(22 September 2014) Preliminary estimates suggest that the economic costs of climate change will be around 2.5 % of Latin America and the Caribbean’s annual Gross Domestic Product (GDP), in the case that the temperature rises 2.5 °C above the historical average, the Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, said today in the following statement released in the context of the Climate Summit, which will take place on 23 September at the United Nations headquarters in New York:
“For the last decade, ECLAC has studied the economic and social costs of climate change in Latin American and Caribbean countries, providing the statistical information needed to make decisions and offering numerous public policy recommendations.
Estimates from different studies suggest that the economic costs of climate change could total between 1.5 % and 5 % of the region’s annual GDP. These calculations are still preliminary and include a high level of uncertainty because they do not address all the potential effects or possible results of adaptation actions.
These averages do not reflect the region’s heterogeneity either, but they do offer enough evidence to justify incorporating the medium-term effects of climate change into public decisions, for example, regarding infrastructure investments. Investment is the bridge between the short and medium term and these studies allow policy makers to act early.
Latin America and the Caribbean has contributed less to climate change than other regions, but nonetheless it is particularly vulnerable to its effects. The region’s greenhouse gas emissions (GHG) represent 9 % of the global total, with an annual growth rate of 0.6 % between 1990 and 2011 (compared with 1.5% worldwide). What characterized this region is that a significant proportion of emissions have come from changes in the use of soil, deforestation and agriculture.
The most pressing challenge for the region at this time is adaptation to climate change, especially in the Small Island Developing States of the Caribbean and Central American countries. The annual adaptation costs for Latin America and the Caribbean have been estimated at around 0.5 % of the region’s annual GDP. Although these calculations are preliminary, they clearly reflect the trend in this phenomenon.
The region must urgently design and implement adaptation strategies that include a long-term vision and take into account collateral impacts. The protection of water basins, including forest and soil preservation on high ground and periodic dredging in low areas, is one telling case. A notable example of the pressing need for adaptation is the flooding caused by hurricanes at important basins in southern Mexico and northern Colombia.
The vulnerability of Latin American and Caribbean countries is exacerbated by its geography, the way its population and infrastructure are distributed, its dependence on natural resources, the importance of agricultural activity, and the length of its coastal areas-both along the Pacific and the Atlantic.
Evidence suggests that climate change impact in Latin America and the Caribbean is already relevant and will probably be greater in the future. Variations in temperature levels and precipitation patterns can already be seen. The biggest risks are concentrated in agriculture, water availability, forest conservation, loss of biodiversity, the population’s health, tourism in coastal areas, and rural poverty reduction.
The economic dynamism experienced by the region in the last decade has contributed to reducing poverty and improving the population’s living conditions, but it has also generated negative effects such us atmospheric pollution, greater fossil fuel consumption and the resulting contribution to climate change.
It is a fact that this region has the highest degree of urbanization on the planet. At the same time, there is an increase in private motorization. The lack of modern, safe and high-quality public transportation leads to the preeminence of private vehicles, concentrated among the people who have the highest income levels and who also benefit the most from subsidies to fossil fuels and infrastructure.
The region still has time to choose the paths towards development with equality and environmental sustainability, especially in cities. This is the time for the region to make crucial decisions in order to increase the supply and quality of public services, use renewable energies and shift to a lower-carbon production matrix.
On a global level, the current commitments on mitigating greenhouse gases are still insufficient for stabilizing climate conditions. To do that, the approximately seven tons of CO2 per capita that are emitted today would need to be reduced to two tons per capita by 2050. Only a global agreement with the participation of all countries, along with a paradigmatic technological change in production and consumption patterns, could provide a solution to this phenomenon.
That is why ECLAC is here to accompany the efforts of the United Nations Secretary-General, Ban Ki-moon, in convening this Summit ahead of the Conference of the Parties that will take place in our region-specifically in Lima, Peru-in December of this year.
Latin American and Caribbean countries can be fundamental actors in this global but asymmetrical challenge, given that very often those who have contributed the most to GHG emissions historically do not suffer the most intense impacts of climate change, and they normally have more resources to adapt to the new climate conditions.
The challenge of climate change is, ultimately, to transition towards a new model of sustainable development with equality, in the framework of shared but differentiated responsibilities.”
