Since the beginning of the 21st century, the global economy and geopolitics have faced various disruptive processes, which are shaping an increasingly complex and interconnected world. These include the accelerated digital transition, the worsening effects of climate change, financial crises that forced modern economies to reformulate their financial and industrial strategies, frictions between global trade leaders, new wars and growing political polarization on virtually all continents.
The consolidation of China as a new economic and technological power has brought about one of the most characteristic processes since the beginning of this century: the acceleration of the imbalance between the economy of the Asian giant and those of the United States and the European Union, also encouraged by the pandemic, frictions between trade blocs and geopolitical clashes in Asia and Europe. All this gave rise to a process of relocation of global production chains.
He nearshoring and the friendshoring These are two schemes with which the world sought to control the risks in global supply chains to avoid their disruption by epidemics, trade embargoes and wars. This causes, in the short term, a loss of dynamism in international trade that affects Latin America and the Caribbean, but opens opportunities for the region if policies are implemented that combine the attraction of investment with internal efforts to learn and build new technological and productive capacities.
At the same time, the world is experiencing an acceleration of the technological revolution, with the emergence of artificial intelligence and other digital technologies, as well as speculation about their effects on the labour market, on technological businesses and on education around the world. The ever-present threat of climate change is another stress factor for the economies of the region.
In light of this situation, Latin America and the Caribbean need to close three major gaps in order not to miss the global development train. The first is external and is characterized by limited capacity for growth due to the slowdown in global trade and the reorganization into regional economic blocs. The second is social and refers to the insufficient growth of quality jobs, the large increase in informal jobs and the high rates of poverty and extreme poverty. And finally, the third is an environmental gap in which, within the framework of the double asymmetry of the effects of climate change, ecosystems are destroyed and environmental conditions are deteriorating.
The region must address these gaps simultaneously: without growth there will be no more and better jobs; without building technological capabilities, growth will not be stable or lasting. Growth must be based on technologies and patterns of production and consumption that respect the limits of the planet. The region must grow by redistributing income towards the poorest sectors and this growth must be sustainable. In fact, we must become the first region in the world to promote its development and growth without affecting the environment.
For Latin America and the Caribbean, not growing, not redistributing and not adapting to climate change are not options. This requires reducing distances with economies that are at the technological frontier, with industrial, technological and economic diversification policies that generate formal jobs with higher productivity; with social policies that promote income redistribution, gender equality, care, health and education systems, which are not only powerful for promoting equality, but also for improving productivity in the world of work; and with environmental policies that are at the same time development, investment and employment policies, directing investments in favor of sectors with less environmental impact, such as changes in the energy matrix, electromobility, digital society and the circular economy.
Based on the above, the Autonomous Metropolitan University (UAM), the Ministry of Foreign Affairs of Mexico (SRE) and the Development Bank of Latin America and the Caribbean (CAF) convene the seminar Rethinking Development in Latin America and the Caribbean from Mexicowhich will promote the exchange of ideas between academics, public officials and former public officials to rethink the economic, social and environmental problems of Latin America and the Caribbean. The meeting will discuss policy proposals that can be considered by decision-makers at the highest level. This space for dialogue will serve as a platform to promote the formation of a task force to organize and continue the debate on the priority and strategic problems of the region.
The seminar will be held from September 9 to 11 at the SRE headquarters and those interested can participate in person or virtually. The objective is to generate analysis, debates and proposals so that the region is able to respond to the persistent challenges that hinder its development and compromise social inclusion.
Alicia Barcena She is Mexico’s Secretary of Foreign Affairs, Sergio Diaz-Granados He is executive president of CAF and JJose Antonio de los Reyes He is the general rector of the UAM.
