(posted April 10, 2:00 p.m.)- If Latin America and the Caribbean can keep its foot on the gas to sustain economic growth and development, the region is in a position to overcome the global threats posed by the Euro-zone debt crisis, the U.S.’ slow economic recovery, and China’s economic deceleration, according to multilateral lending institutions.
During a Tuesday afternoon joint press conference in Washington, D.C., representatives from the World Bank, the Inter-American Development Bank and the Development Bank of Latin America said achieving this goal of sustained economic growth in Latin America and the Caribbean hinges on the determination of hemispheric governments to seize the opportunity.
The three lending institutions urged the countries of the region to re-launch a socially inclusive growth agenda by improving competitiveness, upgrading infrastructure, sustainable energy and logistics, boosting investments in innovation, and improving quality in education and citizen security.
To help that cause, the multilaterals are willing to pony up an average of $35 billion annually to support economic growth with social inclusion, the three institutions said in a joint statement.
The organizations said they are willing to focus special attention and support on the smaller, more vulnerable economies in Central America and the Caribbean.
“At the time, the crucial goal was to provide liquidity to confront a serious crisis; the situation is different now,” said Luis Alberto Moreno, president of the Inter-American Development Bank. “Latin America navigated the crisis in an exemplary manner and is now better positioned to confront the changed circumstances. However complacency is our worst enemy. We now have to confront challenges in order to increase productivity and continue on a path to growth and social equity.”
During the 5th Summit of the Americas in 2009, the three international lending institutions, along with other sub-regional bodies, pledged and delivered $90 billion in two years to create a financial buffer zone to help the region offset the severity of the global financial crisis. Now, after recent replenishment rounds on the eve of the 6th Summit of the Americas this weekend in Colombia, the Inter-American Development Bank should be able to provide $12 billion, the World Bank Group says it can muster around $12 billion, and the Development Bank of Latin America can put up another $11 billion for public and private sector investments.
“Latin America has made significant strides in addressing its social and economic gaps, proving that sound economic policy coupled with social inclusion can bring opportunity and hope for poor people,” said World Bank Group President Robert B. Zoellick. “To sustain the social and economic gains of the past decade, the region needs to address critical bottlenecks to improve productivity, and successfully compete in the global economy.”
Enrique Garcia, President and CEO of the Development Bank of Latin America says “Modernizing infrastructure is one of the main unresolved issues.”
“The infrastructure deficit prevents several regional countries from sustaining high rates of growth without inflationary risks,” he said. “Joint action between the State and the private sector is crucial for establishing associations that make the necessary financial effort viable.”
According to the World Bank, 73 million Latin Americans have moved out of poverty in the past decade. Social inequality was reduced and economic growth moved at a fast clip thanks to favorable terms of trade spurred by high commodity prices.