Latin America is a vast region with immense potential for economic growth. It has large areas of land rich in minerals and other raw materials, and its tropical and temperate climates make it ideal for growing a variety of agricultural products. In recent years, the economy of Latin America and the Caribbean has been facing a setback due to the COVID-19 pandemic. The World Bank is working with member countries to provide support for the pandemic and other development priorities in the region.
The health crisis has had a long-term impact on the region's economies, as it still faces major uncertainties, such as the emergence of new variants of the virus, global inflation, and the Russian invasion of Ukraine. The global economic landscape has changed drastically since the late 1960s, but much remains to be done in terms of national policies and intraregional cooperation to improve linkages with the global economy. Latin America and the Caribbean are also exposed to and vulnerable to disasters, from earthquakes to floods that can devastate entire regions, and hurricanes that devastate Caribbean states. What is most lacking in Latin American integration is precisely the establishment of stronger trade and financial ties between the countries of the Southern Cone and those of the North.
These changes, accentuated by an adverse global environment, could result in a gradual convergence between Mercosur and the Pacific Alliance, as proposed by the Chilean Government. Development in Latin America is not only seen as “economic development” but also as a way to improve living standards. The World Bank is rapidly supporting efforts in Latin America and the Caribbean to address impacts related to COVID-19, through new operations and by redirecting funds from existing projects. China is showing interest in growing its influence in Africa and Latin America.
The committee is composed of a group of prestigious independent Latin American economists, former legislators, and academics with solid experience in macroeconomics, banking, finance, and whose objective is to identify and analyze the challenges and risks for the region. Even some economists working at the Economic Commission for Latin America (ECLAC), a very influential United Nations commission, were influenced by that vision. It offered general guidelines for the development of Latin American and Caribbean countries, including, in particular, the proposal that production should be more competitive internationally, not only to increase exports but also to achieve efficient import substitution. The region should also strengthen its regional financial institutions (CAF) and the Latin American Reserve Fund (FLAR).
This will help ensure that Latin America remains an important part of the global economy.