OECD: Latin America needs a green, digital and above all fair transition

Latin America needs a green, digital but above all fair transition, according to the OECDwho considers that this happens by significantly increasing the level of investments, but also because these are “quality”.

This is the main message of the Organization for Economic Cooperation and Development (OECD) in the fifteenth edition of its International Economic Forum on Latin America and the Caribbean, organized in Paris with the Inter-American Development Bank (IDB) and the French Agency for Development (AFD).

The organization’s secretary general, Mathias Cormann, recalled in his opening speech that particular circumstances, particularly the surge in inflation, led last year to an increase in poverty in the region.

By the end of 2022, a 32.1% of the Latin American population (some 201 million people) was poor, and a 13.1% (82 million) was in a situation of extreme poverty.

Cormann also referred to another of the recurring problems in Latin America, the low level of investment, clearly lower than that of other developing regions such as Asia and the developed world. In 2021 he represented the 19.5% of its gross domestic product (GDP), compared to the 22% in advanced economies and 39% of emerging Asian developing countries.

Latin America needs investment, but quality

The head of the unit for Latin America and the Caribbean at the OECD, Sebastián Nieto Parra, explained to EFE that beyond the level of investment, “it grounds itl” for it to be used well is to which sectors it is directed and “that is of quality”.

This means that it enables workers to be trained with useful skills, that it generates formal employment and that it contributes to improving productivity.

Because, as Cormann indicated, one of the region’s persistent problems is its low productivity, once again well below that of the leading economies on this point, especially China.

The general secretary agreed with the president of the IDB, the Brazilian Ilan Goldfajn, that one of the region’s strengths is its natural resources.

“Latin America and the Caribbean is part of the solution to some of the great global challenges”, affirmed Goldfajn, who gave as an example the fact that there are two thirds of the world’s lithium resources or the 37% of copper, crucial minerals for the energy transition.

According to OECD calculations, the green transition could generate a 10.5% increase in employment between now and 2030 with an increase in investment of three percentage points in this field.

The President of Costa Rica, Rodrigo Chaves, who intervened with a recorded video, insisted that we must “move towards more sustainable and inclusive growth” and was convinced that “The green transition has great potential” to improve productivity and create more formal jobs.

In this regard, he recalled that in Latin America and the Caribbean close to the Four. Five% of households depend on the informal economy, with all that this means of being left out of social protection devices.

OECD Summit on Sustainability in Costa Rica

Chaves Robles did not want to deprive himself of pointing out that his country will host the first OECD ministerial summit on environmental sustainability, economic resilience and green and just transition on October 5 in San José.

The president of Ecuador, Guillermo Lasso, also participated by video in the opening session of the forum, who dedicated his speech to highlighting some of what he considers achievements of his term, starting with “stabilize the economy and ensure fiscal and debt sustainability.”

He said that since February they have an adaptation plan to climate change for the period 2023-2027, that they have developed another plan for the decarbonization of the economy and that his country “has been a pioneer” with the debt swap mechanism for environmental protection commitments of the Galapagos.

A mechanism with which 1,100 million dollars have been captured, the interests of which must be used to finance on a “perpetual” a biodiversity protection fund in that archipelago.

Divergences about the war in Ukraine silenced

The divergences between some Latin American countries and the bulk of the OECD members on the war in Ukraine were systematically silenced in the forum’s interventions, as was the uncomfortable issue of political tensions between China and the United States, which was represented by its undersecretary of State for Economic, Energy and Commercial Affairs, José Fernández.

Among the 38 States of the organization, there are four Latin American (Mexico, Chile, Colombia and Costa Rica) that could be added in the future by Brazil and Peru, which are in the process of accession, and eventually Argentina, which is in a previous stage.

Brazil, precisely, has sent the head of its diplomacy, Mauro Vieira, to attend the annual OECD ministerial meeting, which is being held this Wednesday and Thursday in Paris. The Peruvian Prime Minister, Luis Alberto Otárola, will also be there.

Source: EFE