IDB: lack of trust limits socioeconomic growth in Latin America

The lack of trust in governments, companies, unions and people limits the socioeconomic growth of Latin America, warned the Inter-American Development Bank (IDB) through a recent report called “Trust: the key to social cohesion and growth in Latin America Latin America and the Caribbean”.

In that sense, the study reveals that only one in 10 people believes that others will act appropriately in Latin America and the Caribbean. In this way, the levels of trust are equivalent to a quarter of the levels in the developed countries that make up the Organization for Economic Co-operation and Development (OECD).

“Placing trust at the center of government decision-making would significantly revive development in the region,” said IDB President Mauricio Claver-Carone, presenting the report.

“Greater trust means less bureaucracy that harms business, investment and innovation. It means more transparent governments, committed to keeping their promises and being accountable”, he added.

IDB research concludes that countries with higher trust tend to enjoy higher levels of productivity, while those with low trust indices have a larger informal economy relative to their GDP.

Likewise, the document emphasizes that increasing confidence in the countries of the region would accelerate growth and employment. In addition, it indicates that mistrust is an obstacle to investment and innovation.

“A higher level of trust could be a great advantage to promote greater regional integration, with more robust supply chains, more productive SMEs and greater digitalization,” he mentions.