Luis Felipe López Calva, UNDP Regional Director: "Inclusive policies tend to reinforce the loss of productivity"

Luis Felipe López Calva, on the loss of productivity

In the early 2000s, the concept of South-South cooperation, namely the exchange of technologies, resources and knowledge among developing countries, It gained tremendous popularity in Latin America at a time when center-left political forces triumphed in different countries, regional integration policies have progressed, and strong reductions in poverty and inequality have been achieved. performed. in the context of the soaring prices of basic products.

Ten years later, the trend started to turn: economic growth has slowed down in many countries, poverty and inequality have resumed and manyPoisoned by corruption and mismanagement of public finances, the elections have been lost to center-right forces farther away from South-South cooperation.

López Calva, on the ideological differences in Latin America

The Mexican economist Luis Felipe López Calva, Regional Director of UNDP, arrived in the Argentine capital, where the Buenos Aires Action Plan (PABA) was launched, to participate in the global event, and during the visit with which he spoke Infobae on the challenges of South-South cooperation, the problems affecting Latin America and themiddle-income traps"

– The importance of a middle clbad with economic security as a driver of economic growth was emphasized. How do you see the current situation in our region when it seems that the growth of this middle clbad has decreased somewhat?

-We must adopt a medium-term perspective. The region has had a very positive economic cycle since 2002, and very important results have been achieved, such as the reduction of poverty and the rise of the middle clbad. However, since 2013, some institutions have begun to indicate that this growth was not sustainable because a significant percentage of the population was considered vulnerable. And this is what we have seen since 2016, a very bad year for the region, and these vulnerable people have fallen back into poverty.

López Clavo, on the possibilities of cooperation of Argentina, host of the last South-South Summit

– And what can be done in terms of cooperation, what could be the axis to return to the path of growth of the middle clbad?

-There are three problems that characterize the region very clearly. It is a region of poor economic growth, characterized by high inequalities and very vulnerable to shocks related to climate events. Then there is this idea of ​​working on how to improve productivity, solve the problem of growth. How to improve inclusion, solve inequalities. And how to make countries and households more resilient to these shocks, through more active mechanisms of social protection and market development. This requires effective governments.

-Although you mentioned productivity, it is understood that productivity stagnated during the first decade of the new century despite investments in human and physical capital. Why do you think this happens, especially in our region?

-I will give a vision that begins to be a consensus. Productivity is very important to support long-term growth. We have always focused on that in terms of investments in infrastructure and education, and I think all of that has been done. But there is a problem of growing informality, of productive businesses that are not growing, of remaining unproductive enterprises. The companies are very small. Credit restrictions and institutional problems prevent companies from developing. Then there is a question of microeconomic productivity, which we should solve much more clearly.

We must also understand that inclusion policies often tend to reinforce these mechanisms. For example, all governments respond by trying to provide non-contributory protection to informal sector groups. This can end up being a subsidy to informality, so we are entering a small trap. And this is part of what is generally called the "middle income trap".

–With regard to the 2030 Agenda, what is your diagnosis of the state of implementation in Latin America and what, in your opinion, will be the focus for the coming years, given the tensions between economic growth and the protection of the economy? environment, and between human rights promotion and growth of extremist political expressions?

– The 2030 Agenda is basically a political agreement between all the global players. This is a very important document. The world has tried to shift from an ideologically based equilibrium, which dominated the last part of the twentieth century, to an equilibrium based on ideals. And in reality, this agenda is a global agreement.

This agenda loses its effectiveness if there is no national and local ownership. Things happen in concrete societies. Argentina, Mexico and Colombia are trying to integrate these programs into their national plans.

We are faced with restrictions, especially in that we are going through a period of political polarization, which makes it more difficult to reach that consensus. I think this process of political polarization is badociated with the economic downturn, but does not explain it completely. There is also a mistrust of institutions that makes it more difficult to achieve this consensus.

-On the theme of the transition from ideological balances to ideological balances, how can we develop cooperation if we consider that there are as many ideological differences between our governments in our region, for example in this area? which concerns socialism in the twentieth century in Venezuela and Bolivia?

This is one of the reasons why the agreement of the 2030 Agenda is of great value, because precisely what it calls this agreement signed by all the actors, it is that whatever the ideologies, it exists a set of social aspirations to which all states must adhere. they must engage. Because they make viable not only economic but social sustainability of political entities.

This is important because there is a lack of social cohesion. In Latin America, we have long been confronted with so-called fragmented social contracts.

So I think that rethinking and reconnecting different groups around common goals is an essential task. For example, when we talk about social services, how can we improve the experience of citizens in their interactions with the state? If, at the individual level, citizens have a better experience and the confidence capacity is restored, we are going back in the right direction.

– What expectations do you have for the results of this summit of South-South cooperation, at a time when the concept seems to have been called into question, a strong regional crisis around Venezuela and given the mistrust that reigns population with the state?

A starting point as a region, even though it is a world conference, is that we must recognize that in the region the historical perspective is lost in the face of serious polarization issues. Let's go to Latin America, 40 or 50 years ago, at the first meeting. Latin America was in a situation of authoritarian governments, in many cases dictatorships, with very deteriorated social indicators. Today, no matter what problems we have, we are in a region that has embraced democracy, a society that has seen significant social progress. How can we move forward?

The South-South conference consolidates a new paradigm, because we have a conception of cooperation in which the most advanced or the richest countries help the least developed. It is actually a question of recalling the experiences in which the countries of the South have also become resource providers, but also of knowledge and experiences that they can share so that other governments can be more effective. There is a new notion of solidarity and partnership between equals.

We have just come out of a meeting where we have shown examples of cooperation between Argentina and the Caribbean countries in the areas of health, governance, scientific advances and disaster response. We learn a lot from each other.

– In this regard, what can a country like Argentina do in terms of South-South cooperation, which has not been able to control inflation or exit the recession, unlike its neighbors?

We all know the macroeconomic problem that Argentina is facing today, but it is not just about today, it is structural: volatility and periodic regression of macroeconomic cycles. I think we are in one of those. Regardless of this, we must also make it clear, in a long-term perspective, Latin American countries are seeing a lot to learn from Argentina on sectoral issues, in terms of innovation in the public policies, agricultural productivity, health research and the provision of health services. in the education sector, in the fight against corruption. Regardless of this cycle, more than the structural crisis that Argentina is facing, the countries of the region see the country as a source of knowledge very important for their public policies.

-And what can Argentina expect from others?

I think Argentina can benefit a lot, hence the importance of hosting this meeting. This shows not only the commitment of cooperation from the point of view of what Argentina can show, but also the willingness to learn from others, which has been very clear in the current meetings, where there is a notion Common C has become a two-way street, not just in one direction.