Rebuilding Latin America from the Inside
"Rebuilding Latin America From the Inside," LALP’s first 2021 webinar featuring IDB President Mauricio Claver-Carone in conversation with Georgetown University’s Latin American Board former and current Chairs focused on how the public and private sector, multilateral organizations and academia must come together to promote growth and prosperity in Latin American, a region that has been particularly affected by the effects of the COVID-19 pandemic. The discussion was moderated by Muni Jensen, senior advisor at Albright Stonebridge Group and included introductory and closing remarks by LALP executive director Georgetown University Professor Ricardo Ernst.
By Miguel Mendoza (C'23)
Obstacles and Opportunities
2020 marked Latin America and the Caribbean's biggest GDP contraction since 1821. 40M people lost their formal full-time jobs and 45M people have fallen into poverty. Latin America only makes up 8% of the world's population, yet it has made up a third of global deaths from COVID at the time of this webinar. COVID-19 has exacerbated the region's already most pressing issues of social inequality, negative growth and social unrest. Therefore, the questions and solutions presented by this webinar's panelists come at a more urgent time than ever.
Mauricio Claver-Carone, President of the Inter-American Development Bank (IDB), spoke about how the IDB is committed to creating innovative solutions and opportunities for the region to avoid another lost decade. Claver discussed the IDB Plan “Reinvesting in the Americas: A Decade of Opportunity." This five-year strategy aims to tackle five areas of pressing issues in the region: 1) integration, supply chains and nearshoring, 2) digital economy, 3) SMEs, 4) gender, 5) climate.
Mauricio Claver- Carone was joined by former Chairmen of the Latin American Board Samuel Lewis and Alberto Beeck and the current Chair Manuel Balbontin.
A Dire Panorama
Samuel Lewis Navarro, Former Vice President and Foreign Minister of Panama, spoke about how COVID had a particularly negative effect on the region,
23 out of the 33 countries in the region had a contraction in their GDP growth, and 14 of those countries already had a negative growth rate. Fiscal deficits were the norm and all governments were forced to shut down their countries.
Lewis emphasized the responsibility of multilateral organizations, such as the IDB, in the face of such challenges. He also spoke about the need to lay down groundwork so that the opportunities described in “Reinvesting in the Americas: A Decade of Opportunity” can be implemented in the region. As Lewis pointed out, there is increased pressure on governments in the face of existing and rapidly deteriorating social issues.
Leading the Recovery with the Private Sector
Manuel Balbontin, current Chairman of Georgetown University's Latin American Board, continued the conversation on both the distinctly drastic effects of COVID on Latin America and the importance of the private sector in fostering recovery and growth in the region.
Balbontin pointed out several reasons why Latin America's private sector could lead the region's path to recovery and growth. For instance, the private sector employs 85 to 93% of all employment in the region and is prone to continuing investments in the region. It is also well-capitalized in the region, and that stability will allow them to help in this process. Balbontin highlighted investment as the key to creating jobs and growth in the region. He also pointed out the role of the public sector in supporting the private sector, saying, "The government has to make sure not to overregulate to allow for this innovation to happen."
Balbontin echoed Claver and Lewis's emphasis on the importance of nearshoring for Latin America to become a supplier of high value-added products to the world following COVID. Finally, he emphasized the critical role of academia. Specifically, how programs like Georgetown University´s Latin America Leadership Program (LALP) educate people from both the public and private sector, promoting innovation and competitiveness in the region.
Creating Connections: Digitalization
Alberto Beeck, former LAB Chairman and Managing Partner of Cranely Investments Holdings, discussed the impact of COVID on both healthcare and employment. According to Beeck, COVID has accelerated the adoption of existing healthcare technologies by five to ten years in some cases. Beeck highlighted the opportunity to expand telehealth's reach in Latin America, not only to reach more people but to provide them with better quality healthcare. He also recognized the trend of rapid deglobalization globally, brought on by trade barriers, nearshoring and immigration barriers. Furthermore, he brought attention to the rapid globalization taking place in the online knowledge economy, saying, "If you're looking at the future, clearly, the world that is going to grow faster is the online world."
Beeck stressed the need to increase connectivity and the quality of existing connections in the region. Finally, he spoke about the importance of data and the need to promote data education, emphasizing the importance of providing basic data educational skills to lower socioeconomic classes in the region to develop jobs in the growing digital economy.
Muni Jensen moderated a Q&A section in which Claver fielded questions from his fellow panelists and viewers watching the webinar. In this final part of the forum, Claver reiterated the importance of the private sector in the region's recovery and growth,
The recovery in the region is going to be led by the private sector because there is no other choice. So, at the end of the day, it's how we incentivize, how we mobilize that private sector involvement, confidence and financing.
Claver called attention to the role of the IDB Lab, which he calls an "innovation incubator," in aiding start-ups in the growing world of digitalization. He also highlighted the role of IDB Invest in maximizing social, economic and environmental development in the region. Claver made the U.S.'s role clear not just in the IDB, but in the region as a whole. He stated that, for the first time in a while, Latin American countries want to see greater commitment from both U.S. companies and the U.S. Congress.
Reflecting both the urgency to find solutions to the critical economic, social and political challenges facing the region and the need to work together to do so, Ernst concluded with the following remarks:
We all need to work together for this. As I always like to say: If not us, who? If not now, when?