The Inter-American Development Bank (IDB) closes the year with almost 20,000 million dollars of new financing for Latin America and the Caribbean and its sights are set on capitalizing and promoting foreign direct investment in the region.
For IDB President Mauricio Claver-Carone, these goals are essential to help overcome the crisis caused by the Covid-19, which caused a 7% contraction of regional GDP in 2020, more than three percentage points above the world average.
“I can safely say that we are not going to have a lost decade in macroeconomic terms. GDP is recovering,” he told AFP.
But are we going to have a decade of missed opportunities? He wondered.
The great challenge is closing the “huge socioeconomic gaps” that make Latin America and the Caribbean the most unequal region on the planet, he said.
“It is not a coincidence that it is the region most affected by covid-19. It represents 8% of the global population, but accumulates 35% of deaths in the world. Why? Due to the enormous disparities” it has , he asserted.
In order to support “sustainable and inclusive” growth, the IDB head advocates a further increase in the bank’s capital, the 10th since it was founded in 1959.
The United States, which with 30% of the shares is the main shareholder of the IDB, “has a unique opportunity to strengthen this institution,” said Claver-Carone.
The first non-Latin American president of the IDB welcomed a bill that is advancing in the US Congress with bipartisan support, which authorizes up to 80,000 million dollars to capitalize the regional lender.
Lithium and call centers
The capitalization of the IDB, which Claver-Carone compared months ago with “a Marshall Plan for the region”, alluding to the American program to rebuild Europe after World War II, would also allow the United States to gain ground against China, which became the last years in the first commercial partner of almost all the South American countries.
For the president of the BIDDuring the last 20 to 30 years, Latin America and the Caribbean lost great development opportunities because the world turned to China. But the supply problems brought on by the pandemic open up a historic opportunity to reverse that situation.
“Two-thirds of the world’s lithium is in South America. China buys lithium to make batteries that it then sells to the United States. Why not directly export the lithium from South America to Mexico, make the batteries in Mexico and then send them to the United States? “
This would reduce not only prices, but also harmful emissions for the environment. And it would create many jobs in the region, he argued.
Nearshoring, as the phenomenon of relocating production processes that companies had taken far to lower costs, closer to customers is known, also includes services.
“There is a whole English-speaking population in the Caribbean. Microsoft and Google alone can employ half of Jamaica if they move some of their facilities from India to the Caribbean,” explained Claver-Carone.
The IDB this year approved $ 2.3 billion to strengthen regional supply chains. And it worked with 16 countries to identify the advantages of “nearshoring”, among others in the semiconductor sector and in textiles.
“We have done great things in Costa Rica, the Dominican Republic, Colombia, Uruguay, Ecuador,” said the head of the IDB.
Reference-www.eleconomista.com.mx