Regional Challenges

1
THE WORLD BANK
Regional Challenges
Latin America and the Caribbean
2007
2
Latin America and the Caribbeans Twin
Development Challenges

• Low and volatile growth
• and persistently high inequality
• contribute to high levels of poverty
• in an essentially a middle income country (MIC)
  region.

Gini Coefficient, 2000-5
(average)
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2
ECA
SA
EAP
MENA
LAC
Source WDI, simple average of country figures
2000-5
3
Latin America and the Caribbean is one of the
most unequal regions of the world
Latin America Caribbean
East Asia Pacific
Sub-Saharan Africa
Middle East N. Africa
High Income Countries
Europe Central Asia
Source WDR 2006
4
Recent Progress in Growth Recovery and Job
Creation

• Due to favorable external conditions and good
  macroeconomic policies.

4
5
Taking advantage of good times to reduce
vulnerabilities

• Accumulated international reserves and primary
  surpluses
• Reductions in public debt/GDP ratio
• Reduced vulnerability and increased capacity to
  cope with future exogenous shocks.

5
6
But, modest progress in Investment Climate and
Infrastructure

• Total infrastructure investment in LAC remains
  very low around 3 of GDP compared to 7 of GDP
  in EAP (East Asia and the Pacific region).
• Private investment has not compensated for the
  fall in public investment.

6
7
And in Poverty Reduction and Equity
7
8
With challenges in some MDG targets
Based on data from ECLAC (2005). Maternal
mortality rates were obtained from United Nations
(2005), Statistical databases http//millenniumin
dicators.un.org0
8
9
To address these challenges, the WB strategy in
LAC is centered around the four themes 4Gs

• GROWTH JOBS
• Improving investment climate
• Increasing investment in infrastructure
• Deepening financial systems
• Increasing innovation

• GLOBAL
• Climate change
• Migration and remittances
• Trade negotiations
• Crime and violence
• Energy
• HIV/AIDs
• Avian Flu

• GOVERNANCE
• Building inclusive and effective institutions
• Improving efficiency and targeting of public
  spending
• Increasing accountability for service delivery
• Reducing corruption
• Monitoring and evaluating results

• GINI Poverty
• (Social Inequality)
• Reduce poverty and inequality
• Improving equality of opportunities
• Improve quality and delivery in education and
  health
• Provide comprehensive and affordable social
  protection
• Support direct anti-poverty programs (CCTs)

10
Looking to the future

• Continued need to achieve sustainable growth with
  greater equity
• Large unmet demand for infrastructure. LAC is
  still lagging behind other MIC countries
• Global issues remain relevant and have a growing
  importance and impact on the region (e.g. climate
  change, trade, remittances, energy)

11
Conclusion

• The LAC challenge is to overcome the twin
  disappointments of low growth and persistently
  high inequality
• The WB response is to energize our partnership
  through knowledge leadership, innovative lending
  and customized implementation support
• Our goal is to meet the hopes and dreams of Latin
  American and Caribbean peoples for a more
  equitable, inclusive and secure society