what strategies are latin american countries pursuing to achieve inclusive growth?
By Luiz de Mello Many countries across Latin American and the Caribbean area take in recent years accomplished strong growth in living standards while improving social evolution and the distribution of income. This is no pocket-size feat in a continent that remains one of the most unequal in the world, and is all the more than impressive when compared with the recent feel of OECD countries, where income disparities take actually increased over the last thirty years, and growth has been deadening since the global crisis.
To help policymakers learn from and build on contempo Latin American experiences, the Organisation for Economic Cooperation and Development (OECD) and the Economical Commission for Latin America and the Caribbean (ECLAC) invited experts from beyond the region to a Consultation on Inclusive Growth on November 14th and 15th in Santiago, Republic of chile. We discussed the progress that has been made toward ensuring that the benefits of economic growth are better shared among all Latin Americans.
The discussion has to brainstorm with economical growth, which remains the first step if Latin America is to bridge the large gap in living standards relative to the wealthier OECD countries. Income per capita in the region is today just about 1-third of the boilerplate in the OECD area, even in the more prosperous countries like Argentina, Brazil, Chile and United mexican states. The drivers of growth must also be reconsidered -- Latin American growth has long been based on investment and job creation, given the region's favorable demographics, rather than gains in productivity, which drive performance in advanced economies. Future prosperity in the region volition depend largely on the steps countries have to improve their productivity. Our recommendations are well-known, and include chiefly greater investments in human majuscule and amend policies to leverage this investment. Latin America's lopsided distribution of income will add a degree of difficulty to the bid to brand growth strong and inclusive. Subsequently all, Inclusive Growth is not about pro-growth or distribution-friendly policies; it is about making progress on both fronts. And Inclusive Growth is not near income solitary; information technology is about improve outcomes in all aspects of life that affair for people'south well-being.
The Latin American countries that have made the most progress toward achieving Inclusive Growth have washed so through a mix of external button and dwelling house-grown solutions. The global economic environment has helped. Increased world demand for commodities - courtesy of Red china and other fast-growing emerging-market economies - has driven up the terms of trade, boosting consumption and shifting income to those employed in lower-paid, lower-productivity, often breezy jobs. Those at the lower end of the income distribution have benefited greatly.
Many countries have invested heavily in human capital letter. Easier access to services has created opportunities for those who had non been able to study and acquire marketable competencies. Not simply has the supply of skills increased simply besides demand for those skills. The premia that employers paid for additional years of education used to be amidst the highest in the world only are now coming down, narrowing the dispersion in labour income.
The best performing countries take also implemented structural reforms. They have opened upwardly their economies to merchandise and improved the business environs. In doing and so, they have unleashed opportunities for investment and entrepreneurship, which is good for productivity and growth, too benefiting those who had hitherto been excluded from economic life.
Public policies have changed. Increasing accent has been placed on reaching out to underserved populations and linking social protection strategies to participation in education and health care programs. Multidimensionality -- a key characteristic of Inclusive Growth -- has come to the fore in the design of social programs. This is the case of Brazil's Bolsa Família program, which directs cash transfers to the country'due south poorest families, as long every bit their children attend schoolhouse and receive preventive health care. United mexican states'due south Oportunidades and other programs throughout the continent share the same philosophy. Short-term income-support objectives are thus combined with the long-term bid to amend human upper-case letter and health. Information technology'south a solution made in Latin America that the residuum of the globe is taking notice of.
To ensure these successes proceed, countries must put in place necessary reforms to safeguard the progress achieved to appointment and continue addressing the region's longer-term challenges, notably tedious productivity growth, poverty and loftier inequality. We must all proceed working to meliorate understand the policies that deliver both strong growth and greater inclusiveness, and the trade-offs that may need to be addressed in coming together both objectives.
Luiz de Mello is deputy master of staff to the Secretarial assistant-General of the OECD.
Source: https://www.huffpost.com/entry/latin-american-growth-inc_b_4340044
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