The work stoppage in Buenos Aires, which virtually shut down the city even as the World Economic Forum hosts its Latin American summit, is dominating headlines, but another much smaller protest here last week is worth noting.
It was a protest against protests. Seriously. The demonstrators, supporters of President Mauricio Macri, were expressing their displeasure with the almost daily marches crippling this city. They were saying, in essence, that we can disagree but there's work to do and lives to lead, so enough with blocking our streets and tying up our public transport.
That's the feeling here at the WEF meeting: enough with stirring up popular emotions, there's work to do. This gathering — heavy on business leaders and vanishingly light on supporters of populist and protectionist leaders such as U.S. President Donald Trump and former Argentine President Cristina Fernández de Kirchner — is instead focused on what’s needed to get this region back on track. And when it comes to development in this region, as I pointed out in my column yesterday, it's decidedly not headed in the right direction: Poverty increased in the past two years after decades of progress and some 30 million people in the middle class are in danger of slipping back down the economic ladder.
But if it's time for a new approach to development here, what would this new phase look like? Participants here are buzzing about a few big ideas that could point to a new era in development for Latin America.
Investing in social entrepreneurship
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Government budgets are stretched in Latin America even as large and vulnerable middle classes are demanding more government services. So while cash transfer programs may have been important in the last phase of development here, what's ascendant now is the idea of governments investing in social entrepreneurship to scale social programs more cost effectively.
This was a point emphasized on stage today by Simon Gaviria, Colombia's minister for national planning. As Colombia massively scales up its investments in education nationally and in rural areas previously cut off due to a protracted conflict, he sees particular opportunities around pay-for-performance approaches, bringing in social entrepreneurs to deliver results rather than simply scaling government programs.
The cautionary tale: Venezuela
Although it's far from Buenos Aires, the humanitarian crisis in Venezuela is an undercurrent through every conversation here. A failing state that once was a wealthy and important power in the region, Venezuela is a cautionary tale. Argentine President Mauricio Macri even alluded to the disastrous situation there as the direction Argentina could have been headed until his election 15 months ago.
Government ministers here know they are on the clock: they can push for long-term investments in their societies, but struggling middle classes will only give them so much time to show progress before they throw them out office and vote in populists like those who ultimately set Venezuela on its path. Ricardo Hausman, the renowned development scholar at Harvard and a Venezuelan, called for Latin Americans to consider President John F. Kennedy's admonition to "ask not what your country can do for you, ask what you can do for your country." In his view the region needs a bigger vision, one that focuses on building countries for future generations, not just on meeting immediate demands of voters.
Wholesale to retail
"From wholesale to retail" has been my refrain for years, but this summit gives me further reason to believe a new development paradigm is upon us, one in which even large scale initiatives can be focused on individuals. In part, that's because of all the cell phone penetration in this region, which allows development initiatives to reach out directly to the people they aim to support. And it's also because poverty here has so many dimensions: a family might be above the $2.50 per day poverty line that the World Bank uses for this region (130 million do fall below that level), but might still lack potable water or access to electricity.
I'm hearing more about initiatives, including at a large scale, that are designed to reach individuals, much like the successful cash transfer programs of the past decade. Martin Burt, the founder and head of Fundacion Paraguay, explained that even in a large country such as Brazil, it's now entirely possible for 50 million people living in poverty there to download an app, answer some simple visual questions, and make their own plan for improving their situation. He argued that if there are national development plans and municipal development plans, why shouldn't there be development plans at the level of each individual family?
Soon development organizations, NGOs and governments will be able to identify specific individuals in need and understand their circumstances — and then reach them with education curriculum, health information, or mobile money. This could be a powerful driver of a new phase of progress in this region. It's the kind of disruptive idea WEF summits like this are built on, and, halfway through this one in Buenos Aires, it's an important part of the development buzz we're hearing.
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