World-renowned authorities and experts analyze the new vision of productive development policies presented by ECLAC

Authorities, experts and academics from some of the most renowned study centers worldwide met in a high-level online seminar at the headquarters of the Economic Commission for Latin America and the Caribbean (ECLAC) to discuss the new vision of productive development policies (PDP) presented today by the United Nations regional organization at the launch of the first edition of its flagship publication Overview of Productive Development Policies in Latin America and the Caribbean, 2024: How to promote the great productive transformation that the region requires?.

In three panels, the specialists discussed the challenges, governance and institutions and subnational efforts for the implementation of productive development policies in Latin America and the Caribbean, and the need to scale up and improve them to promote productive transformation and productivity growth in the economies of the region.

The seminar was chaired by the Executive Secretary of ECLAC, José Manuel Salazar-Xirinachs, and the Director of the Division of Productive and Business Development of the United Nations regional organization – in charge of the report – Marco Llinás.

In the first panel, entitled “Challenges of current productive development policies in the region,” Annalisa Primi, Head of the Economic Development and Transformation Division of the OECD Development Centre; Fuad Hasanov, Senior Economist at the International Monetary Fund (IMF); Nathan Lane, Associate Professor of Economics at the University of Oxford; José Antonio Ocampo, former Minister of Finance and Public Credit of Colombia and former Executive Secretary of ECLAC; and Uallace Moreira, Secretary of Industry of the Ministry of Development, Industry, Trade and Services of Brazil, addressed the diagnosis presented by ECLAC in its document on current efforts in the area of ​​PDP, which are characterized by being: i) marginal compared to the productivity challenge that exists and compared to what other countries are doing in this area; ii) disjointed, with great opportunities for improvement in the coordination between the efforts that different ministries, agencies, actors and levels have been making; iii) discontinuous, in the face of changes in government, when these agendas should be medium and long term; iv) managed mainly from a centralist approach (top-down), from the capitals, without greater involvement of the territories and local actors; v) poorly evaluated; vi) not necessarily aligned with the new vision of productive development policy that ECLAC has been proposing; and vii) of little impact, if examined in light of the region’s poor performance in terms of productivity and growth.

They highlighted the importance of creating specific sectoral policies; the differences between Latin American countries and companies – which means that a particular policy does not fit everyone equally; regional integration in productive matters and the need to position productive development policies at the center, integrating all the actors in the economies; and how to scale up these policies and survive government cycles so that they are long-term. They also addressed other issues that could be further explored, such as new lines on science, technology and innovation policies and the role of development banking in these processes.

In the second panel, entitled “Governance and institutions for productive development policies in the region,” Gonzalo Rivas, Head of the Competitiveness, Technology and Innovation Division of the Inter-American Development Bank (IDB); Piero Ghezzi, former Minister of Production of Peru; Charles Sabel, Professor of Law and Social Sciences at the Faculty of Law of Columbia University (United States); Amir Lebdioui, Associate Professor of Political Economy of Development and Director of the Center for Technology and Management for Development at Oxford University; and Camilo Rivera, Deputy Minister of Business Development (e) of the Ministry of Commerce, Industry and Tourism of Colombia, referred to the experience both in the region and internationally with regard to institutional capacities and governance mechanisms (coordination bodies, routines, incentives, or others) that support the implementation of productive development policies.

They argued that there is a problem of atomization and fragmentation, and that the diagnosis made by ECLAC on the state of PDPs in the region is therefore correct. They indicated that the issue of governance and the creation or strengthening of institutional capacities have to go hand in hand. In addition, they insisted that the management capacity for the implementation of these policies has to be built in practice, with experimental governance. Likewise, they pointed out that each country has to find its own path, since there are no standard models. And they concluded that development has to be born from the local and the local must have the capacity to dialogue with the national and vice versa.

Finally, in the third panel entitled “Subnational efforts in productive development policies in the region”, the participants were Paola Pabón, Prefect of the province of Pichincha, Ecuador; Christian Ketels, Senior Associate at the Institute for Strategy and Competitiveness of Harvard Business School, Harvard University (United States); Nicolás Grau, Minister of Economy, Development and Tourism of Chile; Rebeca Vidal, Senior Executive of Technical and Sectoral Evaluation of CAF-Development Bank of Latin America and the Caribbean; and Vidal Llerenas, an expert in productive policy from Mexico, who discussed the technical, but also political, reasons for giving a territorial focus to efforts in the area of ​​PDPs argued by the ECLAC report. Under this approach, subnational governments have a key role to play in the PDPs of their respective territories.

The panellists emphasised the importance of defining and distributing roles between national and subnational governments, that the transfer of decision-making power from the national to the subnational government should not only be a matter of responsibilities, but also of capacities and resources, and the relevance of the exchange of experiences between countries in the region and the coordination between governments, as well as with international organisations and development banks, in order to strengthen the institutional capacities of the territories.

In his closing remarks at the seminar, ECLAC Executive Secretary José Manuel Salazar-Xirinachs expressed his gratitude for the positive reception that the organization’s report on productive development policies in Latin America and the Caribbean has had. “By making an annual report on these issues, our objective is to better establish this conversation in each country and at the regional level with a view to scaling up and strengthening these policies. There is no other way out of the low capacity-to-growth trap in which the region finds itself,” he declared.

“It is not just about growth, but about promoting greater social inclusion, reducing inequality and promoting environmental sustainability. Productive development policies contribute to all of this,” the senior UN official concluded.