JOSÉ MANUEL SALAZAR-XIRINACHS
IN 2022, Latin American and Caribbean countries are facing the effects of a series of shocks that have deteriorated their investment and production conditions, including the global financial crisis, economic tensions between major poles of the global economy, the covid19 pandemic, the war in Ukraine and the resurgence of inflation, in a context in which the environmental emergency is worsening and the technological revolution is accelerating.
Numerous analysts and international organisations talk about a series of cascading crises, citing among them the crises related to the climate, health, employment, social matters, education, food security, energy and the cost of living - all of which have impacts of varying intensity and characteristics on numerous countries, including those in Latin America and the Caribbean.
The fight against inflation has toughened global financial conditions and increased volatility in financial markets and risk aversion. This has raised the cost of debt service, further reducing fiscal space and increasing the risk of a recession in the global economy in 2023. The growth rates estimated for the vast majority of the world's countries in 2023 have been revised downward recently by various organisations.
In the region, the combination of external and domestic factors stemming from the policy decisions made, or from the absence of such decisions, has reduced the capacity for economic growth and quality job creation and hampered its fight against poverty and extreme poverty. Its economic and social structures have weakened and have fallen into situations that reinforce the inertia of a weak economic performance.
Faced with this reality, ECLAC advocates for Latin America/Caribbean to redouble its efforts to both reactivate its economies as well as to transform countries' development models, centering these efforts around policies for productive transformation and diversification, along with a big public and private investment push, which would allow for accelerating structural change and technological and digital transformation to achieve high, sustained growth and sustainable and inclusive development.
In that strategy, the sectoral dimension is crucial, because that is where company strategies, business models and processes of capital formation and job creation are defined. Although the specific sectors should be defined in each national context, ECLAC proposes ten sectors or areas that are particularly promising: the energy transition, electromobility, the circular economy, the bioeconomy, the healthcare-manufacturing industry and the digital transformation - which are at the centre of innovation processes - while the care economy, tourism, micro, small and medium-sized enterprises, and the social economy are great generators of employment, with the ensuing effects on income and the inclusion of disadvantaged social sectors.
Harnessing the potential in these areas entails transforming the
