Enrique García says Latin America needs to increase its average investment rate

(Montevideo, 20 March 2012.) - Latin America needs to raise its average investment rate to ensure that economic activity will maintain a sustained expansion of over 6%, a key requirement for converging to the GDP per capita of industrialized countries and dramatically reducing the high levels of poverty, marginalization and inequality still prevalent in the region.

This was the opinion of Enrique García, president & CEO of CAF – Latin American development bank – given during the forum "Development Models in Latin America. Search for Convergences and Complementarities," recently held at the headquarters of the Latin American Integration Association (ALADI) in Montevideo, Uruguay.

"Average investment in Latin America is not more than 22% of GDP. If we want to grow at 6% or 7% we have to invest 27% or 28% of GDP a regular basis," the CAF president said.

García also emphasized the need to boost infrastructure. He gave the example of Asia where on average 10% of GDP is invested in infrastructure whereas investment in Latin America does not reach 3%. "We have to invest at least 6% of GDP," he added.

Another critical factor was the need to devote resources to education. "Education is the connection between economic growth and social equity, it is the means of giving opportunities to young people from childhood."

Politically, Garcia said that an internal consensus had to be built in each country to develop long-term agendas. The actions that need to be implemented to achieve substantial gains in the growth and development of countries go beyond the terms of governments. "These are agendas for 15 to 20 years."