1. Regional Cooperation as a Catalyst for Development
The case of Latin America and
the Caribbean
Alicia Bárcena
Executive Secretary
Economic Commission for Latin America and the Caribbean
Dialogue with the ECOSOC
Geneva, 8 July 2011

2. Where does Latin America and the Caribbean stand today?
Learning from the past
Maintaining a prudent macroeconomic stance
Socially progressive
Marking out a new development agenda based on rights to equality
Unprecedented context: two-speed global economy – sluggish in developed countries and dynamic in emerging countries
Performance of LAC was outstanding in 2010 thanks to both domestic and external factors
Challenges:
Risk of inflation
Surge in capital inflows coming into the region
Currency appreciation
Reprimarization of the economies
Current deficits
Food and Energy Price volatility
Broadband deficiencies
Asymmetric vulnerability to climate change
El impacto de las políticas contra cíclicas y a la recuperación del comercio, remesas e IED
El dinamismo exportador del decenio radica en América del Sur, donde están concentrados los exportadores de productos básicos
La apreciación de las monedas en la región causada por la expansión monetaria en los países desarrollados dificulta objetivos de desarrollo con productividad
México por el contrario, experimentó una fuerte baja en el dinamismo de sus exportaciones. Esto se explica fundamentalmente por dos motivos:
Sus exportaciones están concentradas en manufacturas (las cuales no han tenido incrementos de precios comparable a las de las materias primas) en cerca de un 80%; y
2) Ha perdido presencia en el mercado de los Estados Unidos debido a la creciente competencia asiática y especialmente China.
En C. América, salvo Nicaragua y Panamá, el desempeño de esta década es inferior al de la década pasada.

3. LATIN AMERICA AND THE CARIBBEAN: TRADE BY ORIGIN AND DESTINATION
Trade has played a key role in the region’s economic recovery, thanks to South America’s trade links with Asia-Pacific, especially China
LATIN AMERICA AND THE CARIBBEAN: TRADE BY ORIGIN AND DESTINATION
(Index: January 2006 = 100)
EXPORTS
(by destination)
IMPORTS
(by origin)
Los intercambios comerciales de América Latina y el Caribe con los principales socios extrarregionales e intrarregionales en el período posterior a la crisis crecieron notablemente, recuperándose de la marcada contracción de Al comparar el crecimiento del valor de las exportaciones e importaciones en el primer semestre de 2010, en relación con igual período de 2009, se comprueba que las exportaciones e importaciones a Asia son las que crecieron más rápido en este período. La persistente demanda de China y del resto de Asia estimuló la exportación de varios de los productos básicos de la región, mientras que los precios internacionales de dichos productos se han mantenido elevados. El comercio con los Estados Unidos y el comercio intrarregional crecieron a tasas moderadas. Al contrario, el comercio con la Unión Europea todavía no alcanzó los niveles de previos a la crisis.
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.

4. Commodity prices have increased aggravating the risk of primarization
LATIN AMERICA AND THE CARIBBEAN: STRUCTURE OF WORLDWIDE EXPORTS SINCE THE EARLY 1980s
(Percentages of the regional total)
LATIN AMERICA: COMMODITY PRICE INDEX
(Index: 2000 = 100)
El patrón de crecimiento internacional y la especialización de la región, el alza en los precios de los productos básicos incentiva la “reprimarización” de la estructura exportadora Entendemos por reprimarización el aumento en la participación de las materias primas no procesadas (barra verde) en las exportaciones totales.
Esto no significa creer en la tesis de la “maldición de los RR.NN”
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of United Nations, Commodity Trade Data Base (COMTRADE).

