The International Monetary Fund (IMF) urged the countries of Latin America and the Caribbean to improve their governance since, among other issues, it limits investments and if infrastructure problems are added to this to develop trade, economic growth in the region is more limited.
“There is an issue in governance that is key. Governments are not as effective as they could be; If not, look at the issue of security in the region, corruption is still not completely controlled in some countries and there is a use of the rule of law that can still be improved,” said the Director of the Western Hemisphere Department of the IMF, Rodrigo Valdes.
During the presentation of the report “Economic Perspectives for the Americas,” he added that in governance issues, the issue of permits to make investments is also included, as it is a recurring problem in several countries in the region, to which are added limitations related to infrastructure to develop trade.
“In governance, in the business climate and other issues, compared to the developed world, the level of GDP (gross domestic product) can grow ten points,” said the official of the international organization.
He explained that the countries of Latin America and the Caribbean are converging at a level of economic growth that is not too strong and although some nations are reaching the inflation objectives of the central banks, which encourages more lax monetary policies, which imply lower interest rates, fiscal consolidation is necessary.
“This balance is not easy to make, you have to have confidence in authority, you have to move, the markets have to believe. It is a whole set of things that need to be done but that would help, but this challenge is small compared to the challenge of what to do with potential growth or medium-term growth,” added the head of the Western Hemisphere Department of the IMF.
In this context, he warned that there is no magic bullet or lever to move, “it is a craft that must continue to be done and accelerated because without these reforms there is a great risk of falling into a vicious circle of low growth, social discontent, populist policies, and it becomes difficult to get out of there,” he said.
Follow us on Google News to always stay informed
Get inspired, discover and share. Follow us and find what you are looking for on our Instagram!
