UNO July 2015

Latin America at a crossroads



Latin America’s recent economic and social history is encouraging. The reactivation of growth, the recovery of macroeconomic stability, the success in the fight against poverty and development that is more balanced and fair have been significant.

A favorable international framework (due to the high prices of raw materials and food) combined with improved macroeconomic institutions and an active social policy have resulted in major achievements in terms of boosting the population’s living conditions, reducing the poverty rate by 50%, expanding the opportunities for decent employment, and allowing more women to enter the job market.

Latin America’s economic and social performance since 2000 is proof that it is possible to simultaneously work towards greater economic growth as well as greater equality, and that these goals are not irreconcilable as long as the necessary leadership and political willingness are present.

Recently, however, the international economy, and  particularly Asia’s demand for raw materials and food, has weakened. This, combined with lower oil prices, has had a negative impact on many economies in the region, primarily those of South America. This presents an increasingly complex scenario for the next few years and it will be necessary to identify new drivers for more dynamic growth, juggle the drop in growth with the population’s high expectations and demands in terms of employment and service quality, and avoid losing the progress made during the last decade in the areas of poverty and inequality. Since 2012, an increase in the number of people below the poverty line has been noted along with a standstill in the reduction of inequality indexes, which should be particularly worrisome.

Latin America’s economic and social performance since 2000 is proof that it is possible to simultaneously work towards greater economic growth as well as greater equality

Let’s review the achievements of the past few years:

In recent years, social development policy, especially the one aimed at breaking the intergenerational transmission of poverty, gained importance.

Between 2000 and 2012, the per capita investment in this category grew nearly 7% each year. When measured in terms of the GDP, social expenditures for health, education, security and social welfare or housing increased from 14.5% to 18.4%. In terms of basic education, the primary enrolment rate was 94% in 2014, and the secondary enrolment rate increased from 60.5% to 73% between 2000 and 2014.

Higher education showed tremendous growth, which is reflected by the fact that 70% of university students are the first generation of their families to reach this level of education.

These are just some of the figures that are behind the changing social map of our region, which now has 60 million fewer people in poverty and 82 million Latin Americans who joined the middle classes. In countries such as Argentina, El Salvador, Mexico, Nicaragua and the Dominican Republic, this redistribution was responsible for more than half of the drop in poverty.

02However, despite efforts, between 25% and 28% of the population remains in poverty, and although this number is far below the 40% statistic of the 1990s, it is still too high for the region’s level of income. In addition, although 37% of the population is no longer in poverty, it remains in an extremely vulnerable situation and therefore cannot be considered part of the middle class. Most of these individuals have no social protections and they face the constant risk of falling back into poverty.

There is no doubt that the deteriorated external conditions and the economic slowdown are being faced with a stronger foundation than in the past, but we have also been “caught” with unfinished tasks in terms of social and production aspects.

The productivity of Latin American economies has straggled behind those of Asian countries, along with investments in science, technology and infrastructures. The establishment of small and medium-sized companies in value chains and in export efforts requires a new generation of production policies that are focused on entrepreneurship, talent and innovation, and that add value to everything that is produced in the primary, services or industrial sectors. This is the only way to firmly enter the knowledge economy. The quality of education is essential for the economy as well as to fight against inequality and to avoid the intergenerational transmission of inequality.

It is important to remember that Latin America is still one of the most unequal regions in the world. These inequalities appear in the distribution of income as well as in groups that experience discrimination or marginalisation, as in the case of the gender gap, the rural-urban gap, and the gap that affects the afro descendant and indigenous populations.

Therefore, the direction that is taken at our current crossroads will be decisive.

The quality of education is essential for the economy as well as to fight against inequality

The Ibero-American General Secretariat focuses its work on continuing to build over what has been achieved after ten years of intense Ibero-American cooperation and on carrying out the orders received from countries. It is aimed at promoting culture, innovation, education and social cohesion as the backbone of the Ibero-American world and working on what unites us instead of what divides us. We are firmly committed to young pe
ople –their training, mobility and improving their skills– as well as a common culture, which is an asset for the Ibero-American world and a fundamental factor in human development that is more inclusive and sustainable.

We will support an ambitious alliance for academic mobility in Ibero-America that is aimed at students, professors and researchers in order to promote exchanges and mutual learning as well as equal opportunities through the educational experiences that are gained when studying abroad. This will require the participation of the public and private entities involved in this ambitious project.
We will also support cultural and digital culture projects as well as the creation of an Ibero-American television channel aimed at opening a window to the Ibero-American world that all of our societies may use.

We firmly believe in the contributions we can make from a renewed and dynamic Ibero-American General Secretariat that looks ahead. We will work with the community of Ibero-American countries towards the future we want to build together and provide specific results for our citizens.

Rebeca Grynspan
Ibero-American Secretary General
Economist and former Vice President of Costa Rica, Ms. Grynspan was unanimously appointed as Ibero-American Secretary General on February 24, 2014 in Mexico City. Prior to her designation, she worked as Deputy Secretary General of the United Nations and Associate Administrator of the United Nations Development Program (UNDP). From 2006 to 2010, Ms. Grynspan was the UN Assistant Secretary General and Regional Director for Latin America and the Caribbean, UNDP. Previously, she worked as Director of Subregional Headquarters of the United Nations Economic Commission for Latin American and the Caribbean (ECLAC) in Mexico and Vice President of Costa Rica from 1994 to 1998. @RGrynspan [Costa Rica]

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