In New York please contact María Amparo Lasso, Chief of the ECLAC Public Information Unit. E-mail: mariaamparo.lassocepal.org; Mobile: (56 9) 7967 8306.
In Santiago de Chile please contact ECLAC’s Public Information Unit. E-mail: prensacepal.org; Telephone: (56 2) 2210 2040.
(May 22, 2014) The economic scenario in 2014, with an estimated growth rate of 2.7%, is far from auspicious for the evolution of the regional labor market and presents major challenges for labor market policy, said the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO) in a new joint report released today.
“Given the modest economic growth projected for the region in 2014 and current labor participation trends, a slow pace of employment creation is forecast, which means there will likely be no significant variations in the unemployment rate,” said the United Nations organizations in the latest edition of the report The employment situation in Latin America and the Caribbean.
ECLAC and ILO added that if the reduced economic dynamism translates into higher unemployment in some countries, it will be important for them to have unemployment insurance and other protective measures so they can confront this scenario.
The new edition of The employment situation in Latin America and the Caribbean takes stock of the labor markets during 2013 and emphasizes that despite the reduced economic dynamism and a minor drop in the employment rate, the unemployment rate kept falling between 2012 and 2013 and hit its lowest level in decades (6.2%).
Nevertheless, “there are doubts about the sustainability of this positive development in the near future,” the document insists.
According to the report, the weakness of economic growth was already evidenced in 2013 by cooling labor demand. In addition, salaried work grew at lower rates than in previous years, resulting in a slight decline in the employment rate. A positive development was that during 2013 the gap between men and women decreased in terms of participation, employment and unemployment, although significant differences persist and require additional efforts to achieve gender equality in the working world.
Young people were the most affected by the loss of labor dynamism since their unemployment rose between 2012 and 2013 to 14.3% from 14.0% -in contrast to adults,whose unemployment rate was 3.2 times lower- as a consequence of a notable fall in their employment rate (which was steeper than the decline in their labor participation).
In 2014 the region’s countries must make efforts to advance in the creation of quality jobs and, more specifically, to promote the productive labor incorporation of youth.
The joint ECLAC-ILO document also indicates that in addition to job creation in the last decade, the strengthening of social safety nets and the introduction of new social programs were important factors in reducing poverty. Among these, the conditional cash transfer programs stood out, benefiting 21% of the regional population.
These programs, by giving more liquidity to families, allow them to make better labor decisions with respect to their employability in dignified and equitable conditions and can contribute to creating a “virtuous cycle” of generating autonomous income on the part of the poorest and most vulnerable groups.
Nevertheless, the organizations warn that the transfer programs must be closely coordinated with comprehensive social protection systems and active labor market policies to ensure that “graduating” from these programs does not lead to a loss of rights for the families or to labor informality.
Any queries should be sent to ECLAC‘s Public Information Unit.
E-mail: prensacepal.org; Telephone: (56 2) 2210 2040.
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ECLAC will be holding a side event for the 13th session of the UN Permanent Forum on Indigenous Issues; “Indigenous peoples in Latin America: Progress made in the last ten years and
outstanding challenges for fulfilling their rights”.
Please find attached below, links to the information flyer in Spanish and English.
May 15 2014 | Posted in ECLAC News
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(Op-Ed by Ms. Alicia Barcena, Executive Secretary of Economic Commission for Latin America and the Caribbean and current Coordinator of the Regional Commissions)
As we come to the end of the year, we, the women of Latin America and the Caribbean can be satisfied and hopeful, thanks to the commitments made by our countries in the area of gender equality.
In two important meetings organized by the Economic Commission for Latin America and the Caribbean, governments signed the Montevideo Consensus and the Santo Domingo Consensus; both contain specific agreements aimed at endowing women with more physical, economic and political autonomy.
For decades the women of our region have used social movements and institutional mechanisms to campaign for effective state action to end discrimination in society. The fact that equality is now guiding government agendas is a triumph in which they can legitimately claim to have played an important part.
The Regional Conference on Women in Latin America and the Caribbean, which took place in October in the Dominican Republic, mainly addressed the space that women occupy in the digital economy — a current focus of the work being carried out by ECLAC.
We believe that Latin America and the Caribbean should undertake a process of structural change, seeking to diversify its production patterns, by applying a combination of industrial, economic, social, environmental and labor policies. From our perspective, this will enable the region to grow steadily with environmental responsibility and greater equality. The structural change we are proposing relies heavily on generating knowledge and incorporating innovations into the production system and society as a whole. Information and communications technologies (ICTs) play a crucial role in this process.
