According to ECLAC, to meet climate commitments and at the same time boost economic growth, it would be necessary to invest between 3.7 and 4.9% of the region’s GDP, that is, between 2.1 and 2.8 trillion (millions of dollars) cumulatively until the year 2030.
The region, with a low capacity for its economy to grow, faces the dilemma of focusing on increasing productivity in all its sectors or losing another decade under the sign of backwardness, warned in a new report the Economic Commission for Latin America and the Caribbean (ECLAC).
“Either we begin a new era of high, sustained, inclusive and sustainable growth, or we are heading towards a third lost decade,” said the executive secretary of ECLAC, José Manuel Salazar-Xirinachs, when presenting the report in the capital of Mexico.
To avoid the latter, “countries must scale and improve their productive development policies based on a new vision. Among other things, work on strategic agendas in driving sectors, collaborative efforts, and the promotion of clusters and other productive coordination initiatives,” said Salazar-Xirinachs.
The annual reportOverview of Productive Development Policies in Latin America and the Caribbean 2025” was subtitled “How to get out of the low growth capacity trap?” and highlights the slow productive transformation in most economies and with their productivity stagnant and even in decline.
Already in 2017, the average labor productivity in the world exceeded that of Latin America and the Caribbean. And although it increased in the region, for example 2.2% between 2023 and 2024, the increase is considered insufficient to get out of the lag situation.
The study shows great diversity in terms of the level and growth of productivity between countries, territories, company sizes and sectors in the region, with the lowest productivity sectors being precisely those that concentrate the majority of employment in Latin America and the Caribbean.
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The agriculture, livestock and forestry sector is the one with the lowest productivity, representing only 44% of the average productivity of the region.
They are followed, within the sectors with the lowest productivity, by commerce, with 69%, and construction, with 77% of the average productivity of the region.
Microenterprises reach only 12.5% of the productivity of large companies in the region, a much larger gap than that observed in more developed economies.
When comparing labor productivity in 28 countries in the region with that of 27 in the European Union, the study attributed a score of 100 to productivity by economic sectors in Europe, and found that mining in the Latin American region surpasses it, with 118.8 points.
But, on the other hand, it only achieves 42.7 points in basic services, 34.6 in social services, 34.5 in business services, 33.6 in transport and information, 33.1 in manufacturing, 27.9 in construction, 27.6 in agriculture and 26.6 in commerce, for an average of 29.7 points compared to the 100 of the European Union.
The report analyzes productive development policies in Brazil, Chile, Colombia, Mexico and Peru, and observes progress but also “great opportunities for improvement” in terms of leadership, prioritizing sectors, allocating resources, territorialization of policies, collective construction and cluster initiatives.
The ability to scale and improve these productive policies depends, among other things, on the way in which countries and their territories align their efforts in science, technology and innovation (STI) with the productive transformation of their economies.
The region shows an evident lag in terms of investment in STI, says ECLAC, with investment levels in research and development of around 0.56% of the Gross Domestic Product (GDP).
It is well below three percent of GDP in the countries of the Organization for Economic Cooperation and Development (mostly industrialized economies), or the United States (3.6%) or China (2.6%).
However, the impact of STI policies not only depends on the increase in resources, but also on the design, operation and coherence of the strategies, institutions and instruments involved, the study warns.
According to ECLAC, to meet climate commitments and at the same time boost economic growth, it would be necessary to invest between 3.7 and 4.9% of the region’s GDP, that is, between 2.1 and 2.8 trillion (millions of millions) of dollars cumulatively until the year 2030.
To read the full text, you can go to Inter Press Service
*Journalism in Venezuela is carried out in a hostile environment for the press with dozens of legal instruments in place to punish the word, especially the laws “against hate”, “against fascism” and “against the blockade.” This content was written taking into consideration the threats and limits that, consequently, have been imposed on the dissemination of information from within the country.
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