SANTIAGO, Chile (CMC) – The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, says regional integration and solidarity are essential to confronting the growing global asymmetries and disparities between developed and developing countries.

“Even as recoveries continue, divergence in growth rates, vaccination rates, fiscal stimulus, access to concessional financing and inequality is expressed in deep income and wealth gaps with a high concentration in developed countries and elites within our countries,” said Bárcena during the Coordination Segment of the United Nations Economic and Social Council (ECOSOC), where she referred to the causality and linkages between variables to build back better with an integrated policy strategy.

“Latin America and the Caribbean will show the least growth of all regions in the world and is the most indebted developing region,” said Bárcena as she participated in a panel discussion on “Leveraging regional perspectives for an inclusive and resilient recovery guided by the 2030 Agenda”.

In her presentation, Bárcena affirmed that while the region faces different realities in the Caribbean, Central America and South America, all these sub-regions share low growth (2.1 per cent), low investment levels (19.5 per cent of gross domestic product – GDP), less fiscal space and pressing inflation rates, with high unemployment (9.7 per cent) and informality (57 per cent of the active population), hitting women and youth particularly hard.

She said all of this is compounded by inadequate social protection and limited access to universal health.

Bárcena noted that, according to ECLAC’s annual report, entitled “Social Panorama 2021”, the extreme poverty rate in the region is seen having risen from 13.1 per cent of the population in 2020 to 13.8 per cent in 2021, representing a setback of 27 years.

At the same time, she said it is estimated that the overall poverty rate fell slightly, from 33 to 32.1 per cent of the population.

“This means that the number of people living in extreme poverty has risen from 81 million to 86 million, while the total of those living in poverty fell slightly from 204 million to 201 million,” the ECLAC chief said.

She added that the pandemic magnified the structural problems of low productivity, social vulnerability and environmental degradation in the region, noting that while Latin America and the Caribbean only represents 8.4 per cent of the global population, it has been the region most affected by COVID-19, accounting for nearly 30 per cent of all COVID-related deaths and 18 per cent of the cases on record.

In order to rethink development and build forward better, Bárcena said it is necessary to achieve equitable access to vaccines, to move forward on universal social protection, to consider the care economy as an economic sector that can fuel the recovery, to promote climate action and a green recovery along with universal digitalisation to cover the 66 million households that have no Internet connectivity, at an estimated cost of one per cent of GDP.

She also said it is necessary to address financing for the recovery from COVID-19 and for the attainment of the United Nations’ 2030 Agenda from two dimensions: national and international.

In the national arena, Bárcena said new political compacts with progressive fiscal reforms are needed to enable new social contracts.

“Combatting tax evasion, which amounts to 6.1 per cent of regional GDP, is a must. Tax expenditures, which represent three per cent of regional GDP in foregone revenue, and royalty regimes on natural resource extraction need to be reconsidered.

“Furthermore, only four countries in the region levy some form of carbon tax – Argentina, Colombia, Chile and Mexico – which is a missed opportunity for incentivising the region’s climate transition,” she added.

However, Bárcena acknowledged, given the effects of the pandemic, many countries cannot

“We need international cooperation tailored to the needs of the region’s predominantly middle-income countries, including the Small Island Developing States (SIDS) of the Caribbean, which are highly vulnerable to climate change.”

Bárcena highlighted some of ECLAC’s relevant proposals in this context, including redistributing global liquidity to all vulnerable countries in need, regardless of their income level, to enable a resistant recovery, in addition to reforming the global debt architecture and supporting innovative instruments to improve debt repayment capacity and enhance resilience.

She said this includes debt-for-climate swaps and the establishment of a Caribbean Resilience Fund, as well as hurricane clauses, “which should become a more systematic feature of debt relief initiatives for vulnerable countries.”

ECLAC also proposes the creation of a multilateral credit rating agency to complement and counterbalance the current oligopoly of the private credit rating agencies.

Bárcena said that, at the upcoming Fifth Meeting of the Forum of the Countries of Latin America and the Caribbean on Sustainable Development, to be held in Costa Rica, March 7-9, a session on financing for development will be held with the participation of representatives of the International Monetary Fund, regional banks and the United Nations Conference on Trade and Development (UNCTAD).