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Economic Reactivation Needs Productive, Fiscal and Institutional Structural Reforms to Move Towards an Inclusive and Sustainable Development Pattern in Latin America and the Caribbean

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29 April 2021|Press Release

A special issue of the CEPAL Review on COVID-19’s economic and social effects in the region was presented during a webinar led by Alicia Bárcena, the organization’s Executive Secretary.

The region of Latin America and the Caribbean has been the most affected by the COVID-19 pandemic, and the most harmed in economic and social terms. This is due to longstanding structural factors that have portended its dysfunctional development pattern. That is why the economic reactivation must pursue, at the same time, significant productive, fiscal and institutional structural reforms, in order to move forward on configuring a new, inclusive and sustainable development pattern.

So stated Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), and Mario Cimoli, Deputy Executive Secretary of that United Nations regional organization, in a joint article published in the latest edition of the CEPAL Review, which is now available online in Spanish. Under the title “Structural asymmetries and the health crisis: the imperative of a transformative recovery for the advancement of sustainable development in Latin America and the Caribbean,” the two authors analyze the structural factors behind why this pandemic crisis has had greater health and socioeconomic incidence in this region, and they review ECLAC’s intellectual production regarding this phenomenon.

In its issue No. 132, the United Nations regional organization’s main academic publication includes 15 articles by renowned international specialists and professors, who analyze in the framework of this distinctive edition the diverse economic and social effects of the COVID-19 pandemic.

This special issue of the CEPAL Review was presented on Thursday, April 29, 2021 during a webinar entitled “COVID-19 and the Socioeconomic Crisis in Latin America and the Caribbean,” led by Alicia Bárcena and in which participants included Mario Cimoli, ECLAC’s Deputy Executive Secretary; José Antonio Ocampo, Professor at the School of International and Public Affairs of Columbia University and Chair of the Committee for Development Policy of the United Nations Economic and Social Council; Benedicte Bull, Professor in the Centre for Development and the Environment (SUM) at the University of Oslo (Norway), and Francisco Robles Rivera, Researcher at the Institute of Social Research (IIS) and Lecturer at the School of Communication (ECCC) at the University of Costa Rica; Leonardo Lomelí Vanegas, Tenured Professor with the Faculty of Economics of the National Autonomous University of Mexico (UNAM); Maria Savona, Professor of Innovation and Evolutionary Economics at the University of Sussex (United Kingdom) and Professor of Applied Economics at Luiss University, Rome; and Juan Carlos Moreno Brid, Professor in the School of Economics of the UNAM, and Rodrigo Alfonso Morales López, postdoctoral researcher at the same university’s School of Economics.

In their article, Bárcena and Cimoli explain that the pandemic broke out in the region in the context of three structural crises: a social crisis that is reflected in the high levels of inequality; an economic crisis that is reflected in the region’s low growth and its technological lag vis-à-vis advanced countries and (increasingly) some Asian economies; and an environmental crisis that is reflected in the loss of biodiversity, forests and water sources, and in the upward trend in greenhouse gas emissions. “These three crises and the policies needed to overcome them mutually interact. Changing the region’s development pattern requires taking coordinated action on all three,” they indicate.

The strategy to close these three gaps (economic, social and environmental) has been described by ECLAC as a transformative recovery for sustainable development, meaning a strategy that combines economic recovery with efforts to move beyond the current development pattern, as set forth in the position document of the Commission’s thirty-eighth session, entitled Building a New Future: Transformative Recovery with Equality and Sustainability.

Taking a medium and long-term perspective, the authors recall ECLAC’s assertion that sustainable development in social, economic and environmental spheres is not something that unregulated markets can achieve on their own. It requires setting public policies in motion in various areas and simultaneously on matters of innovation and technological upgrades; moving towards a welfare state to support learning and equality; redesigning economic incentives to foster environmental protection; and implementing macroprudential policies that provide stability and promote competitiveness, progressive fiscal policies for equality and the financing of public investment, and sectoral policies to foster the expansion of sectors that are the main drivers of sustainability.

In addition, they contend that this transformation will necessitate political compacts that include expansionary, progressive, effective and efficient fiscal policies. “Leaderships are needed that provide a greater degree of certainty, that know how to build alliances, that help reclaim politics and well-being, promote solidarity among nations, strengthen regional integration, fulfill international agendas (including the 2030 Agenda for Sustainable Development), and link the emergency to the recovery,” Bárcena and Cimoli emphasize in their article.

This special issue of the CEPAL Review begins with an editorial by Miguel Torres, Editor of the Review, and an introduction by Alicia Bárcena and Mario Cimoli, the Guest Editors of this edition, entitled “The global economy and development in times of pandemic: the challenges for Latin America and the Caribbean”. Also included are studies that address the health economy in Mexico, the effects of COVID-19 and recovery in Brazil, and building a multilateralism that favors development to move towards a “new” new international economic order, among other topics. The articles are penned by renowned specialists such as Leonardo Lomelí Vanegas, General and Academic Secretary of the National Autonomous University of Mexico (UNAM); Luiz Carlos Bresser-Pereira, Emeritus Professor at the Getulio Vargas Foundation of Brazil; Ha-Joon Chang, Director of the Centre of Development Studies and Professor in the Political Economy of Development at the University of Cambridge; and José Antonio Ocampo, Professor at the School of International and Public Affairs of Columbia University – to mention just a few.

Readers are reminded that the opinions expressed in the articles published in the Review are those of the authors and do not necessarily reflect ECLAC’s viewpoints.