5. Why time for equality? Main gaps in Latin America and the Caribbean
Inequality and social protection
For the first time in recent history there has been progress in the fight against inequality
Investmen t and financing
Investment, at 21.6% of GDP, is insufficient for development. Low availability of domestic savings
Tax system
Regressive tax systems; weak non- contributory pillar
Productivit y
Close the external (with the technological frontier) and domestic (between sectors and actors in a country) gaps
Education and human capital
Improve access and quality, especially secondary cycle
Although many countries are unlikely to achieve the primary-education target, completed primary schooling is not an educational capital sufficient for obtaining employment. The minimum educational level for a suitable entry to the labour market in order to avoid a situation of relative poverty is a full secondary education. In most countries, complete secondary schooling is required.
The region should focus more on secondary education. There have been considerable advances in this area, particularly in terms of coverage, equal access, grade promotion and the completion of secondary education are priorities for the region, and a target which is a long way from being achieved.
This situation is an Achilles’ heel for the fight against poverty and efforts to raise productivity and improve the competitiveness of the economies of the region.
Attention must be given to deficiencies and inequalities in the quality of education, which hold back economic and social development and certainly do not help to build active citizenship and democracy.
To move towards productivity convergence, it is essential to look beyond the commodity price boom: macroeconomic, productive and territorial long-term policies with own vision
Consensus on priorities and respective funding: a Fiscal Pact with redistributive effect - with access to innovation, labour institutions and job security
Education is key in the translation of productivity gains into jobs and welfare, when articulated with a labour market geared towards inclusion and equality
New equation: State-market-society 5

6. LATIN AMERICA: POVERTY RATES, 1980-2008
In terms of poverty, the lost decade of the 1980s was followed by a difficult 1990s and a new century with notable achievements. Moreover, poverty and extreme poverty rose less than expected in 2009 and decreased in 2010
LATIN AMERICA: POVERTY RATES,
(Percentages)
Porcentaje de Población
Indigentes Pobres no indigentes Total de Pobres
2010 a/
Volumen de Población (millones de personas)
Indigentes Pobres no indigentes Pobres
2010 a/
a/ Estimation.
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official information.

7. For the first time in the history of the region there were improvements in equality
A decade without progress in income distribution…
… Followed by a decade with some steps forward
Countries in which inequality increased
Countries in which inequality decreased
Countries in which inequality decreased
Countries in which inequality increased
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of household surveys conducted in the respective countries.
a/ Urban areas.

8. in Latin America and the Caribbean
Pending challenges
in Latin America and the Caribbean
Review macroeconomic policy to mitigate volatility, stimulate productivity and increase inclusion, making it essential to strengthen fiscal equilibrium in the medium term and develop financial systems with heightened capacity for national saving and support for investment
Bridge gaps in innovation and productivity for growth with equality and sustainability
Slow progress in reducing poverty and inequality
Regressive tax systems
Changing demographic trends
Gender equality agenda
Climate change vulnerability and the need to develop low-carbon economies
Need to increase energy efficiency and use of renewable energies
En la región, los modelos de desarrollo reciente crearon incentivos centrados en ventajas competitivas estáticas y condujeron al progresivo debilitamiento de las capacidades tecnológicas, e incluso a su pérdida. Esto ante la falta de estímulos para el desarrollo y la consolidación de capacidades más sofisticadas. Por tanto, cuando irrumpió la crisis internacional de 2008 y 2009, AL y C se encontraba en desventaja dados los débiles cambios estructurales, la escasa diversificación de la producción y un limitado desarrollo de los sectores que realizan un uso más intensivo de conocimientos y capacidades tecnológicas, así como un ensanchamiento de la brecha de productividad con respecto a otras regiones. Así mismo, la region ha tenido lentos avances en la reducción de la pobreza y la desigualdad, con sistemas tributarios regresivos, y cambios de tendencia demográfica. Se tienen todavía como reto la agenda de igualdad de género, el cambio climático y la necesidad de desarrollar economías bajas en carbono, así como el de incrementar la eficiencia energética y uso de energías renovables, para facilitar el proceso de desarrollo tan anhelado. 8

