EU and Latin America's great digital opportunity

A protagonist of the unofficial end of summer in the northern hemisphere was Santiago de Compostela, which hosted the first meeting of the Ministers of Economy and Finance of the EU and Latin America and the Caribbean, convened by the Spanish EU Presidency and CAF—development bank of Latin America and the Caribbean.

At the heart of the agenda was the Global Gateway digital initiative, which comes at a critical moment for international cooperation. As stated by High Representative Josep Borrell at the EU-CELAC summit in July in Brussels, Latin America and the Caribbean were long considered "neither the problem nor the solution for Europe." Now, facing climate change, digital transformation, and the labor market challenges brought about by new technologies, new opportunities arise.

In a fragmented world, Europe and the region can act not only as trading partners, but as strategic allies to create new synergies in chip production and supply chains, the expansion of 5G networks, the advancement of AI and its regulation, and in cybersecurity strategies. Both regions share common (not unique) values, including the need for citizen-centered digitalization and governance based on social principles and values, and the priority of curbing CO2 emissions and protecting biodiversity while ensuring economic dynamism. And, notwithstanding the dominance of the United States and China in leading technological developments, and China's economic expansion in the region over the last two decades, Europe remains the main investor in the region with nearly 700 billion euros, with companies that are global leaders in digital sectors.

The current EU-LAC Global Gateway Investment Agenda has four pillars: just ecological transition, inclusive digital transformation, human development, and health resilience. It was established with contributions from Team Europe (mainly from the EU itself, Spain, and France) of EUR 45 billion (just under USD 50 billion at today's exchange rate) until 2027. The initial digital agenda includes about 20 initiatives (of a total of 136), including notably support for connectivity in Colombia, 5G rollout in Costa Rica and El Salvador, cybersecurity in the Dominican Republic, and AI support in Argentina. Similarly, the EU-LAC Digital Alliance is carrying out digital cooperation activities, including the expansion of the BELLA cable and the creation of two Copernicus regional centers in Chile and Panama for disaster risk reduction, climate change, and land and sea surveillance.

Now is the time to make the Global Gateway digital initiative more ambitious, stronger, and more agile. First, we need to expand the announced volume of the initiative with the financial muscle of development banks and corporations, with innovative credit instruments advanced particularly by CAF, IDB, and the European Investment Bank.

Second, the Global Digital Gateway initiative must grow by enhancing its interaction with social and green transitions. In the first case, by investing in training policies to prepare citizens for the future of work, improving healthcare services and medicine and vaccine production with technology, or fostering innovation in agribusiness. Similarly, technology innovations are key to advancing the circular economy and industries such as electromobility, green hydrogen, and clean energy supply chains, as well as helping attain shared goals of biodiversity preservation (greentech) and more open and efficient public administrations. In these industries, Europe boasts global leading business groups that can become key partners such as renewable energy, finance, mobility, and health.

Thirdly, the implementation of initiatives must be streamlined. The establishment of an agile institutional framework with the coordinated involvement of regional development banks is undoubtedly a leap forward, as the mobilization of funds in areas experiencing exponential change is urgent. The region must respond with mobility and without delay (for example, to advance regulatory strategies for AI or the development of 5G networks).

At the meeting of the Board of Directors of CAF in Santiago de Chile, a formal collaboration roadmap between Europe, Latin America, and the Caribbean was launched, with a visit to Brussels and ending in a historic summit of finance ministers from both regions, the ECOFIN, in Santiago de Compostela. This path helped us define a joint investment and cooperation project with ambition and potential, unprecedented in the last decades, where technology is a key driver. It's time to materialize, reinforce and accelerate. The comprehensive human development of Latin America and the Caribbean will be green, inclusive, and digital, or it will not come to be.

This column was also published in El País