We add a gender perspective to this debate, because the opportunities generated by the new digital economy are not always distributed equitably among countries or people. We are seeing first- and second-generation gaps, not only in terms of access to computers and the Internet, but also in relation to the skills and use of such technology.
Data show that while women do benefit from the advances of the digital society, they lag behind men.
The average Internet usage rate in 10 countries is far lower among women than among men.
A public policy sensitive to this reality should recognize that gender equality in the digital economy is mainly seen in the workplace (paid and unpaid).
It is therefore urgent to implement policies that prevent labor segregation, avoid income gaps and promote a fair division of labor by gender.
The slow rate at which labor-market gaps are being closed, highlights the persistent obstacles to access faced, not least of which is the fact that women remain those mainly responsible for unpaid and care work in the home.
Also consider, in our region a woman with 13 or more years of education still earns 37 percent less than a man with the same level of qualifications.
For ECLAC, equality is synonymous with entitlement to rights, and the state has a unique role to play in achieving minimum thresholds of well-being without using up resources or reducing the momentum of economic buoyancy.
The positive advances registered by the consensuses reached at these regional conferences point to a systematic defense of the integral and indivisible nature of rights, enhancement of the state (possibly going against prevailing viewpoints from the recent past) and the quest for a new equation in the relationship between the state, society, market and the family.
The idea is to the change the balance of power so that Latin American and Caribbean women can enjoy their rights effectively.
Foreign direct investment (FDI) to Latin America displayed moderate growth in the first half of this year, compared with the year-earlier period in 2012, according to the Economic Commission for Latin America and the Caribbean (ECLAC). The 13 countries of the region that provided data received 102.951 billion dollars, which was 6% higher than the first six months of the previous year.
The main recipient was Brazil, which received 39.014 billion dollars between January and August 2013, which was 10% lower than the sum received in the year-earlier period. This fall was concentrated in the iron and steel, food and beverage and financial services sectors (which had undergone major business acquisitions in 2012).
Thanks to the purchase of the brewery Modelo by the Belgian firm Anheuser-Busch InBev, the first half of 2013 saw Mexico exceed all FDI received during 2012. Even without that deal (valued at 13.249 billion dollars), FDI in Mexico would have been 15% higher than the year-earlier period.
Foreign direct investment flows were also up in Venezuela (44%), Peru (27%), El Salvador (27%), Panama (19%), Costa Rica (15%), Uruguay (8%) and Colombia (5%).
In the first seven months of the year, inflows to Chile were 26% lower than the same period in 2012, although the decrease is due to extraordinary operations recorded in April. Inflows were also down in Guatemala, Argentina and the Dominican Republic, where a major acquisition had significantly bolstered the figures for 2012 (Anheuser-Busch InBev bought the Dominican National Brewery for 1.237 billion dollars).
The data presented today in the press release are from the update that ECLAC annually carries out to the figures from Foreign Direct Investment in Latin America and the Caribbean, which was last released in May.In this sense, ECLAC is confirming the trend predicted that month for a moderate increase in the region’s FDI during 2013.
In terms of outward foreign direct investment, this dipped during the first half of the year. The 10 countries of the region that presented data accounted for 6.385 billion dollars of investment abroad in the first six months of the year (compared to 24.446 billion for the same period of 2012).
Mexico, which had invested record amounts abroad last year, reduced outflows by 71% in the first half of 2013, while Brazil’s figure was down 36% because of a strengthening of the trend for Brazilian enterprises to get into debt with their foreign subsidiaries. In Chile, foreign investment posted a fall that – as with FDI inflows – was concentrated in April.
According to ECLAC, outward FDI flows (which reached historic highs in the three previous years) remain highly volatile. Nevertheless, the expansion of transnational Latin American enterprises (trans-Latins) continues apace, and amounts for the second half of the year are expected to exceed those from the first six months – mainly because this will include some major cross-border acquisitions that have already been completed (the Chilean company Corpbanca bought Helm Bank Colombia, Chilean Entel bought Nextel Peru and the Colombian firm Nutresa bought the Chilean food company Tresmontes Lucchetti).
