Catching Up: New Challenges for Latin America

The World Economic Forum on Latin America is the regional version of the Davos Economic Forum, held biannually in various Latin American countries. This year, it took place on March 13-15, for the 13th time, in São Paulo, the largest city of South America. It was the second time that Brazil hosts the forum – in 2011, it was held in Rio de Janeiro. The title of the forum is “Latin America at a Turning Point: Shaping the New Narrative.”

The peculiarity of the current forum is that it was held on the eve of an unusual election marathon in Latin America. This year, presidential elections are expected in a number of the biggest Latin American countries – Brazil, Mexico, Venezuela, Colombia, as well as in Costa Rica and Paraguay. Moreover, in March, a new president, who was elected at the end of last year, comes to power in Chile. These events can significantly change the situation in the region, which has experienced a three-year economic slowdown and is clearly in need of reforms.

In these circumstances, the issues of improving public governance and carrying out reforms which could help meet the challenges of the region’s modern development were at the center of the forum participants’ attention, including over 750 global and regional leaders from government, business and civil society. These challenges include distrust of voters toward leaders and state institutions after a series of corruption scandals, which have shocked most Latin American countries over the past 3 years, the most famous of them leading to the impeachment of Brazilian President Dilma Roussef. Other critical issues facing Latin American governments are technological and innovative development gaps, the lag in labor productivity levels compared to the advanced countries, including in Asia, and inequality in income distribution, where Latin America ranks first among the regions of the world with underdeveloped social and economic infrastructure.

The main issues at the forum were: is Latin America ready for the fourth industrial revolution which is taking place in the world, how new technologies, including blockchain, can help strengthen public control over government activities, giving it greater transparency, how robotization of production can influence the regional economies and how the traditional models of the development of Latin American states should be changed.

In particular, the problem of training qualified personnel for national companies was discussed, as well as attracting foreign firms, which are currently not interested in investing in countries with a low level of skills and salaries. In this regard, the importance of investment in the development of digital infrastructure for employees of Latin American enterprises was emphasized. The importance of this problem also increases due to robotization process, which displaces unskilled labor.

In connection with the problem of the region’s readiness for a new industrial revolution, the participants discussed the need to reduce the scale of the informal economy, where more than half of the Latin American labor force is employed. Shifting workers to the modern formal sector will help improve skills, productivity and reduce inequality. It was also noted that the role of the private sector in resolving these problems and social responsibility of entrepreneurs should be increased.

There were also some new topics: harassment in the workplace and gender equality, but they were not connected with the “new narrative,” mentioned in the title of the forum. The meaning of these words was clarified by Marisol Argueta de Barillas, member of the Executive Committee of the World Economic Forum and Head of its Regional Agenda for Latin America: “The region needs a new narrative that places responsible leadership and people’s well-being at the centre; one that embraces technology and innovation as key drivers to modernize economies and advance economic progress for all.”

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.