9. Latin America and the Caribbean is characterized as a middle income region
The concept of “middle income” masks large disparities in the economic and social situations of the Latin American and Caribbean countries:
Levels of poverty and distribution of income
Institutional development
Ability to generate national savings
Capacity to access international financial markets
Size and level vulnerability (small open economies in the Caribbean)
Countries in the region must deploy further efforts to reduce inequality within their territories and in poor trans-boundary areas
Find ways to realize the synergies between social equality and economic vibrancy
In spite of improved economic and social performance, the region still has limited capacity to tackle important gaps relying on domestic resources only
THE CONCEPT OF “MIDDLE INCOME” MASKS LARGE DISPARITIES IN THE ECONOMIC AND SOCIAL SITUATIONS OF THE LATIN AMERICAN AND CARIBBEAN COUNTRIES
The operating definition of “middle income” fails to reflect the heterogeneity of the countries which make up that group and the great diversity of their needs.
Not all countries need the same amount or the same type of official aid, or for the same reasons.
The countries of Latin America and the Caribbean, regardless of their individual characteristics, have seen a fall in their share of ODA flows.
The relative share of Latin America and the Caribbean as a recipient of ODA fell from 9% of the total in 1990 to 7% in 2008.
ODA allocation criteria must be updated and improved in order to:
Respond to the heterogeneity of the countries’ needs
Prevent the allocation of ODA from favouring certain groups of countries to the detriment of others. 9 9

10. Challenges for public management
Tax systems deliver low levels of revenue and are badly designed
A regressive tax structure
A low tax burden in most countries
High levels of evasion
Widespread exemptions
Social spending with little redistributive impact
A weak non-contributory pillar
In terms of production: minimum support provided to SMEs and segmented access to financing
Insufficient investment for development
In infrastructure
In research, science and innovation
In development banking institutions: inclusive financing
In cleaner matrices from the environmental perspective
Follow-up to the CELAC initiatives to foster policy dialogue on addressing the global economic and financial crises
Technical support to the International Comparison Programme (ICP) for harmonization of statistics on prices and national accounts in the Caribbean
Regional Seminar on Fiscal Policy (ECLAC-OECD-IMF) for policy dialogue and sharing of experience

11. The role of cooperation for the region’s development is essential
The “middle-income” concept needs to be rethought as a criteria for allocating ODA resources
International cooperation: international community must support development efforts, considering that over 90% of poor in the region live in non-poor countries
Increasing ODA towards the region, channeled with greater efficiency and effectiveness through strengthened institutional capacities
Combining ODA with innovative financing and other cooperation mechanisms such as technology transfers for sustainable development
Regional cooperation and integration, in their different modalities, are crucial catalysts for:
Cross-fertilization of transversal issues and strengthening the regional voice in global fora
To improve the articulation of development strategies at the regional and domestic levels
To enhance South-South cooperation and sub-regional integration schemes
THE CONCEPT OF “MIDDLE INCOME” MASKS LARGE DISPARITIES IN THE ECONOMIC AND SOCIAL SITUATIONS OF THE LATIN AMERICAN AND CARIBBEAN COUNTRIES
The operating definition of “middle income” fails to reflect the heterogeneity of the countries which make up that group and the great diversity of their needs.
Not all countries need the same amount or the same type of official aid, or for the same reasons.
The countries of Latin America and the Caribbean, regardless of their individual characteristics, have seen a fall in their share of ODA flows.
The relative share of Latin America and the Caribbean as a recipient of ODA fell from 9% of the total in 1990 to 7% in 2008.
ODA allocation criteria must be updated and improved in order to:
Respond to the heterogeneity of the countries’ needs
Prevent the allocation of ODA from favouring certain groups of countries to the detriment of others. 11

12. Regional initiatives to address inequality and social protection gaps
The Inter-American social protection network promotes exchange of experience on the formulation, implementation and impact of social protection and employment policies and measures with the support of OAS- ILO- ECLAC :
Emphasis on conditional transfer programmes
SICA has created the Central American Secretariat for Social integration (SISCA) fostering sub-regional cooperation on social protection issues
CAN countries place increasing emphasis on the sub-regional policy dialogue on social protection, the care economy and families
The Caribbean Development Round Table (Trinidad and Tobago, September 2011) will focus on identifying challenges faced by small economies in social protection and regional integration, among other issues
Ministerial conferences foster sub-regional dialogue on the impact of the rise in commodity prices on social development in Central America and South America (Santiago and El Salvador) with UN inter-agency support
The regional plan of action on information society eLAC 2015 promotes e- health policies
CEPAL-FAP-IICA seminars in Santiago and El Salvador on price volatility In commodities and their impact on food prices and development.
Social expenditure: harmonization de methodology for measuring social expenditure

