Challenges to a Social Pact and Integration in Latin America

CAF—development bank of Latin America—, with the support of the Argentine government, held the CAF Seminar “Challenges for Growth and Development of Latin,America”, which gathered top leaders from various sectors to exchange visions on the challenges facing Argentina and the region in terms of investment and trade in a globalized world, and identify some key tasks for building a new social pact in Latin America.

In his keynote speech, CAF executive presidentLuis Carranza Ugarte noted: “For 50 years we have supported sustainable development and regional integration with USD 188 billion. In the last 20 years alone, we have underpinned 77 integration infrastructure projects for over UDS 31 billion. We have made significant strides in reducing poverty and inequality, but much remains to be done, for which we require a social pact that helps build consensus. Here CAF plays a pivotal role because rather than just a bank, we are development partners. That is our story, our commitment to Argentina and the region.”

In addition, the Secretary of Strategic Affairs of the Presidency of the Nation, Gustavo Béliz, made a presentation on “10 ideas for Latin America Integration.” “We need to think about regional integration with a view towards innovation, social inclusion and meeting the urgent needs of a new type of climate-friendly infrastructure in Latin America,” he said.

In the panel “Challenges on investment and trade in a globalized world,” moderated by Cecilia Nahón, Argentina representative at the World Bank; ECLAC’s executive secretary Alicia Bárcena said that “the backdrop for Latin America is not poverty, is inequality. Redistribution of wealth is a pending task in the region. We must find a way to create next-generation social policies through, for example, new redistributive taxes on the top 1%.” Argentina’s Minister of Productive Development Matías Kulfas added: “We need an integration policy to develop a network of value chains that uses our production matrix to change the region’s distribution matrix”.

Panama’s Minister of Economy and Finance Héctor Alexander noted: “Today one of the great challenges in the digital economy is to import knowledge. We must develop a good strategy to import the knowledge circulating in the world and thus achieve high growth rates and take a leap.” In addition, Paraguay’s Deputy Minister of Economy Humberto Colmán said: “The challenges we have for the region to achieve more equitable growth are significant. CAF has been making an integration commitment through investment in infrastructure projects, which must be maintained to link regional value chains.”

The Seminar continued with a master class by Nora Lustig, professor of Latin American Economics at Tulane University, on inequality, poverty and public policies, where she emphasized that “much remains to be done to ensure a minimum income floor in Latin America. Possible sources of funding include reallocating spending on transfers and subsidies to the poor: For example, Bolivia spends twice as much on transfers as Mexico, but these are not targeted, and poverty rate in Bolivia increases as a result of the net effect of transfers and taxes.”

The panel: “Towards a new social pact in the region” featured Rebeca Grynspan, Ibero-American Secretary-General; Maria Eugenia Bielsa, Minister of Territorial Development and Habitat; Gabriel Katopodis, Minister of Public Works; Pablo Gentili, Secretary of Educational Cooperation and Priority Actions; Victoria Tolosa Paz, executive secretary of the National Social Policy Council; and Luis Scasso, director of the Argentina Office of the Organization of Ibero-American States for Education, Science and Culture (OEI); moderated by Jorge Srur, Argentina representative at the Inter-American Development Bank (IDB).

The conclusions and closing remarks of the meeting held at the Kirchner Cultural Center in Buenos Aires, as part of CAF’s 50th anniversary celebratory activities, were delivered by Christian Asinelli, Undersecretary of International Financial Relations for Development of the Secretariat for Strategic Affairs of the Presidency of the Nation, and Santiago Rojas, CAF representative in Argentina. Click here to view seminar panel videos and images.