Improving the Governance of Natural Resources Will Allow the Region to Advance Towards Development with Equality

Latin American and Caribbean countries must take a leap towards greater and better governance of natural resources to be able to lay the foundations for a process of sustainable development with equality, the Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, stressed today during a keynote lecture at the National Autonomous University of Mexico (UNAM).

The senior United Nations official was welcomed by Mireya Ímaz, Coordinator of UNAM’s Environmental University Program (PUMA), at the closing session of a certification course called The Environmental Dimension in the Design and Execution of Public Policies, in which ECLAC participates.

Historically, the region has not managed to translate boom periods for the exportation of their resources into long-term economic development processes, said Bárcena.

Although the last cycle of rising international commodities prices (2003-2012) allowed for greater economic growth, current account surpluses, increased tax income and bigger international reserves, there was not enough progress made in terms of productivity and the diversification of exports, she explained. The reduction of inequality was also limited in this period.

The region, Bárcena stressed, spent the income derived from extractive industries with a weak focus on savings, stabilization and intergenerational equity.

In the current context of falling exports and lower international commodities prices, Latin America and the Caribbean is at a crossroads: the export model is exhausted in economic terms, as the welfare model is in social terms, the senior representative said. “In the short and medium term, the region’s countries need to confront the challenge of attracting and investing efficiently any extraordinary income that remains to be had, using criteria of social and environmental sustainability,” she emphasized.

According to ECLAC’s Executive Secretary, the idea is not only to move beyond the extractive paradigm towards productive diversification, but also to transform the capital originating from the region’s non-renewable resources into human capital (education and training), physical and social infrastructure, and innovation and technological development with a long-term view to drive structural change with equality.

Alicia Bárcena underscored the importance of the region incorporating into its public policies the new post-2015 development agenda, proposed by United Nations member states. Its objectives include using resources efficiently to try to delink economic growth from environmental degradation, adapting industries to be sustainable, improving regional cooperation and promoting ecologically rational technologies.

Alerting to the impact of global warming, ECLAC’s Executive Secretary warned that if the region’s average temperature increases by 2.5°C (probably around 2050), the economic costs of climate change are estimated at between 1.5% and 5% of the region’s current gross domestic product (GDP). Meanwhile, adaptation costs are estimated at under 0.5% of the current GDP of Latin America and the Caribbean, concentrated in the protection of coastal areas, agricultural activities and the hydrological sector.