13. Investing in education and the region’s human capital
Priorities of regional cooperation and inter-regional partnerships :
Improve the quality and equity in primary education
Reduce traditional and emerging gaps in education (illiteracy, coverage, reproduction of social inequities, learning gaps, access to an quality of employment, access to and use of ICT) education).
Enhance the efficiency of social spending in education
Ibero-American countries have established “Educational goals 2021” in three phases: complete secondary/preschool
billion
billion
billion
The regional plan of action on information society eLAC 2015 promotes policies aimed at enhancing access to and the use of ICTs in education
Organización de Estados Iberoamericanos para la Educación, la Ciencia y la Cultura (OEI)
2008: Ibero-American Summit request the identification of a set of Educational Goals 2021.
2009: Ministers of Education of Ibero-America agreed on a set of eleven “Educational Goals 2021: the education we want for the generation of the Bicentennial”
Educational Goals 2021: eleven major goals
1.To strengthen and expand the society’s participation in educational acts
2.To increase opportunities for and provide due educational attention to the diverse needs of the students
3.To increase the supply of early education and promote its educational potential
4.To achieve universal primary and basic secondary education and improve their quality
5.To provide a meaningful curriculum that ensures the acquisition of skills
6.To increase youth participation in higher secondary education, in vocational education and in university
7.To promote the connection between education and employment through technical vocational education
8.To make available to all people opportunities for education/training throughout their entire life
9. To strengthen the teaching profession
10. Expand Ibero-American knowledge space  and strengthen research activities
11.To invest more and more efficiently in education
Education is a priority on the agenda of the EU-LAC Summits and a core element of the inter-regional cooperation strategy on information society 2)
As technical secretariat of the regional Plan of action eLAC, ECLAC promotes inter-regional cooperation to strengthen policies aimed at enhancing access to and the use of ICTs in education through:
- Generation of knowledge and identification of good practices in e-education in the region and in other regions of the world (publication on the State-of-the-art of policy-making  in e-education currently in preparation)
- Development of bi-regional networks of policy-makers and practitioners
- Capacity-building, advisory services and policy recommendations with Ministries of education of the region upon request

14. Strengthening financing, investment and productivity in the region
The Rio Group and CELAC promote regional common positions in the International follow-up Conferences on Financing for Development (Regional consultation, Santiago, August 2011)
The Central American Council of Ministers of Finance and Economy (COMIECO and COSEFIN) are currently developing the Plan for investment and financing for Central America, Panama and the Dominican Republic
Regional cooperation in the area of Information and Communication Technologies (ICT) to foster development
Regional Plan of action eLAC 2015
Regional dialogue aimed at ensuring universal access to broadband and creation of a Regional Information Center on Broadband (ORBA)
Mercosur Group for Productive Integration aimed at promoting SMEs, investments and value chains
Inter-regional initiatives: Ibero-American policy dialogue on the development of SMEs (IBERPYME) and “Pathways to prosperity in the Americas”
Priority issues for the region’s development agenda:
More selective conditions for accessing external financing and possible restructuring of national and international financial architecture
Need to redefine regional integration models, financial architecture and access to financing for investment and social protection in middle-income countries and in small economies
Broadband regional dialogue aimed at ensuring universal access to broadband in South America and Costa Rica of which ECLAC is technical secretariat and operator of ORBA (Observatorio regional de banda ancha)
Participación en seminarios de discusión de buenas prácticas en políticas públicas para pymes en el marco de actividades de la SEGIB con IBERPYME para crear y financiar mecanismos de transferencia de buenas prácticas entre países de la región. Septiembre de 2009, Marzo de 2011.
Reunión Ministerial sobre la iniciativa Caminos a la Prosperidad en las Américas (más conocida como iniciativa Obama) a realizarse en CEPAL ha preparado documento “Experiencias exitosas en innovación, inserción internacional e inclusión social: una mirada desde las pymes” en colaboración con OEA y BID.

