Latin America and the Caribbean Economic Outlook: Financing Sustainable Development

Overview

The Latin America Economic Outlook (LEO) is a joint report produced by the Development Centre of the Organisation for Economic Cooperation and Development (OECD), the United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC), the CAF-Development Bank of Latin America and the Caribbean, and the European Commission. The 2024 edition, titled “Financing Sustainable Development,” highlights the region’s sustainable financing gap, estimated at US$99 billion annually, and provides recommendations for bridging this gap.

Key Findings and Recommendations

The report emphasizes the need for LAC countries to strengthen tax collection and spending, improve public debt management, and mobilize more private resources to finance their ambitious development agendas. It also highlights the region’s challenging socioeconomic context, with weak productivity growth, high poverty rates, and persistent extreme poverty.

To address these challenges, the report recommends:

* Improving tax levies to increase revenue and reduce inequalities
* Optimizing budget allocation and increasing spending efficiency to free up additional resources
* Improving debt management through robust fiscal frameworks to maintain fiscal sustainability
* Deepening financial markets and encouraging innovation to channel more private resources towards development goals
* Encouraging production transformation to achieve sustainable growth and promote competitive sectors

International Cooperation and Financing Instruments

The report notes that international cooperation is key to mobilizing new resources, including the EU-LAC Global Gateway Investment Agenda, which mobilizes funding through public-private partnerships to address infrastructure needs while creating local added value and promoting growth, jobs, and social cohesion. It also highlights the importance of financing instruments like green, social, and sustainability-linked bonds, as well as catastrophe bonds, debt-for-nature swaps, and natural disaster clauses.

Conclusion

The Latin America Economic Outlook (LEO) provides a comprehensive analysis of the region’s economic challenges and opportunities. The report’s recommendations emphasize the need for LAC countries to strengthen tax collection and spending, improve public debt management, and mobilize more private resources to finance their ambitious development agendas. International cooperation and innovative financing instruments are also crucial for bridging the region’s sustainable financing gap.

FAQs

Q: What is the Latin America Economic Outlook (LEO)?
A: The LEO is a joint report produced by the Development Centre of the OECD, the UN-ECLAC, the CAF-Development Bank of Latin America and the Caribbean, and the European Commission.

Q: What is the sustainable financing gap in LAC?
A: The sustainable financing gap in LAC is estimated at US$99 billion annually.

Q: What are the key challenges facing LAC countries?
A: The key challenges facing LAC countries include weak productivity growth, high poverty rates, and persistent extreme poverty.

Q: What are the recommendations for bridging the sustainable financing gap?
A: The recommendations include improving tax levies, optimizing budget allocation, improving debt management, deepening financial markets, and encouraging production transformation.

Q: What role does international cooperation play in mobilizing new resources?
A: International cooperation is key to mobilizing new resources, including the EU-LAC Global Gateway Investment Agenda and other financing instruments.