Global institutions and economists warn that the latest data around the COVID-19 economic recovery shows a potential “lost decade” for Latin America.
The region has seen some of the world’s highest coronavirus death figures, especially in proportion to its population. And its economic recovery is lagging behind, with poverty, inequality, and food insecurity on the rise amid three humanitarian crises — in Venezuela, Central America, and Haiti.
But according to Luis Alberto Moreno, former president at the Inter-American Development Bank, the global development community must focus on one of those issues in particular to get Latin America back on track: inequality.
“Now more than ever, these questions of inequality are going to have a bigger toll on how things advance forward, and they will definitely have an impact on our political discourse,” he told Devex President and Editor-in-Chief Raj Kumar during the first in a series of interviews with newsmakers to discuss Latin American growth.
“This is a long journey … that will have huge consequences if we don’t get it right,” Moreno added.
More from the discussion:
• Economic growth in Latin America was already slowing down in the five years leading up to the pandemic, Moreno said. That was exacerbated by “identity politics” and distracted societies from “constructing and looking forward.”
• “The world today, especially the developed world, is very focused — correctly — on climate change,” Moreno said. “But … we cannot lose sight of the fundamental problem” of inequality, he added. “We have to integrate those two agendas.”
• “[Multilateral development] institutions were created to take not less risk but more risk,” Moreno said. It’s now time for them to review their current practices, “such that you can take more risk, lend more,” and set up more public goods.
• “Good governance is something you have to practice every day,” Moreno said. “There is no good development if you don’t have good institutions.”
• So what should government leaders do? At the end of the day, Latin American governments will only course-correct if they can look at short-, middle-, and long-term problems simultaneously, according to Moreno. “The short-term issues are determining a lot of the long-term issues. And the longer you take in not addressing those long-term issues, the more acute the problems will become,” he said.
The next interview in Devex’s Shaping Growth in Latin America series, presented by Open Society Foundations, is set to take place in November.
About the author
Tania Karas@TaniaKaras
Tania Karas is a Senior Editor at Devex, where she edits coverage on global development and humanitarian aid in the Americas. Previously, she managed the digital team for The World, where she oversaw content production for the website, podcast, newsletter, and social media platforms. Tania also spent three years as a foreign correspondent in Greece, Turkey, and Lebanon, covering the Syrian refugee crisis and European politics. She started her career as a staff reporter for the New York Law Journal, covering immigration and access to justice.
