The Development Bank of Latin America and the Caribbean (CAF) warned that the region has various vulnerabilities, but one of the most important is that the population pyramid is inverting, which implies that there are more and more older people, but without countries have solved the problem of poverty and inequality.
“There is the issue of growing concern, the demographic issue. The evolution of the demographic pyramid of Latin America in recent years is one of a reduction in the young population and an increase in the elderly population. This is a great challenge, the aging of Latin America without having resolved the problems of poverty and inequality,” said the executive president of CAF, Sergio Díaz-Granados.
During his participation in the “International Economic Forum of Latin America and the Caribbean 2025. How to get back on the path of growth?”, he indicated that the above is important because it is associated with low economic growth and low tax collection.
The head of CAF explained that in the region there is a stagnation of the middle class, a limited reduction in poverty and also a stagnation of extreme poverty, to which is added a persistence of inequality that makes Latin America the region most unequal in the world.
He added that one of the channels that maintains the persistence of inequality is education, since not the entire population has access to it, followed by informality in the labor market, which leads to low productivity, and the lack of a housing policy. .
All of this, added the executive president of the development bank, is reflected in low economic growth, low investment and low productivity, which puts public finances in “check”, with an average growth in the last 15 years of 1.6%. .
“Traditionally, there is a drop in investment, also explained in the last 15 years. When you look at the last 30 years they are not so bad, but when you look at the last 15 the film for Latin America and the Caribbean is beginning to look worse. And there is an issue of low productivity in the last ten years, a product of digitalization in the United States,” he said.
In this scenario of low economic growth, low investment and low productivity in Latin America and the Caribbean, issues such as high crime rates also have an impact, with the region concentrating a third of homicides in the world, an average homicide rate ten times higher. to that of other emerging economies, with 43 of the 50 most unsafe cities in the world and 90% of the cocaine production consumed in the world.
Added to the above is that Latin America and the Caribbean has a problem of loss of democracy, combined with vulnerabilities such as: impact of war conflicts, migration crisis, global debt crisis, natural disasters, the need for an energy and digital transition. , and the transition to “poly-globalization”, in which the era of rapid commercial growth seems to have come to an end.
Opportunities
However, the executive president of CAF highlighted, Latin America and the Caribbean also have windows of opportunity, among which are the development of responsible mining, with essential resources for the global economy such as lithium, copper and nickel, fundamental for the energy transition and the generation of clean energy.
Another opportunity for the region is related to a significant potential to lead the transition towards clean energy that includes the development of renewable sources, the use of natural gas as transition energy and energy efficiency in key sectors.
Furthermore, with fertile soils and vast water wealth, Latin America and the Caribbean can become strategic suppliers of food worldwide, in addition to the fact that the region’s creative and technological talent can be used to develop digital and technological industries. creative.
The biodiversity, cultural wealth and unique landscapes of the region also offer an opportunity to develop sustainable tourism; and deepening regional integration through binational and multinational projects can strengthen value chains, reduce trade costs and increase competitiveness.
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