15. Intra-regional trade shows a dynamic performance but not enough…
LATIN AMERICA AND THE CARIBBEAN: INDEX OF INTRA-REGIONAL EXPORTS
(In percentage of total exports)
MERCOSUR
MCCA
EVOLUCIÓN DEL COMERCIO INTRAMERCOSUR
En 2010, el comercio intra-MERCOSUR se recuperó de la fuerte desaceleración sufrida en 2009 producto de la crisis de fines de La tasa de crecimiento post-crisis fue de 34%, esto es 6 puntos porcentuales más que el crecimiento de su comercio extrarregional.
El análisis del coeficiente de comercio intrarregional (proporción de las exportaciones intrarregionales en el total) mostró signos de recuperación. En 2010 siguió aumentando, aunque aún no consigue los máximos históricos del bienio ( ).
Durante el primer trimestre de 2011, los flujos de comercio intra-MERCOSUR continuaron aumentando. Esto, pese a las tensiones existentes entre los socios de mayor tamaño dentro del grupo.
EVOLUCIÓN DEL COMERCIO INTRA-MCCA
El comercio l entre los países del Mercado Común Centroamericano (MCCA),—calculado como el total de las exportaciones entre sus miembros en las exportaciones totales—, llegó a niveles cercanos al 25% en En 2009 con la crisis internacional y tensiones geopolíticas (crisis interna en Honduras), el comercio intrarregional descendió dos puntos porcentuales, hasta el 23%.
Tras la crisis, en 2010, las exportaciones intrarregionales volvieron a aumenta en 2010, a un ritmo similar al de las exportaciones extrarregionales.
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.

16. ECLAC as a catalyst in regional cooperation for development
Multi-sectoral forum for regional policy dialogues
Follow-up to global conferences and technical support to countries in reaching regional consensus
Technical secretariat and catalyst for the formulation and monitoring of regional plans of action
Identification and analysis of emerging development issues and placing them as priorities on the regional policy agenda
Promotion of South-South cooperation and harmonization of good practices through capacity building
Development of regional observatories for comparative analysis and exchange of experience
Promotion of inter-agency cooperation at the regional level
Multi-sectoral forum for regional policy dialogues
Follow-up to global conferences and technical support to countries for formulating regional positions (UNFCCC, Rio+20, Financing for Development)
Technical secretariat and catalyst for the formulation and monitoring of regional plans of action (eLAC 2015 on information society, 2021 Ibero-American educational goals, etc.)
Identification and analysis of emerging development issues and placing them as priorities on the regional policy agenda
Promotion of South-South cooperation and harmonization of good practices through capacity building (in social programmes, economics of climate change, population census, disaster evaluation and recovery plans)
Development of regional observatories for comparative analysis and exchange of experience (on gender, fiscal policies, policies and measures to tackle the recent economic and financial crises etc.)
Promotion of inter-agency cooperation at the regional level (e.g. monitoring of progress towards the MDGs within the RCM)

