The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), José Manuel Salazar-Xirinachs, remarked today that the green transition and productive development policies are essential elements for the urgent and necessary change in the development model of the region, during one of the main sessions of the XIV Ibero-American Business Meetingwhich takes place in the Dominican Republic within the framework of the XXVIII Ibero-American Summit 2023.
The highest authority of the regional commission of the United Nations participated in the session entitled “The public gaze: Economic Perspectives of Ibero-America”, where the report was presented Latin American Economic Outlook (LEO) 2022: Towards a green and just transitionprepared jointly by ECLAC, the Development Center of the Organization for Economic Cooperation and Development (OECD), CAF-Development Bank of Latin America and the European Commission, a report that was originally launched in November 2022 during the COP 27 made in Egypt.
The high-level event was also attended by José Manuel Vicente, Minister of Finance of the Dominican Republic; Ulrik Vestergaard Knudsen, OECD Deputy Secretary General; Ragnheiður Elín Árnadóttir, Director of the OECD Development Center; Katja Afheldt, Ambassador of the European Union in the Dominican Republic; and Alicia Montalvo, CAF’s Manager of Climate Change and Positive Biodiversity. It was moderated by Andrés Allamand, Ibero-American Secretary General (SEGIB).
The fifteenth edition (2022) of the LEO report Latin American Economic Outlook) explores the possibilities of systematically advancing in the green transition by promoting a new energy and productive matrix, but doing so through a transition that is also fair, that is, that strengthens social protection systems, promotes job creation quality formal education and reduce the existing differences between socioeconomic groups, territories and generations. Added to this is the need to promote new sources of financing and strategic alliances and renewed regional and international cooperation.
“As we have been saying, Latin America and the Caribbean urgently need to transform its development model towards a more productive, inclusive and sustainable one. The green transition and the productive and digital transformation are essential elements. The consequences of the COVID-19 pandemic and the armed conflict in Ukraine have reminded us of the weak response capacity to crises, and the great persistent vulnerabilities in the region. Low resilience and high vulnerabilities are associated with certain structural problems, such as weak social protection systems, low productivity, our fragile institutions, and a development model that is not environmentally sustainable”, stressed José Manuel Salazar-Xirinachs in his intervention.
Regarding the current situation, the Executive Secretary of ECLAC recalled that according to the latest estimates by the organization, the region closed 2022 with a growth of 3.7% and in 2023 significantly lower rates are expected, around 1.3% , which will complete a decade in which the region’s average growth will have been only 0.9%, less than the 2% of the famous “lost decade” of the 1980s. In addition, by the end of 2022, 32.1% of the population of Latin America and the Caribbean -201 million people- was in a situation of poverty and 13.1% -82 million- in a situation of extreme poverty, state It mainly affects women, children and the elderly.
On the other hand, he indicated that the region suffers disproportionately from the consequences of climate change: 13 of the 50 countries most impacted by this phenomenon in the world belong to the region. Meanwhile, although the participation of Latin America and the Caribbean in total greenhouse gas (GHG) emissions is only 8.1% of the world total, the truth is that emissions have grown steadily in the last two decades at +61%. “This increase in emission levels, together with the high costs of inaction, highlight the need and benefits of urgently adopting adaptation and mitigation policies,” he emphasized.
Salazar-Xirinachs explained that the LEO report highlights the possibility, or even better, the wisdom of considering the green transition as a “game changer” that allows us to go beyond the fight against climate change. “In reality, the green transition, or environmental big push, offers us a unique opportunity to combine economic and social measures with green policies and financing in a comprehensive way to boost investment, growth, employment and well-being while simultaneously help the planet”, he remarked.
According to the document, a green and just transition allows progress in the diversification and adaptation of energy systems, which in turn would allow progress towards universal access to energy, given that there are still more than 17 million people in the region. They do not have access to electricity. In addition, through a green transition, the deployment of new investments, greater innovation, and the development of new industries can be promoted, and it has great potential to generate higher-quality jobs and contribute to reducing informality.
“The green transition also brings some challenges, particularly in a region that still has limited financing capacity and does not have access to some technologies and capabilities. And it is in this sense that it will be fundamental to reinforce our collaboration and our commitment to work together in the transformation of the development model towards one that is more productive, inclusive and sustainable. A much more permanent and in-depth work that involves the public sector, companies, the academic sector and civil society”, the ECLAC Executive Secretary finally declared.
