Alejandro Foxley: “Economic growth via productive innovation is a major issue for the future”

Chile’s former Minister of Foreign Affairs and Finance Alejandro Foxley highlighted economic and social progress in several countries in the region over the past decade and acknowledged today’s challenge of “going the rest of the way to become advanced economies and mature democracies,” a process that requires, in his opinion, taking a leap in productive innovation, attracting foreign investment and deepening regional integration.

“At this time, it is particularly important to be able to innovate, to be creative, in order to give economies new momentum. Economic growth through productive innovation is a major issue for the future,” Foxley argued during the eleventh edition of “Conversando con CAF” with Enrique García, executive president of CAF—development bank of Latin America.

The former Chilean foreign minister, who currently chairs the Corporation for Latin American Studies (CIEPLAN), noted that while Latin America is innovating much more than in past decades, “we now have to innovate under a more shared approach, especially among countries in the same region.”  Along those lines, both Foxley and Garcia agreed on the need for the region to move towards productive integration in an effort to be more competitive in global markets.

 “The cornerstone of high, sustained and efficient growth is productive transformation. And to that end, we need real, pragmatic integration, not only of governments but also of companies. Traditional integration is outdated,” the CAF president said.

Foxley agreed on the need to work on that process. “If we look at the region, we see many legally perfect integration structures, we have signed treaties and other documents. But what we lack is a real integration process with a productive structure to compete with Asia or other regions of the world. We need to have many more multi-Latin companies,” said Foxley, who highlighted the contribution of CAF and other agencies to regional infrastructure integration.

For García, achieving productive transformation will allow us “to evolve from traditional comparative advantages based on raw materials to dynamic, competitive comparative advantages.”

The head of CAF added that innovation and technology play a pivotal role in this equation, with education as a key factor. “We need to think about 21st-century education, not 19th-century education,” he said.

Another topic was the need for the region to attract foreign investments in order to move forward. Foxley emphasized that “Latin America has to move past the ideological bias that multinational companies are dangerous.” “We need to bring the best, learn from them and push forward,” he added.

In the context of U.S. President Barack Obama’s recent historic visit to Cuba, the former Chilean foreign minister believes that restoring relations between the two countries “is something we have been expecting for a long time.”

 “It always seemed obvious to us that the only way for Cuba to feel that it has a real place in Latin America is not to be discriminated against in any way. I hope that the embargo imposed by the United States Congress will be lifted as soon as possible,” Foxley said. He added that this new era also poses a challenge for the region. “It is going to be a challenge for us in Latin America, but also appealing, to go there (to Cuba) and learn from them too,” he concluded.

To see the conversation between Alejandro Foxley and Enrique García, click here.