CAF and ECLAC call for scaling up and improving productive development policies in Latin America and the Caribbean.

April 09, 2024

High-level authorities and experts discussed how the region can break free from the low-growth trap it finds itself in during the Annual Conference of CAF and CEPAL held in Santiago, Chile.

To achieve a more productive, inclusive, and sustainable development pattern, it is urgent to scale up and improve productive development policies. This is something that lies at the heart of the development models in the region and is essential for its transformation, as authorities and experts gathered today at the CAF-CEPAL Annual Conference 2024 in Santiago, Chile, agreed.

The high-level event, titled "The challenge of scaling up and improving productive development policies in Latin America and the Caribbean," brings together Ministers and Deputy Ministers of Economy, Trade, Industry, and senior executives and experts from regional and multilateral organizations. They aim to reflect on and deepen the fronts that allow progress in the design and implementation of a regional agenda of productive development policies to guide national and subnational governments, academia, private sector actors, and other stakeholders in the region in generating joint actions for sustainable and inclusive productive development.

The meeting was inaugurated by José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC, and Sergio Díaz-Granados, Executive President of CAF - Development Bank of Latin America and the Caribbean, and featured a panel of authorities on productive development policies in Latin America and the Caribbean. The panel included Nicolás Grau, Minister of Economy, Development, and Tourism of Chile; José Antonio Ocampo, Professor at the School of International and Public Affairs at Columbia University and former Minister of Finance of Colombia; Soraya Caro, Vice Minister of Business Development of Colombia; and Gonzalo Rivas, Chief of the Competitiveness, Technology, and Innovation Division, Inter-American Development Bank (IDB).

In his welcome remarks, Executive Secretary of ECLAC, José Manuel Salazar-Xirinachs, emphasized that the root of the problem is that the region is characterized by being trapped in a syndrome or trap of very low growth that has persisted for a decade. He stressed that growth per se is not everything, as it is about having inclusive growth, meaning that it reduces poverty and informality, generates good jobs, and creates a more conducive environment to reduce inequality. Additionally, it should be green and sustainable growth, friendly to nature and the planet.

"If the region invests enough in the transition towards renewable energies, electromobility, the circular economy, towards more dynamic growth-driving sectors, such as the care society, among others, and advances towards these transformations, the result will necessarily be higher and sustained growth, more diversified, and technologically more sophisticated. And this is what productive development policies are about. It is about inducing dynamism and transformation in the economy and society. Because it is in productive development policies where the toolbox is to guide growth in certain directions and towards higher and sustained rates, that is, to influence economic transformation processes towards more inclusive and sustainable development patterns," he stated.

On his part, Sergio Díaz-Granados, Executive President of CAF - Development Bank of Latin America and the Caribbean, indicated that "the region remains trapped in low productivity, which limits its growth and, therefore, the possibility of achieving poverty alleviation goals, greater equity, and ultimately, greater well-being for our citizens. That is why we value the relevance of these types of debates where our commitment is to focus all our efforts on supporting the transition that the region needs, leveraging this challenge of moving towards sustainable development."

"From ECLAC, we have been saying that it will not be enough to insist that our countries and their territories must scale up and improve their productive development policies. It will be crucial to delve into the 'whats' and 'hows' behind such a statement. That's why we see the space we organized today as a new opportunity for these reflections. But also as a moment to promote renewed collaboration not only between CAF and ECLAC on productive development policies but also among the public and private actors in the region," added the senior United Nations official.

In the first session on productive development policies in the region, the ministers, deputy ministers, and authorities present emphasized the importance of advancing in areas such as institutional capacities, technological development, financing, productive linkages, support for small producers, and tax incentives to reverse the stagnation of productivity seen in most countries in the region. This is in order to articulate productive development policies that ultimately improve the well-being of all people, which is their ultimate goal.

The CAF-CEPAL Annual Conference continued with four sessions on topics such as the role of Development Banks in productive development agendas; productive development policies with a territorial focus and cluster initiatives; closing human talent gaps for productive development; and opportunities for collaboration between governments, the private sector, development banks, and other relevant actors to scale up and improve productive development policies in the region.