The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), José Manuel Salazar-Xirinachs, affirmed today that the region needs new-generation productive development policies that would enable it to escape the trap of low growth and open the door to its future prosperity, during a presentation at the TEDxPuraVida 2023 conference held in Costa Rica.
“The toolbox for raising the rate of economic growth lies in productive development policies. It’s no longer a matter of putting protectionist tariffs in place, but rather of promoting technological sophistication and productive diversification. It’s about building capacities in societies to do new and more sophisticated things,” he emphasized.
The senior United Nations official was one of the main speakers at this event, which featured relevant presenters from various fields.
In his presentation, entitled “Latin America’s lost keys,” José Manuel Salazar-Xirinachs analyzed the reasons behind the region’s low growth and lack of prosperity.
“What has happened to us? Why haven’t we found the keys to ignite the engines of growth and prosperity? We can point to numerous causes, but there is one that encompasses all the rest: productivity has practically not grown at all in the last 40 years,” he explained.
He specified that if a country were to grow by 1.5% a year, it would take 140 years to double its income per inhabitant – or nearly a century and a half. In the last decade, Latin America and the Caribbean grew by just 0.8% a year.
“At this pace, it will take us 300 years to double our income per inhabitant. This is not about growing just to grow, or just any kind of growth. In our economies and societies, we need growth that is productive, inclusive and sustainable,” he contended.
In this regard, ECLAC’s Executive Secretary explained that growth must be productive, because productivity is what determines the standard of living in the long term; it must be inclusive, meaning that it benefits everyone, creates quality jobs and reduces poverty, informality and inequality; and it must be sustainable so that it doesn’t destroy nature and the planet on which we live.
“Moving towards a model of productive, inclusive and sustainable development is not something gradual, it is a major transformation that also requires high and sustained growth. Why? Because a major transformation is incompatible with a stagnant and sedentary economy,” he underscored.
ECLAC’s highest authority added that this transformation must be governed, managed, guided and induced. “The market alone will not achieve this, nor will the private sector on its own, or the State. We need the collaboration of all sectors,” he indicated.
Salazar-Xirinachs said that putting this into practice requires the vision and drive of national and local governments, the private sector, academic institutions and civil society.
“It is necessary to move towards a collective effort, towards public-private partnerships, to cluster initiatives, because this major productive-development transformation is a social construction,” he stressed.
He added that it is also essential to invest in infrastructure, human talent and the specific public goods of dynamic sectors, all of this led by quality institutions, with a long-term, forward-looking vision.
“I am more convinced than ever that the countries that use these keys are the ones that will have more success in escaping the trap of low growth and opening the door to their future prosperity,” he concluded.