1. Latin America and the Caribbean
THE WORLD BANK
Regional Challenges
Latin America and the Caribbean
2007

2. Latin America and the Caribbean’s Twin Development Challenges
Income per capita
With respect to OECD
Low and volatile growth
and persistently high inequality
contribute to high levels of poverty
in an essentially a middle income country (MIC) region.
Gini Coefficient,
60.0
(average)
50.0
40.0
30.0
20.0
10.0
0.0 2
ECA SA
EAP
MENA
LAC
Source: WDI, simple average of country figures

3. Latin America and the Caribbean is one of the most unequal regions of the world
Latin America & Caribbean
East Asia & Pacific
Sub-Saharan Africa
Middle East & N. Africa
High Income Countries
Europe & Central Asia
Source: WDR 2006

4. Recent Progress in Growth Recovery and Job Creation
Due to favorable external conditions and good macroeconomic policies. 4

5. Taking advantage of good times to reduce vulnerabilities
Accumulated international reserves and primary surpluses
Reductions in public debt/GDP ratio
Reduced vulnerability and increased capacity to cope with future exogenous shocks. 5

6. But, modest progress in Investment Climate and Infrastructure
Total infrastructure investment in LAC remains very low around 3% of GDP compared to 7% of GDP in EAP (East Asia and the Pacific region).
Private investment has not compensated for the fall in public investment. 6

7. And in Poverty Reduction and Equity7

8. With challenges in some MDG targets
Based on data from ECLAC (2005). Maternal mortality rates were obtained from United Nations (2005), Statistical databases: 8

9. To address these challenges, the WB strategy in LAC is centered around the four themes – “4Gs”
GROWTH & JOBS
Improving investment climate
Increasing investment in infrastructure
Deepening financial systems
Increasing innovation
GINI & Poverty
(Social Inequality)
Reduce poverty and inequality
Improving equality of opportunities
Improve quality and delivery in education and health
Provide comprehensive and affordable social protection
Support direct anti-poverty programs (CCT’s)
GOVERNANCE
Building inclusive and effective institutions
Improving efficiency and targeting of public spending
Increasing accountability for service delivery
Reducing corruption
Monitoring and evaluating results
GLOBAL
Climate change
Migration and remittances
Trade negotiations
Crime and violence
Energy
HIV/AIDs
Avian Flu

10. Looking to the future
Continued need to achieve sustainable growth with greater equity
Large unmet demand for infrastructure. LAC is still lagging behind other MIC countries
Global issues remain relevant and have a growing importance and impact on the region (e.g. climate change, trade, remittances, energy)

11. Conclusion
The LAC challenge is to overcome the twin disappointments of low growth and persistently high inequality
The WB response is to energize our partnership through knowledge leadership, innovative lending and customized implementation support
Our goal is to meet the hopes and dreams of Latin American and Caribbean peoples for a more equitable, inclusive and secure society