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New investment agenda needed in Latin America and the Caribbean to boost growth, job creation and sustainable development

 

15/12/2023 – To achieve more sustainable development, countries in Latin America and the Caribbean must increase both the levels and the quality of investment, says the Latin American Economic Outlook 2023: Investing in Sustainable Development, presented today in Santiago de Chile at the United Nations Economic Commission for Latin America and the Caribbean Headquarters.

According to the 16th edition of the report, more proactive investment strategies are needed to accelerate economic and social progress and remedy enduring structural weaknesses.

Countries in Latin America and the Caribbean offer opportunities in sectors as varied as health-related manufacturing, agribusiness, sustainable tourism and renewable energy, and have massive reserves of critical minerals. The region has been attracting relatively high levels of foreign direct investment: even as global foreign direct investment declined by 24% in 2022, inflows to countries in Latin America and the Caribbean increased by 55%, reaching almost USD 225 billion. These inflows are important to boost productivity and innovation.

However, sluggish domestic public and private investment in most countries of the region, reflecting low levels of national savings, has been keeping total investment at only 20% of GDP on average in 2022, against 23% of GDP in high-income economies and 40% in emerging and developing Asia.

This Latin American Economic Outlook calls for countries in Latin America and the Caribbean to adopt a new investment agenda to boost growth, create more formal jobs, and advance towards more sustainable development by:

 

  • Improving the business and investment climate and public governance through efficient regulation and greater transparency and integrity. 
  • Promoting key strategic sectors with significant opportunities for growth and job creation, including sustainable agriculture and food systems, renewable energy, and health and social care. 
  • Focusing investment on infrastructure for telecommunications, water, sustainable transport and clean energy.

 

This new investment agenda for Latin America and the Caribbean must be supported by policies aiming to support production transformation, and improve financing and human capital by: 

  • Aligning this investment agenda with production development policies, including through close collaboration between the public and private sectors and academia, both at the national and subnational levels.

  • Improving financing of investment through better targeting of public spending; adopting stronger fiscal frameworks; focusing regional development banks’ support more on small and medium-sized enterprises; and encouraging the expansion of innovative debt instruments, notably Green, Social, Sustainability and Sustainability-linked bonds. 
  • Enhancing targeted social protection and education and skills policies to ensure positive effects of new investments on the creation of formal jobs and gender equality.

The Latin American Economic Outlook is jointly produced by the Development Centre of the Organisation for Economic Co-operation and Development (OECD), the United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC), the CAF-Development Bank of Latin America and the Caribbean, and the European Commission. More information about the report: www.oecd.org/dev/americas/economic-outlook. Follow the launch on social media at #LatinAmerica & #EconomicOutlook.

 

Press contacts:

- CAF: [email protected]; Tel: +57 (1) 743-7368

- ECLAC: [email protected]; Tel: + (56 2) 2 210 2040

- OECD Development Centre: [email protected]; Tel: +33 (0) 145 24 82 96

 

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