Rising food and energy prices and a migration crisis pose significant economic and social challenges in Latin America, according to several leaders from the region speaking at a presidential panel at the Forum’s annual meeting world economy 2022. However, they remain convinced that investing in their economies will remain attractive.
“We cannot remain indifferent to this humanitarian tragedy,” said Colombian President Ivan Duque, referring to the challenges of Venezuelan migration to his country, which has seen nearly 2 million people cross the border in recent years after having escaped economic difficulties. Duque announced that Colombia would issue more than one million temporary status cards to Venezuelan migrants.
Rising food and energy prices also pose a threat to Latin American populations. President Luis Rodolfo Abinader Corona of the Dominican Republic has indicated that his government will soon authorize corn subsidies to offset rising food prices and the rising cost of poultry. The country has already introduced fertilizer subsidies and wheat price support would likely follow.
While the region has experienced economic growth in recent years, the combined effects of the COVID-19 pandemic and supply chain and price shocks related to Russia’s invasion of Ukraine have raised concerns. questions about the future growth of several countries. Despite the challenges, many Latin American countries continue to tout their economies and encourage foreign companies to invest and “near-shore”.
“No paperwork, but red carpetsaid President Rodrigo Chaves Robles of Costa Rica, on his country’s willingness to welcome foreign investors. “Costa Rica is open for business. I will break all bottlenecks…. I will open all doors.
Likewise, Dina Ercilia Boluarte, Vice President and Minister of Development and Social Inclusion of Peru, highlighted the country’s availability for external investors. “We will welcome you with a stable economy and legal guarantees.”
Many Latin American countries are now focusing on climate and environmental sustainability. In countries with high tourism intensity, such as the Dominican Republic, the sector constitutes an essential part of the GDP and employs 20% of the population. Diversification beyond “sun and beach” tourism could ensure that the sector remains resilient even in the face of intensifying climate change.
In addition, the region can accelerate investments in climate change mitigation and renewable energy. Chaves said, “We are upgrading our electricity grid with more renewables, even though we have overinvested in fossil fuel power generation.” Transitioning energy sources in an era of rising prices poses serious challenges, he added, so the nation will need to pursue reforms in a way that balances current growth with sustainability goals.
Education reform is another way Latin American leaders are preparing for digital and green energy transformations. Colombia recently completed the training of 100,000 programmers and Costa Rica is working to improve the efficiency of its education spending. Currently, the country spends twice as much as Viet Nam to educate students. While Viet Nam ranks eighth in student math scores, Costa Rica ranks near the bottom in student math performance.
Peru promotes social inclusion by transforming the way the state delivers social services to rural communities. One program puts public services — such as vaccines, medical supplies and training materials to reduce violence against women — on boats so officials can reach hard-to-reach communities in the dense Peruvian forests and remote villages. “We bring state services to our brothers and sisters to improve their quality of life,” Boluarte said.