17. Support for high-level fora
Tools for regional cooperation
From the Rio Group to the Community of Latin American and Caribbean States (CELAC)
Iberoamerican Summit
(Asuncion 2011) and LAC-EU Summit (Santiago 2012)
Summit of the Americas
(Colombia 2012)
APEC , Pacific Alliance and Latin American Pacific Basin initiatives, Foro de Cooperación América Latina- Asia del Este (FOCALAE)
Subregional processes: UNASUR, SICA, CARICOM, AECS
Preparatory meetings for global summits (Rio+20, climate change, financing for development)
Statistical Conference of the Americas
Regional Conference on Women in Latin America and the Caribbean
Caribbean Development and Cooperation Committee
Committee on Population and Development
Regional Council for Planning
Regional implementation meetings of the Commission on Sustainable Development
Plan of Action for the Information Society in Latin America and the Caribbean (eLAC)
La CEPAL ha apoyado varias instancias de coordinación regional, incluida la Cumbre de América Latina y el Caribe sobre integración y desarrollo convocada por el Gobierno del Brasil (16-17 Dic 2008). Para esa ocasión, elaboró el documento Crisis internacional y oportunidades para la cooperación regional. También contribuyó a la discusión sobre políticas al más alto nivel mediante la preparación de los principales documentos sustantivos para las deliberaciones de las Cumbres Iberoamericanas de Jefes de Estado y de Gobierno de 2008 y 2009 donde se presentaron las siguientes publicaciones:
XVIII Cumbre San Salvador, octubre, 2008; Espacios iberoamericanos: la economía del conocimiento; Juventud y cohesión social en Iberoamérica: un modelo para armar; El Arco del Pacífico Latinoamericano y su proyección a Asia-Pacífico.
 XIX Cumbre (Estoril), 30 nov y 1 dic 2009):Innovar para crecer: desafíos y oportunidades para el desarrollo sostenible e inclusivo en Iberoamérica.
La CEPAL participó activamente en la VCumbre de las Américas (Puerto España, 2009), a la que presentó los documentos:“Cumbre de las Américas Indicadores Seleccionados; “La reacción de los gobiernos de América Latina y el Caribe frente a la crisis internacional: una presentación sintética de las medidas”
Como continuación de esa Cumbre, la CEPAL fue sede de la 1ª reunión de expertos de ministerios de hacienda de seguimiento de la Cumbre sobre integración y desarrollo y un mes más tarde presentó el documento Las repercusiones de la crisis en los países de América Latina y el Caribe a la segunda Reunión de Ministros de Hacienda de América Latina y el Caribe, celebrada en Viña del Mar, el 3 jul 2009.
El apoyo técnico de CEPAL al Grupo de Río (22 países) contribuyó a la elaboración de una postura común sobre temas relacionados al financiamiento del desarrollo. El fuerte compromiso de los países para enfrentar los desafíos del financiamiento para el desarrollo se tradujo en solicitudes de apoyo técnico del Grupo de Río a la CEPAL parar hacerse cargo de la preparación regional de la Conferencia internacional de seguimiento sobre la financiación para el desarrollo encargada de examinar la aplicación del Consenso de Monterrey (Doha, nov 2008).
Con respecto a las relaciones con la región de Asia y el Pacífico, la CEPAL presentó varios documentos a la decimosexta reunión de los líderes del Foro de Cooperación Económica Asia-Pacífico (APEC) (Lima, 23 nov 2008) y al cuarto y quinto Foro ministerial del Arco del Pacífico Latinoamericano (ver detalle en siguiente en el slide de logros de la dimensión económica).
La CEPAL continuó cumpliendo un papel importante en el debate sobre las políticas públicas en América Latina y el Caribe, y planteó temas emergentes que luego se incorporaron a la agenda política de la región, sirviendo como Secretaría Técnica de diversos foros regionales. Al final de esta presentación las delegaciones de cada uno de estos foros realizarán una breve presentación de los principales resultados del bienio en cada uno de estos foros. A través de esta función de Secretaría Técnica permite a la CEPAL apoyar el a los países en dar seguimiento e implementar los planes de acción a nivel regional derivados de los órganos subsidiarios (por ejemplo del Consenso de Quito) y de otras instancias (eLAC 2010).

18. Final messages
Regional cooperation is essential for an effective strengthening of the Development Pillar of the UN
While there is great potential in MICs to enhance regional cooperation, it is essential to achieved progress in MDG 8: Global partnership for development
Regional Commissions play key roles and complement the regional offices of global UN entities:
Catalizing regional and sub-regional cooperation
Enhancing coherence between the regional institutional landscape and global processess 18