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PORTUGAL: A RELEVANT ARCHITECT TO ADDRESS THE CHALLENGES OF LATIN AMERICA

In 1992, on the occasion of the celebration of the 500th anniversary of the arrival of Christopher Columbus in America, Carlos Fuentes wrote an essay entitled Buried Mirror, in which he referred to the construction of America as a work “growing but unfinished, energetic but full of problems apparently insoluble.” 31 years later, this work is still far from complete.

In its most recent report, Economic Study of Latin America and the Caribbean, the Economic Commission for Latin America and the Caribbean (ECLAC) concluded that, next year, the region will face low economic growth, high levels of inflation and debt public. The regional Gross Domestic Product (GDP) is expected to grow 1.5%, slightly below the 1.7% estimated for 2023.

The complex regional scenario is aggravated by a global context of financial uncertainty and a sharp slowdown in global trade and growth. As if this were not enough, ECLAC predicts that, if investments are not made in adapting and mitigating climate change, “low growth in Latin America and the Caribbean could worsen”. This convulsive scenario, which affects all countries across the board, can only be resolved through a multilateral and joint response.

Multilateral development banks (MDBs) have helped to face the complex reality in Latin America, especially during the recovery after the covid-19 pandemic. While total funding from multilateral institutions in 2021 exceeded the 2025 climate finance targets set at the UN Secretary-General’s Climate Action Summit, larger challenges like those facing the region (and the world) require additional commitment from these institutions and its member countries. The ECLAC report highlights this point by highlighting the need to increase financing to sustain investment trajectories over time and the importance of internal macroeconomic policies that favor the mobilization of resources between countries.

Portugal has the opportunity to play a role in this important mission, namely through its participation in the two main multilateral development banks in Latin America: the Inter-American Development Bank and CAF – Development Bank of Latin America and the Caribbean. Both banks are promoting new partnerships between the European Union and Latin America and the Caribbean, with the aim of boosting investment and trade. This not only helps the region, but also brings Latin American and Caribbean solutions into the orbit of international decision-making forums. An example of this is the recent meeting held in Madrid entitled EU-Latin America and Caribbean Relations, where IPDAL was present, in which both regions sought to establish a joint development agenda based on the dissemination of shared experiences.

Portugal has a unique opportunity to deepen its impact on its sister continent. To this end, it is imperative to increase shareholder capital and for the Ministry of Foreign Affairs to continue strengthening relations with Latin American countries. Only in this way will it be possible to reinforce the financial mechanisms that facilitate investment and create strong economies that drive dynamic and sustainable growth. Only in this way will it be possible to counter the negative effects of the predictions in the latest ECLAC report. Only in this way will Latin America be able to solve the “apparently insoluble problems” that Carlos Fuentes referred to in his essay Espelho Buried more than three decades ago.

Opinion article by Gastón Ocampo originally published on News Diary , September 16, 2023