Latin America and the Caribbean Must Strengthen Productive Development Policies to Avert a Third Lost Decade and Create a More Productive, Inclusive and Sustainable Future

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José Manuel Salazar-Xirinachs, ECLAC’s Executive Secretary, spoke at the Latin America and the Caribbean International Economic Forum 2025, organized by CAF in Panama City.

José Manuel Salazar-Xirinachs, ECLAC's Executive Secretary.

The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), José Manuel Salazar-Xirinachs, urged the region’s governments and private sectors today to strengthen productive development policies, getting behind and collaborating on the development of sectors that invigorate growth and the transformation to move towards a more productive, inclusive and sustainable future.

The United Nations regional commission’s highest authority participated in the Latin America and the Caribbean International Economic Forum 2025: How to return to the path of growth?, organized by the CAF – Development Bank of Latin America and the Caribbean in Panama City.

José Manuel Salazar-Xirinachs spoke on an expert panel about the Economic Outlook for Latin America and the Caribbean in 2025, along with Carlos Felipe Jaramillo, Vice President for Latin America and the Caribbean at the World Bank; Felipe Larraín, former Finance Minister of Chile; and Verónica Frisancho, Knowledge Manager at CAF. The segment was moderated by Pepa Bueno, Editor-in-Chief of El País newspaper in Spain.

“We at ECLAC see the region mired in three major development traps: one of low capacity for growth, another of high inequality, low social mobility and weak social cohesion, and a third trap of low institutional capacities and ineffective governance,” he explained.

In the case of the low growth capacity that is affecting the region, he stressed that the data speaks for itself: Latin America and the Caribbean has lived through a second lost decade.

He specified that between 2014 and 2023, average annual GDP growth was just 0.9% – less than half of what the region grew during the infamous lost decade of the 1980s, when that figure averaged 2% per year.

“To return to the path of growth, which is the theme of this Forum,” ECLAC’s Executive Secretary stressed, “the key lies in productive development policies with sectoral efforts like the ones that ECLAC has proposed as drivers of growth.” He also urged for reviewing the Panorama of Productive Development Policies 2024, ECLAC’s new flagship report published for the first time in 2024 and which will be published annually.

In his remarks, the senior United Nations official recognized that Latin America and the Caribbean faces a complex 2025, with significant present-day issues such as technological and climate disruption, geopolitical uncertainty, and the actions of the administration of United States President Donald Trump. Nonetheless, he stressed the urgency of addressing the structural problems that plague the region.

“Beyond the specific contextual issues we must address in 2025, the region has structural problems. Low capacity for growth is also a low capacity for transforming, and for managing modernization and development,” he underscored.

He added that ECLAC promotes collaborative work regimes between the public and private sectors and the technical sector of academia, and he pointed up the Platform for Cluster and Other Territorial Productive Articulation Initiatives in Latin America and the Caribbean, which seeks to give visibility to, enhance reciprocal cooperation between and strengthen the multiple productive articulation initiatives that are underway in the region, in addition to increasing their numbers and their contribution to Latin American and Caribbean countries’ productive development. This tool includes an interactive map with more than 300 initiatives that have already been georeferenced, he noted.

Finally, ECLAC’s Executive Secretary called on countries to avert a third lost decade and to establish a bold conversation about getting behind sectoral efforts.

“The productive development policies that ECLAC proposes are not old industrial policies, nor are they like the ones the United States is promoting today and that are executed mainly through subsidies, tax credits and a return to tariffs. The new vision that we are promoting puts governance first, a governance that would define growth and competitiveness strategies in collaboration with the private sector,” he concluded. 

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