Caribbean.  Luis Alberto Moreno, IDB president, led the debate that tried to tackle the main challenges for development and growth in the region.

Luis Alberto Moreno

Concern over climate change and its effects in the region – especially on its impoverished populations – emerged as central problem.  Latin America economies are highly dependent on agricultural and raw material exports, making it vulnerable to droughts, floods, hurricanes, and other extreme weather events.  According to the IDB, global warming could cost US$ 100,000 million per year to Latin American nations.  The remaining question is how investment can help reduce these potential threats and stimulate innovative solutions towards a low-carbon economy.

But there is a second challenge for Latin America: sustainable and inclusive growth for all.  The growing wealth gap reflects both a growing economic disparity and a dangerous social polarization.  Latin America stands as one of the most unequal regions in the world.  Economic and social indicators in countries such as Peru, Brazil or Colombia show that this is an economically dynamic region where, however, wealth is not properly distributed.

A third challenge for the region is related to the previously mentioned need of moving away from the raw material export economy.  Investments in capacity building, infrastructure, and technology are also encouraged.  Likewise, the importance of natural resource governance and biological diversity conservation was also identified as key issues for the region.

Although these are all regional threats, every nation has its particular challenges and opportunities.  It is hard to talk about Latin America as a whole; differences between countries are enormous and have to be acknowledged.  Different national starting points require different policies.

Frank Pearl

Along these lines, Frank Pearl, Colombian Environment and Sustainable Development Minister, argued that Sustainable Development Goals (SDGs) have to be included in any declaration coming out of the summit.  The Government of Colombia, he said, has paid special attention to the “territory” as the key unit for local and regional development.  The territory is the space for investment in capability building, natural conservation, research, and commerce.

Frank Pearl’s intervention showed that very different strategies are at work in Latin America.  Countries such as Bolivia and Ecuador have focused on “El Buen Vivir” and other indigenous worldviews as development models.  On the other hand, Brazil, Colombia, or Mexico also include indigenous views as part of their political discourse while supporting, in practice, a growth-based economic model reliant on natural resources exploitation with no visible transition towards a more sustainable model.  The whole region is at a crossroads: either unsustainable growth or inclusive and equitable development.

And last but not least, it is worth noting that some very important issues were absent from the debate: dysfunctional democracies, growing violence, and migration are region-wide phenomena that deserve more detailed attention.  These three issues are also highly relevant for the region and seem to be sidetracked from the debates on development by most Latin American governments.

Ms Mary Tere Guzmán works Alboan, a Jesuit NGO in Loyola Province, Spain that promotes development cooperation through education and training, policy support, and strengthening the social transformation of organizations engaged in development work.

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