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The aim of the Priorities for Action is to consolidate options and propose solutions to the regional challenges.
Latin America’s leaders recognize the need to renew and reinforce their commitment to improve the state of their region and the world. To compete globally, countries should pool their strengths to achieve the scale necessary to build better infrastructure, deepen regional agreements and strengthen regional institutions and governance.
During the World Economic Forum on Latin America, participants were asked to address the following question: How can we achieve equitable distribution of income with economic growth?
Together with the ideas collected prior to the roundtable the following priorities for action were identified.
I. SOCIAL PRIORITIES FOR ACTION 1. Equal Access: Promote active social policies in favour of low income households, reconciled with macroeconomic stability, sound fiscal policies and efficient tax collection. An important role should be to enhance access by low income families to basic healthcare, good quality education from pre-school level and universal social security.
2. Safety Net: Increase demand actions through vouchers and/or conditional cash transfers such as the Oportunidades (Mexico), the Bolsa Familia (Brazil) or the Familias en Acción (Colombia).
3. Housing: Enhance access to housing through schemes that support demand, which complements the purchasing power of low income households. Banks and governments should promote the use of mortgage insurance and find ways to extend the tenure of mortgages.
4. Education: More emphasis and resources should be put on the training of teachers and quality education than in extending mandatory periods of education for children. Educators should be appropriately compensated. Resources should be employed to improve school system management at all levels.
5. Employment: Increase the supply of skilled labour so that the high value-added sectors of the economy can grow and improve income distribution, while ensuring long-term growth. Enhance the efficiency of the labour market, while protecting the rights and well-being of the employee.
II. ECONOMIC PRIORITIES FOR ACTION
1. Institutional Reform and Innovation: Set up a public-private agency to concentrate national efforts on attracting investors and promoting innovation. Offer tax credits for R&D spending in the private sector.
2. Tax Reform: Increase the tax base, simplify the fiscal system and reduce tax evasion by investing in information systems. Institutions need to be strengthened to ensure that these funds are invested efficiently and to minimize the possibilities of corruption and political manipulation.
3. Infrastructure and Investment: Public-private partnerships (PPPs) and similar concessions should be set up to focus on building necessary infrastructure over the long term, particularly in rural areas, regions that are underdeveloped and urban slums. Governments should implement appropriate regulation and increase capital expenditure.
4. Financial Services: Improve access of small enterprises and producers to financial services ("bancarización", credit, insurance). This would require better creditor rights, credit bureaus, prudential regulation and innovation in financial products. Promote risk mitigation instruments to help SMEs access long-term financing in local currencies.
5. Trade: Actively engage in negotiations to promote fair trade of manufactured and non-manufactured products.
Each country should focus, through stable political coalitions and quality of its government, on unblocking the constraints that are impeding it from achieving equitable income distribution and sustained growth. |
