Economic recovery as a goal for Latin American and Caribbean growth

December 16, 2021
Economic recovery as a goal for Latin American and Caribbean growth

The COVID-19 pandemic has had a significant impact on the region's growth. The paralysis of economic activities as a result of the virus containment measures has led to the closure of businesses, the destruction of jobs, the impact on global supply chains and the collapse of health systems at the regional level.

In addition, Latin American and Caribbean (LAC) countries had been experiencing negative growth rates, which placed the economies in a much more vulnerable situation in 2020. “More than 2.7 million small and medium-sized enterprises (SMEs) closed, more than 8.5 million jobs were lost, and trade contracted by 9.2%. All this resulted in a 7.0% contraction of Gross Domestic Product (GDP). Our citizens need to recover quickly from so many shocks,” said the Permanent Secretary of SELA, Ambassador Clarems Endara, during the Second EUEA-LAC Forum: Eliminating barriers and bridge-building for business cooperation.

“Taking into account this scenario, LAC needs work strategies to dynamize the strategic productive sectors, as well as tools to facilitate the design of effective public policies for the economic and social development of the region,” he added.

“Although this year has given us hope for recovery, there is much work to be done to get back on track. There are approximately 30 million new poor people in the region and almost 13 million SMEs closed during the pandemic,” Ambassador Endara revealed, highlighting that SELA's membership agreed to address the issue precisely because of the indicators.

In this context, he explained that the Permanent Secretariat, with the agreement of its member States, has set out to promote a work programme from 2022 onwards, consisting of three axes, the first of which is aimed at economic recovery.

One of the central objectives of this axis is to boost economic growth by strengthening regional integration processes, contributing to the design of public policies that facilitate trade and promoting the SME business ecosystem.

Its implementation is based on three programmes considered strategic: Economic Integration, which aims to build a common regional agenda among integration blocs for the development of economic policies.

It is made up of the project Institutional Convergence and Cooperation for Integration, which includes two activities: Measuring the progress of integration processes and the Round table of chairs and secretariats of regional integration mechanisms, which seek to promote progress in this area.

Trade facilitation

Trade in the region has been severely affected by the disruption of global supply chains, which in turn has generated not only a contraction of regional exports of 9.2% in 2020, but also a substantial increase in freight costs, trade cargo insurance and uncertainty regarding the scarcity of goods. In this sense, the Trade Facilitation programme aims to design public policies with a view to reducing costs and barriers to trade, opening new markets and positioning LAC trade in international markets.

This programme will be carried out through the projects Network of Digital and Collaborative Ports and Trade promotion in Latin America and the Caribbean.

Promotion of the SME sector

Small and medium-sized enterprises generate 60% of regional employment and contribute 25% of the Gross Domestic Product (GDP) of Latin America and the Caribbean, making it essential to focus on this sector. In this regard, the objective of this programme is to formulate public policies that can promote productive sectors, strengthen business models and develop new markets for the SME business ecosystem.

It is made up of the projects Productive Articulation for stronger SMEs and Seizing the opportunities of the industries of cultural and creative goods and services for economic recovery.

Key topics: pymes