Latin America: New ways to strengthen social advances

Lima, July 22, 2015.- The Latin American and Caribbean region will make history again this year. For the first time in nearly 50 years, the region will become the site of the international discussion on development. It will open its doors to thousands of representatives from around the world to discuss a future without extreme poverty and with more opportunities for all.

The Annual Meetings of the International Monetary Fund and the World Bank Group are held every year in October. This year, the discussions will be held in Lima, Peru. It will be an appropriate scenario for highlighting the achievements and advances made in the region during this century, and for defining the challenges for continuing to reduce inequality and for reaching the goal of ending extreme poverty by 2030.

The meeting will take place at a time when the region is facing challenges that are shaking the foundations of the recent economic growth and swelled the ranks of the middle class to nearly 100 million people.

Following more than a decade of growth with inclusion, supported by the rise in commodity prices, the region is now seeking new ways to guarantee the social advances made and to extend them to more Latin Americans.

Recent forecasts may seem discouraging. The 0.4 percent average growth for this year, which is expected to rise to 2 percent in 2016, generates uncertainty in a region accustomed to rates of 4 to 5 percent. However, we see Latin America and the Caribbean capturing the attention of private investment as never before: In 2014, our region, led by Brazil, Peru and Colombia, attracted more than US$69 billion in private investment commitments for infrastructure in energy, water and transportation - two-thirds of the total investments in emerging countries. That percentage has been growing exponentially since 2010, when it represented just a fifth of total investments. Better roads and public services, quality education and universal health coverage are some of the aspirations of the nearly 77 million Latin Americans who escaped poverty over the past decade and who want their children to have the opportunities that neither they nor their parents had. In addition, those investments help to respond to the region’s urgent need to promote its own drivers of growth.

Accordingly, leaders in the region are aware of the need to adopt reforms to facilitate a business enabling environment, to invigorate exports and to stimulate competition in critical sectors of the economy.

It is no surprise that Peru, the host of the Annual Meetings, is on the list of countries that attracted the most private investment. This country has one of the highest growth records in the region after having taken advantage of the bonanza of its basic commodities and diversified its exports over the past 15 years.

This year, despite the economic stagnation in the region, Peru will grow an estimated 3.9 percent. A solid growth in employment has sharply reduced poverty in the country, which declined from 55.6 percent in 2005 to 22.7 percent in 2014. In 2013 alone, an estimated 500,000 Peruvians escaped poverty.

But Peru and Latin America acknowledge that much remains to be done. Inequality continues to be high in the region, so the challenge is to share more prosperity with many more of its inhabitants, especially in rural areas and in the most vulnerable urban zones. Today more than ever, Latin America has the human resources, with the drive of a middle class that wants to continue to advance and with better educated youth who look to the future with optimism.

In the new global context, the region will have to reinvent itself. But the region has done so before, with very positive results, so there is no doubt about its capacity and commitment to do whatever is necessary to continue progressing.