Growing global asymmetries: challenges for Latin America and the Caribbean - CEPAL
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Growing global asymmetries: challenges
for Latin America and the Caribbean
How far are we from achieving goal 10:
“reducing inequality within and among countries”
Alicia Bárcena
Executive Secretary of the Economic Commission for Latin
America and the Caribbean (ECLAC)
Dialogue of the Executive Secretaries of the Regional Commissions with the UN
General Assembly Second Committee
18 October 2021
GLOBAL ASYMMETRIES ARE GROWING BETWEEN DEVELOPED
AND DEVELOPING COUNTRIES
▪ Access to vaccines and vaccination levels
▪ Unequal access to financing, concentration of wealth, income and technology
▪ The world economy is facing a divergent recovery
▪ Bulk of fiscal stimulus and investments is concentrated in the developed
world
▪ Disparities in climate responsibilities and responses
▪ Digital divide
▪ Concentration of economic power has strengthened the existing asymmetry
in policy autonomy and policy space which is unevenly distributed between
developed and developing economies
TWO EXAMPLES OF INCREASING GLOBAL ASYMMETRIES
ECONOMIC DIVIDE ASYMMETRIES IN CLIMATE CHANGE
▪ Large asymmetries in expansionary fiscal and
monetary policies/significant public investment:
€750 billion in Europe and €20 billion; US$ 6
14,5% 16,8%
trillion allocated in the United States, with a
further new multi-annual packages for around
18% of GDP 38,3%
▪ LAC: fiscal plans announced between January 8,3% 7,2%
and June 2021 amount to 4.3% of GDP.
▪ Global wealth increased by 7.4%
▪ Richest 1% owned 50% of world’s total wealth
LAC ▪ Global GHG emissions were 50
▪ United States & Canada: +12.4%; Europe: +9.2% GtCO2e and the region emitted 4.2
▪ China: 4.4% GtCO2e
▪ India: - 4.4% ▪ Adaptation is inevitable
and has benefits
▪ Latin America and the Caribbean: -11.4%
Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), Construir un nuevo futuro: una recuperación
transformadora con igualdad y sostenibilidad (LC/SES.38/3-P), Santiago, 2020.DISPARITIES IN ACCESS TO VACCINES AND VACCINATION
LATIN AMERICA AND THE CARIBBEAN (33 COUNTRIES):
PERCENTAGE OF THE POPULATION FULLY VACCINATED
The region will not be able to vaccinate 70%
Chile 74.8 of its population in 2021
Uruguay 74.7
Cuba 59.1 PERCENTAGE OF THE POPULATION FULLY VACCINATED
Ecuador 56.0
El Salvador 55.1
Argentina 53.8 64.1
Panama 53.3 58.4
Brazil 49.2
Costa Rica 46.6
Dominican Republic 46.3 43.0
Antigua and Barbuda 45.7
ALC 42.8
Saint Kitts and Nevis 43.1
Peru 41.1 24.7
Trinidad and Tobago 40.2
Barbados 39.8
Mexico 39.4
Colombia 37.5
Belize 35.7
Suriname 31.2
Dominica 30.5
Bolivia 29.3 European Union United States Latin America Caribbean
Guyana 28.7
Paraguay 28.5 and Canada (20 countries) (13 countries)
Bahamas 27.9
Honduras 25.2
Grenada 21.6
Venezuela 21.6 Acquisitions in some countries exceed their vaccination needs.
Saint Lucia 20.4
Guatemala 16.3 European Union, United States, United Kingdom, Canada and
Saint Vincent and the Grenadines 13.1 Japan account for 39% of purchase commitments, with only 13%
Jamaica 11.4
Nicaragua 4.9 of the world population.
Haiti 0.2
Source: ECLAC, ECLAC COVID-19 Observatory, based on Our World in Data [online] www.ourworldindata.org.