Mexico’s foreign investment is also expected to rise with the confirmation of the acquisition of the rest of the Netherlands firm KPN by América Móvil (currently valued at over 9.0 billion dollars). Brazil’s external investment could also post a positive balance again if the trend from July and August continues for Brazilian trans-Latins to stop getting into debt with their foreign subsidiaries.
Preliminary data for 2013 show that, following three years of continued rises and historic figures, Latin America continues to attract growing amounts of foreign direct investment. According to ECLAC, governments should take advantage of this to channel such investment into sectors that can help to change the region’s production patterns.
The situation of Latin American and Caribbean women is once more at the heart of regional debate thanks to the meeting organized by the Economic Commission for Latin America and the Caribbean (ECLAC) to review fulfilment of national gender equality commitments.
The 12th session of the Regional Conference on Women in Latin America and the Caribbean will be held from 15 to 18 October 2013 in Santo Domingo, Dominican Republic, to bring together authorities, experts, international officials and representatives from civil society and the business sector.
Organized by ECLAC and the Government of the Dominican Republic, the Conference will provide countries with an opportunity to identify the needs of the region’s women and come up with public policy options in various spheres.
The intergovernmental meeting will focus on gender equality, women’s empowerment and information and communications technologies
(ICTs). In this context, the Executive Secretary of ECLAC, Alicia Bárcena, will present the position paper Women in the digital economy. Overcoming the threshold of inequality, which was prepared by the Gender Affairs Division in collaboration with the Commission’s Division of Production, Productivity and Management.
The event will involve roundtable discussions, panels and side events on issues such as productive development and equality, ICT access policies, women in business and science, gender and ICT statistics, policies for rural women and the empowerment of indigenous women.
One example is the roundtable discussion on Beijing+20: prospects and challenges, which will be moderated by Sonia Montaño, Director of the Gender Affairs Division, and will involve government officials, academics and representatives from non-governmental organizations.
Every three years, ECLAC invites Member States to identify women’s needs, present recommendations, evaluate activities carried out to comply with relevant regional and international agreements or plans and provide a forum for debate.
Previous Regional Conferences were held in Brazil (2010), Ecuador (2007), Mexico (2004), Peru (2000), Chile (1997), Argentina (1994), Netherlands Antilles (1991), Guatemala (1988), Mexico (1983), Bolivarian Republic of Venezuela (1979) and Cuba (1977).
Delegates are expected to sign the Santo Domingo Consensus in the Dominican Republic, which will contain the regional and subregional needs of women as identified during the Conference, as well as commitments undertaken by countries to continue making progress towards gender
The foreign trade performance of Latin America and the Caribbean reflects the weak global economy. Regional export values are expected to grow by just 1.5% in 2013 (3% in volumes and -1.5% in prices) – which is similar to the 1.4% growth observed in 2012. Meanwhile, imports are expected to expand by 4.5%, which will bring the region’s trade surplus down to 8.0 billion dollars in 2013 (compared to 41.0 billion dollars in 2012), according to estimates presented today in Santiago in a new report from the Economic Commission for Latin America and the Caribbean (ECLAC).
In its annual report, Latin American and the Caribbean in the World Economy 2013, the Commission states that the weak global economy continues to affect the buoyancy of world trade. The latter is expected to grow by around 2.5% in volume in 2013. This would mean trade growing more slowly than global GDP for the second year in a row – which has not been seen since the 1980s.
Mexico and Central America, which export mainly to the United States, are predicted to benefit from the emerging recovery in that country. However, limited European growth will slow exports from some South American countries that focus on that particular market.
Latin American and Caribbean countries whose exports are mainly to China and the rest of Asia will probably chalk up higher volume growth, while at the same time experiencing a gradual change in demand from commodities to more processed products.
In terms of countries, Paraguay and Uruguay show the largest increases in export values in 2013 (33% and 14%, respectively), and this was largely due to considerable export growth in soybean and meat exports. In contrast, some of the region’s countries are seeing their export values fall, such as Peru (-9,7%) and Guatemala (-5%). Mexico, the region’s top exporter, will see export growth of almost 3%. Brazil, the region’s second main exporter, will see a standstill in exports.
The document also shows gains in the region’s terms of trade between 2004 and 2011, which accounted for almost half of growth in gross national income in Chile (47%), as well as major contributions in Ecuador (35%), Mexico (27%) and Brazil (22%). These figures show an excessive dependence on the cycle of international commodity prices (a crucial feature of the region’s development).
