The Acting Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Mario Cimoli, today analyzed the complex socioeconomic context that the region is experiencing as a result of the war between Russia and Ukraine, during a meeting with permanent representatives of the countries members of the regional Commission, held at the United Nations headquarters in New York.
The meeting was convened by the Permanent Missions of Costa Rica and Argentina to the UN, in their capacity as outgoing and incoming President of ECLAC, respectively. The meeting was opened by Ambassador Rodrigo Carazo, Permanent Representative of Costa Rica to the United Nations, and Ambassador María del Carmen Squeff, Permanent Representative of Argentina to the United Nations.
“When in Latin America and the Caribbean we have not yet finished overcoming the COVID-19 pandemic, the region is already beginning to suffer the consequences of the war between Russia and Ukraine,” Mario Cimoli said during his speech.
He specified that, according to the new estimates released today by ECLAC, in the current context, where the conflict in Ukraine has exacerbated inflationary problems, increased volatility and financial costs, an average growth of 1.8% is expected for the region, less than the 2.1% projected in January 2022. The economies of South America will grow 1.5%, those of Central America plus Mexico 2.3%, while those of the Caribbean will grow 4.7% ( excluding Guyana), he pointed out.
The highest representative of the UN Regional Commission added that the war conflict is also impacting the economies of Latin America and the Caribbean through international trade, with the countries involved in the conflict, but also with indirect effects on global activity. and the dynamics of the region’s main trading partners -the United States, China and the European Union-, stressing the external restriction.
The Acting Executive Secretary of ECLAC specified that the war in Ukraine caused an increase in the prices of basic products (commodities), mainly hydrocarbons, some metals, food, and fertilizers.
In this regard, he warned about the impact of the increase in food prices on the most vulnerable population in the region. He pointed out that this increase will strongly affect the first three quintiles of the population and the small island developing states (SIDS) of the Caribbean.
“That is, the poor will be poorer and the excluded, more excluded. Therefore, food security must be a priority for the region”, he stated.
Likewise, he warned about the insufficient regional production of hydrocarbons and refined products for the internal market and urged regional integration to mitigate commercial vulnerability, optimize energy supply and increase the use of infrastructures.
To face the situation, Mario Cimoli recommended that the countries implement an anti-inflationary policy that uses all the available political instruments, not only the interest rate.
Likewise, he said, the region must improve food security mechanisms, for example, considering proposals such as the one presented in June 2020 by ECLAC and FAO, consisting of a Bonus Against Hunger, which could materialize in the form of monetary transfers. , food baskets or coupons for the entire population living in extreme poverty.
Cimoli also underlined the need to involve the private sector in the policy response, especially in the global grain market. In addition, he urged international financial institutions to be available to cover the financing needs of the countries of Latin America and the Caribbean.
Finally, he called for promoting political dialogue for regional collective action that would allow progress towards self-sufficiency in food, fertilizer, energy, manufacturing and financing for development, and to strengthen regional cooperation within the framework of the Community of Latin American States and Caribbean (CELAC).
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