Note: Record for countries that report the breakdown of administered doses (first and second), as of 17 October 2021 or latest available date. Purchase commitment data as of 31 August 2021.THE MOST AFFECTED DEVELOPING REGION BY THE COVID-19 CRISIS
▪ Worst drop in a century; paradox of recovery (2021, 5.9%) with the risk of returning to mediocre
levels (2022, 2.9%)
▪ Crisis aggravated structural problems of low productivity, fragmented health systems and lack of
access to basic public goods: water and sanitation
▪ Employment fell 9%, informality went up to 68.5% where women and youth were most affected
WORLD AND SELECTED REGIONS: GROWTH OF GDP AND THE NUMBER OF EMPLOYED PERSONS IN 2020
(IN PERCENTAGE)
A. GDP B. Employment
0 0
-1 -1
-2 -0.9 -2 -0.9
-1.8 -3
-3 -2.1 -2.0
-2.6 -4
-3.5 -3.4 -3.0
-4 -3.2 -5 -3.7 -3.5
-5 -6
-4.6 -7
-6
-8
-7 -9
-8 -6.8 -10 -9.0
World Developed Emerging Emerging Emerging Latin Middle East Sub-Saharan World Developed Emerging Africa Latin Asia and the Europe and
economies markets and Asia Europe America and and Central Africa economies markets and America and Pacific Central Asia
developing the Asia developing the
economies Caribbean economies Caribbean
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of IMF WEO (July 2021), ILO (2021), and official figures.THE RECOVERY PARADOX
LATIN AMERICA AND THE CARIBBEAN: LEVEL OF GDP IN REAL TERMS Heterogeneity and uncertainty
(Index: 2008=100)
120 ▪ The region will grow 5.9% in 2021,
+2.9 % sustained by transitory effects on
aggregate demand and a statistical
115
+5.2 %
rebound.
110 ▪ For 2022 a growth of 2.9% is expected.
-6.8% ▪ The crisis aggravated structural
105
problems: low productivity and high
informality, unemployment, inequality
100
and poverty.
▪ Lowest levels of investment in three
95
decades (17.6%) contrasting with
world average of 26,3%.
90
▪ Risk of reprimarization in 2021: exports
grow by 22%, due to raw material
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
prices.WITHOUT TRANSFERS, POVERTY COULD BE GREATER IN 2021 (15
MILLION MORE IN EXTREME POVERTY
Latin America: poverty and extreme poverty, 2019 and 2020,
with and without cash transfersa ▪ Extreme poverty: 12.5%
(Millions of people)
POVERTY EXTREME POVERTY ▪ Poverty: 33.5%
without transfers ▪ Transfers in 32 countries covered
230
326 million people, or 49.4%
209 with transfers
of the population
▪ Greater inequality in income
without transfers distribution: 2.9% increase in Gini
187 98
coefficient
78 with transfers
70 ▪ Digital divide: 66 million households
not connected to the internet.
2019 2020 2019 2020
▪ Students (167 million) lost up to one
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Household Survey Data year of in-person schooling.
Bank (BADEHOG).
a Weighted average for the following countries: Argentina, Bolivia (Plur. State of), Brazil, Chile, Colombia, Costa Rica,
Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru,
Uruguay and Venezuela (Bol. Rep. of). The simulation does not include changes in remittances to households.THE MOST AFFECTED: YOUTH DUE TO HIGH INFORMAL EMPLOYMENT AND
WOMEN WHOSE LABOR PARTICIPATION FELL BY 13 YEARS
Latin America (15 countries): Percentage of informal youth Female labour force participation rate, 1990 to 2021
(15-24 years) and adults (25-64 years), by country, 2019 (In percentages)
55.0
(In percentages)
51.4
96.9
50.0 49.1
89.2
86.9
82.0 82.5
84.7 46.9
74.8
45.0
67.2
71.1 79.2
81.3
68.5
64.6 74.8
56.6 66.2
64.4 63.2
50.4 58.7 57.7 54.7 40.0
44.6 52.8
37.5 38.1 46.5 47.8
45.5
35.0 34.4
36.2
26.0
20.7
30.0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
15-24 25-64
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of ILOStat. Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official
information.
