The Global South needs new partnerships

At the relaunch of the annual CAF-LSE Conference, international experts gathered in London to discuss the rising prominence of regions like Latin America, the Caribbean, and Asia in global trade, digital transformation, the energy transition, green growth, and the fight against climate change.

Cooperation between Asia, Latin America, and the Caribbean can be crucial to tackling shared challenges like climate change, inequality, boosting productivity, and building modern, resilient infrastructure. Overcoming these challenges requires solutions tailored to local contexts, and South-South cooperation could play a pivotal role, especially through the exchange of resources, knowledge, and experiences.

This was one of the main takeaways from the CAF-LSE Conference in London, which brought together a distinguished group of experts from the public and private sectors and academia to chart a new roadmap for relations among Global South countries and to discuss topics such as outsourcing, immigration, infrastructure investments, and the impact of U.S. election results on the region.

Sergio Díaz-Granados, CAF’s Executive President—a development bank for Latin America and the Caribbean—emphasized the urgency to act to close the region’s historic gaps: “The time for debating the causes is over. The time for action is long overdue.”

Díaz-Granados also stressed the importance of Latin America and the Caribbean successfully navigating the triple green, digital, and energy transition to address poverty and inequality—critical issues for the region. He highlighted CAF’s commitment to mobilizing more resources for biodiversity and the environment, with the ambitious goal of directing at least 40% of approvals toward green initiatives by 2026. “Without meaningful actions, this pivot towards Latin America and the Caribbean will also be left behind,” he concluded.

The CAF-LSE conference renewed the collaboration between the two institutions and offered a vision of a future where the Global South plays a central role in shaping the world economy. Larry Kramer, President of the London School of Economics, expressed his gratitude to CAF for its years of support to LSE and its effort in securing speakers for the conference’s three panels: “The topics being addressed today are crucial, not only for the region but globally.”

One of the panels focused on climate diplomacy in Latin America and the Caribbean, a key player in the planet’s environmental sustainability. Alicia Montalvo, CAF’s Manager of Climate Action and Positive Biodiversity, highlighted the importance of integrating biodiversity into climate diplomacy. She emphasized that political determination, technology, and funding are necessary to address the climate crisis and also tackle poverty and inequality to ensure a successful transition to sustainability.

Another topic covered at the conference was Asia’s growing role in the economy and geopolitics of Latin America and the Caribbean. The expansion of Asian investments in sectors like tourism, energy, and infrastructure has created a new dynamic in the region, traditionally dominated by the United States and Europe.

Stacy Richards-Kennedy, CAF’s Regional Manager for the Caribbean, noted that this transformation reflects a significant shift in trade and investment relations. She explained how the Caribbean is emerging as a crucial connection point between Asia and the United States, underscoring the region’s strategic role as a gateway to the southeastern U.S. and Asian economies. Richards-Kennedy also emphasized the importance of key sectors where Asia has intensified its involvement, particularly in tourism and infrastructure and energy investments, areas that are shaping the region’s economic growth and sustainable development.

The final panel of the conference focused on exploring new development financing mechanisms. Gabriel Felpeto, CAF’s Vice President of Finance, explained that the region needs to mobilize new, innovative financial resources, with CAF becoming the green bank of the region by integrating climate action across its portfolio while continuing to fund sectors like infrastructure, education, and health.

Felpeto also explained that CAF’s financial strategy is based on three pillars: expanding our regional and global strategic partnerships, mobilizing new resources through innovative financial solutions like hybrid capital, guarantees, and green bonds, and offering tailored solutions to our clients. An example is the recent debt-for-nature swap in El Salvador for watershed conservation, totaling USD 1 billion.

The annual CAF-LSE conference concluded with a call to action. In a constantly changing world, Latin America and the Caribbean have a historic opportunity to transform their economies through strategic partnerships with Asia and other regions of the Global South. However, seizing this opportunity will require significant efforts to harmonize standards, foster greater collaboration, and create the necessary conditions for effective project implementation.