SANTIAGO, Chile – The Economic Commission for Latin America and the Caribbean (ECLAC) is calling on countries in the region to scale up and improve productive development policies (PDPs) that would foster the productive transformation and growth in productivity of their economies.
The United Nations regional organization has released the first edition of its new flagship publication, “Panorama of Productive Development Policies in Latin America and the Caribbean, 2024,” noting that the countries need to adopt new initiatives to be able to surmount the trap of low capacity for growth in which the region is mired and avert a third lost decade.
The publication was unveiled by ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs and Marco Llinás, the Director of its Production, Productivity and Management Division.
It presents ECLAC’s renewed vision regarding productive development policies, provides an analysis of the efforts that the region’s countries have been making on these policies, and puts forth concrete proposals for scaling up and improving them in Latin America and the Caribbean.
The publication offers more than 80 practical recommendations, encapsulated in seven pillars of action, that seek to orient the region’s countries and their territories on the ”whats” and the “hows” for advancing their productive transformation.
Among its main findings, the document indicates that the efforts the region has been making on productive development policies are marginal in light of the productivity challenge it faces and in light of what other countries are doing in this area.
The countries analyzed allocate public resources equivalent to between 0.2 and 1.2 per cent f gross domestic product (GDP) in PDPs.
ECLAC said these figures are very low compared with the 3.5 per cent that some countries belonging to the Organisation for Economic Co-operation and Development (OECD) are estimated to invest.
Furthermore, tax instruments tend to predominate, accounting for as high as 61.5 per cent of the total. In addition, resources are dispersed among multiple instruments of limited scope, which atomizes the efforts made and thereby reduces their capacity for impact.
The modern vision of PDPs that ECLAC is promoting emphasizes governance mechanisms and collaboration between key institutions and stakeholders.
In this regard, researchers found significant fragmentation among the institutions dedicated to PDPs: the majority of the 33 countries in Latin America and the Caribbean has between five and six entities dedicated to these policies.
However, coordination is scant among these institutions. In addition, the data shows that subnational governments contribute with their own resources to financing PDPs in their territories. However, there is great heterogeneity in the efforts made by distinct territories within countries.
According to the assessment made by ECLAC, there are significant opportunities for improving PDP efforts in the region. Thus, to provide guidance to national and subnational governments for scaling up and improving their PDPs, the publication presents a broad set of proposals grouped into seven pillars of action.
These are increase efforts in line with the new vision for bigger impac, strengthen multi-stakeholder and multilevel governance, strengthen institutions’ technical, operational, political and prospective (TOPP) capabilities and create and strengthen cluster initiatives in line with production priorities.
It also advocates a boost the commitment of all stakeholders, particularly from the private sector, bolster territorialization and adopt a strategic line of internationalization.