Note: Data for 2021 correspond to estimates.THE MOST INDEBTED REGION IN THE DEVELOPING WORLD AND
THE REGION WITH THE HIGHEST EXTERNAL DEBT SERVICE
SELECTED REGIONS: CENTRAL GOVERNMENT GROSS PUBLIC DEBT,
2019 AND 2020
(Percentages of GDP)
The region has higher debt levels than developing
economies, but lower levels than developed
economies…
FOREIGN DEBT SERVICE FOR REGIONS
OF THE DEVELOPING WORLD, 2019 and 2020
(Percentages of exports of goods and services)
2019 2020
59.0
50.1 49.8
…and allocates more than half of the exports of goods 50.9 47.2 35.9
42.5 31.8
and services to the payment of the external debt
service. 28.5
22.2
Latin America Emerging Emerging Emerging and Emerging and
and the Caribbean and Developing and Developing Developing Developing
Countries Countries Countries Countries
of Asia of Europe of Sub-Saharan of the Middle East
Africa and Central Asia
Source: ECLAC, on the basis of International Monetary Fund (IMF).DEVELOPING COUNTRIES ALSO FACE AN IMPORTANT ASYMMETRY IN THE
TREATMENT OF THEIR DEBT
▪ Latin America and the Caribbean is the most indebted region of the developing world (77% of GDP for the general
government) and with the highest debt service (59% of exports of goods and services)
▪ During the period ranging from 31 January 2020 to 28 February 2021, Latin America and the Caribbean was jointly with Sub-
saharan Africa the most downgraded region in the developing world
Share of sovereigns that have been downgraded at least once, 31 January 2020–28 February 2021
(Percentages of total)
41
35
25 24
6
Sub-Saharan Africa Latin America and the Middle East, North Africa Asia Pacific Developed economies
Caribbean and Central Asia
Source: On the basis of CountryRisk.io (2021), “Sovereign Risk” [online] https://www.countryrisk.io/platform.TO OVERCOME GLOBAL ASYMMETRIES ECLAC SUPPORTS THE
REGION’S COUNTRIES ON SEVERAL FRONTS
▪ Advocating for a further re-allocation of SDRs from developed economies since they received 64.4% of the
new SDR issue and developing economies 35.6%. Yet developed economies have ample policy space and
have a much lower usage of SDRs than developing economies.
▪ Developed countries could channel SDRs that they will not use
✓ A new trust fund to support middle-income countries is needed, FACE is a good example.
✓ SDRs could also be used to capitalize development banks.
▪ Reform of the international debt architecture (creation of a multilateral credit rating agency and debt
restructuring mechanism).
▪ Mobilize public and private investment on green investment strategy in 8 dynamic sector for a big
environmental push.
▪ Close the digital divide by connecting 66,2 million households through a digital basic basket (laptop, tablet
and a low cost connection) with a cost of 1% of GDP in average.
▪ Promote regional cooperation on vaccine and pharmaceutical production and distribution with the
implementation of the Plan for Self-sufficiency in Health Matters.PLAN FOR SELF-SUFFICIENCY IN HEALTH MATTERS
OBJECTIVES
Short term Medium and long terms
Speed up vaccination Strengthen/generate
processes technological and productive capacities
Improve Facilitate the Ensure a large, Strengthen regional Facilitate local
access to vaccination stable market research production and
vaccines process and development regional chains
INVENTORY OF CAPABILITIES LINES OF ACTION
1. Regulatory convergence and recognition mechanisms
▪ Ongoing vaccine development and research
in the region 2. Regional clinical trials platform
▪ Capacities for vaccines production 3. Regional vaccine procurement mechanisms
▪ Pharmaceutical companies 4. Consortiums for the development and production of vaccines
▪ Chambers and associations
5. Regulatory flexibilities for access to intellectual property
▪ Regulatory systems
▪ IPR flexibilities 6. Public procurement mechanisms for regional market
▪ Primary sponsors of clinical trails development
▪ Primary health-care systemsA STRATEGIC APPROACH Transition
TO INVESTMENT: to
renewable
energy
▪ ECLAC has identified eight sectors Sustainable
Sustainable
tourism
mobility in
to drive the new pattern of cities
development, to boost
competitiveness and employment, 8 strategic
and reduce environmental footprints sectors for a Big Digital
and socioeconomic and Circular revolution:
gender inequality.
economy Sustainability universalize
access
Push
▪ We have calculated the necessary
investment, the jobs each one can
create and the reduction of emissions. Care Health-care
manufacturing
economy industry
Bioeconomy
and
ecosystem
services
13SEVEN MESSAGES 1. New financial architecture to address disparities in access to financing, credit rating, tax evasion and illicit funding. 2. Redistribution of liquidity and reform of the international debt architecture, establish FACE and the Caribbean Resilience Fund. 3. Solidarity or wealth taxes on those who generated substantial gains during the pandemic to finance the emergency. 4. Overhaul the international tax system to ensure fair taxation of multinationals and ensure that MNEs pay taxes where value-added is created (beyond BEPS). 5. Eliminate corporate tax avoidance, illicit tax havens and seize stolen assets which could enhance fiscal space in developing countries. 6. Asset Recovery Mechanisms: new international framework/bilateral agreements with standards for the return process. 7. UN Tax Committee should become an intergovernmental mechanism for international financial and tax affairs and address global asymmetries particularly as related to Middle- Income Countries.
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