Opportunities and Challenges: CAF presents its flagship report focused on inherited inequalities in Latin America and the Caribbean

The Report on Economic Development (RED 2022) of CAF, Development Bank of Latin America and the Caribbean, addresses the persistent challenge of inequality, recognizing that the region is one of the most unequal in the world. The report addresses the causes behind this inequality and presents a series of proposals to collaborate with countries in the design and implementation of policies that promote a more equitable distribution of income, wealth, and educational and employment opportunities to citizens.   

Against the backdrop of profound social disparities present in Latin America and the Caribbean, which, were exacerbated as a result of the pandemic, the report delves into the root causes of persistent inequality. Highlighting the exception of Barbados, where remarkable progress has been made in equitable income distribution, the report highlights how inequality continues to be a challenge to building sustainable and inclusive societies in the Caribbean.

The report focuses on three essential channels that forge strong intergenerational ties and perpetuate inequalities in the region: human capital formation, labour opportunities and wealth accumulation. In this context, it highlights the key role of education, particularly in Barbados, Bahamas, Jamaica and Trinidad and Tobago, where high secondary graduation rates have been accompanied by reduced socioeconomic gaps. However, it is noted that in other Caribbean countries, such as Belize, Guyana, Suriname and Haiti, challenges remain in raising educational levels in an equitable manner.

During the opening of the Caribbean regional launch in Barbados, CAF’s Executive President Sergio Díaz-Granados said: "As the report presents, inequality in the region is not only high, but also persistent. There are exceptions, such as Barbados, where notable and rapid progress has been made towards greater equality in income distribution. However, the challenges to generate societies that remain on a path of sustainable and inclusive growth persist in the region. CAF is a strategic partner for the Caribbean in expanding options for financing, technical assistance and knowledge generation, such as this report that we present today.”

This was followed by the Prime Minister of Barbados, Mia Mottley, who said: "Transitioning from analog to digital societies has starkly highlighted the inequalities within our countries. What we must start doing is creating opportunities for our students to believe that they are the leaders of this country not just the cabinet, not the Prime Minister, not the heads of corporations or the labor movement, but every young Barbadian child."

The report notes that while education is fundamental, it is not enough to close income and wealth gaps. Quality employment in the Caribbean is also critical area, with labor informality affecting 60% of the population and youth unemployment, especially among women, presenting additional challenges.

Lucila Berniell, CAF's Executive Economist, delivered the presentation on the RED 2022 in Barbados, where she noted that "despite significant progress in financial inclusion in Barbados, there are still socioeconomic and gender gaps that limit access to sources of savings and financing for productive projects in the economy. With a focus on early, basic and higher education, along with the promotion of employment in key sectors, the RED 2022 report presents an opportunity to transform the future of young people in the Caribbean and continue to fight historical inequalities.”

Following the presentation of the report, Stacy Richards-Kennedy, CAF's Regional Manager for the Caribbean, introduced the panel discussion moderated by CAF's Director of Socioeconomic Studies, Ernesto Schargrodsky. The panel included regional leaders for the key sectors mentioned in the report: Dennis Zulu, director of the ILO office for the Caribbean; Tonni Brodber, representative of UN Women's multi-country office for the Caribbean; and Hilary Beckles, Vice Chancellor of The University of the West Indies.

Finally, Ryan Straughn, Minister of Finance of Barbados, together with Christian Asinelli, Corporate Vice President of Strategic Programming of CAF, made closing remarks.

The RED 2022 publication underscores the crucial opportunities for the Caribbean to address these inherited inequalities. Fostering better educational access from early childhood through higher education, promoting employment in dynamic sectors and working towards greater financial inclusion are key areas to foster increased social mobility for Caribbean youth. Through the Caribbean launch of its flagship report, CAF is placing a spotlight on the unfinished business of tackling inequality across the region, in keeping with its commitment to serve as the bank for economic revitalization. The hope is that through combined efforts - data-driven policies, decisive leadership and targeted development assistance – governments will maintain a focus on this important undertaking to disrupt cycles of poverty, break the intergenerational chains of inequality and build a path towards a more equitable future.