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At the IDB, we believe that together we can go farther. Our partnership network is making positive differences in Latin America and the Caribbean every day, and this blog is our channel for telling that story. Stay tuned for literature on partnership perspectives, stories from the field, changing trends, outlooks for development and the region, information on ways and opportunities to partner, and more. Thanks for stopping by.
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Is Latin America Europe’s Pupil?

By - Jul 17 2014

Europe Teacher II

Is Latin America Europe’s pupil? Sometimes, but in many cases, both regions have much to learn from each other. Our world’s intensifying globalization offers great opportunity for Latin America and the Caribbean (LAC), a rapidly growing region that is increasingly attractive to investors and partners from around the world. It is in this setting that deeper collaboration between LAC and Europe stands to benefit both zones, as the two regions could implement more strategic cooperation and knowledge sharing that brings together governments, firms and social actors.

Undoubtedly, there is a lot to share. As the Inter-American Development Bank’s (IDB) President Luis Alberto Moreno often reminds us, Latin America suffered and overcame 25 economic crises in 20 years, gaining rich experience that could prove helpful to European countries recovering from the devastating economic and social crisis. Vice versa, the European Union (EU), for example, could offer critical insight to the regional integration efforts that are regaining momentum in Latin America alongside the Pacific Alliance.

It is with this in mind, this vision of open dialogue and comradery between regions, that President Moreno inaugurated the VI International Economic Forum on Latin America last week. Organized since 2009, the forum was organized in partnership with the Organization for Economic Cooperation and Development (OECD) and the French Ministry for the Economy, Industrial Renewal and the Digital Sector.

At the inauguration, President Moreno,  Secretary General Angel Gurría and Minister Michel Sapin acknowledged the rich and vibrant cultural, historical and economic ties that bind Europe and Latin America, setting the stage for strong and effective partnership. Even despite the global economic crisis that adversely impacted trade flows, official development assistance and remittances from Europe to LAC, the EU remains the region’s largest investor and second largest trading partner.

But aside from merely acknowledging the strength of this relationship, the three leaders also emphasized the need to avoid self-complacency. After a decade of strong growth, economic prospects for LAC have dimmed as with the end of the commodity price boom and changes in US monetary policy. If LAC means to sustain its growth, it is imperative that member countries implement reforms. President Moreno made clear this need for reform at the Business Opportunities Seminar in Lisbon.  Organized by Portugal Global Trade & Investment Agency (AICEP) and the Portuguese Ministry of Finance on July, 3rd, President Moreno’s words were a call to action to both regions.

Improving productivity, the President emphasized, is the most important challenge LAC faces, and the only way to guarantee that the economic progress achieved is not temporary. It is crucial to remember that the productivity gap separating LAC from more advanced regions has increased in the past few decades, and can be explained in part by looking to insufficient infrastructure investment. Building and updating infrastructure for the twenty-first century will prove a significant obstacle, but one that the region can and must overcome. In doing so, Europe may prove the most valuable ally.

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