Mega-agreements can change the international rules
In the report, ECLAC states that one of the main features of the current international economic situation are mega-regional negotiations linking the main world production networks: Europe, North America and Asia.
Several mega-regional negotiations under way are changing the face of world trade. Some of the main examples include the Trans-Pacific Partnership Agreement (TPP), the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States, the Regional Comprehensive Economic Partnership (RCEP) (involving the 10 ASEAN members, and Australia, China, India, Japan, New Zealand and the Republic of Korea) and the free trade agreements between China, Japan and the Republic of Korea, and between the European Union and Japan. All of these initiatives aim to create large economically integrated spaces at the regional level (in Asia), as well as at the trans-Atlantic and trans-Pacific levels.
These mega-negotiations include topics that are not regulated by the World Trade Organization and that are important for international production networks. The agenda is becoming increasingly sophisticated, with a view to harmonizing the operating rules of various production networks to facilitate the operations of multinationals in North America, Europe and Asia.
Mega-regional negotiations under way will probably have considerable impact on the geographical distribution and governance of world trade and investment flows over the next few years. The scale of these initiatives could result in a redefinition of the rules of international trade by 2020. To date, this redefinition has taken place on the periphery of the WTO, and without tackling some of the pending issues on the trade agenda that are the most interesting to developing countries.
According to the document, as well as diverted trade and investment flows, these negotiations could result in the region’s countries facing restricted access to knowledge and innovation opportunities provided by new technologies, if the positions of the lobbies observed so far in the main economies prevail.
Mega-regionalism poses the challenge of improving the international economic standing of the region’s countries, which would help to produce subregional value chains and progress towards plurinational industrial policy practices. The document therefore examines the potential of some subregional production networks, as well as suggesting policies that place learning about clusters and new-wave industrial policies at the heart of regional integration.
(28 May 2013) According to a new ECLAC document launched today, Latin American countries must review and strengthen the institutions and instruments in order to maximize the contribution of natural resources to regional development, particularly in the current cycle of high prices.
The report Natural resources within the Union of South American Nations: Status and trends for a regional development agendawas presented by Antonio Prado, Deputy Executive Secretary of this United Nations regional commission, at the Conference of the Union of South American Nations on Natural Resources and Integral Development in the Region, which is being held until 30 May in Caracas, Venezuela.
In the document, ECLAC analyses the issue of natural resource governance in the region, which refers to the set of sovereign policies over ownership and allotment of natural resources and the distribution of productivity gains arising from their exploitation.
Latin America and the Caribbean has 65% of the world’s reserves in lithium, 42% of silver, 38% of copper, 33% of tin, 21% of iron, 18% of bauxite and 14% of nickel. It also has large oil reserves: a third of world bioethanol production, almost 25% of biofuels and 13% of oil.
The region has around 30% of the world’s total renewable water resources, which represents over 70% of the water throughout the Americas, as well as having 21% of the planet’s forests and plentiful biodiversity.
However, the region has major weaknesses, such as production and export structures based on static comparative advantages (based on natural resources alone) rather than dynamic competitive advantages; low investment in infrastructure, exploration and value added; and poor performance in innovation, science and technology.
According to Antonio Prado “Historically, the region has been unable to translate the boom periods of exporting its resources into long-term economic development processes. The challenge for the countries of the region is to generate and efficiently invest extraordinary revenue from the current price cycle with social and environmental sustainability”.
In the new report, ECLAC describes the various legal and economic instruments that Latin American and Caribbean States have at their disposal to appropriate and distribute the revenues from the exploitation of natural resources relating to mining, water and hydrocarbons.
In terms of mining, ECLAC states that four UNASUR countries (Argentina, Brazil, Chile and Peru) receive 62% of regional investment in exploration (and according to 2010 data the percentage climbs to 84% if Mexico is added).
In 2011, Brazil, Chile and Peru were among the top 10 recipients of mining investment, accounting for 36% of the world total (compared to 26% in 2000).
Between 2000 and 2010, the region’s oil exports did not follow the upward trend of prices, unlike the pattern in the rest of the world. Despite this, estimated income of the hydrocarbons sector during the boom of 2004-2009 (7.1% of GDP) was double the average recorded between 1990 and 2003 (3.6% of GDP).
ECLAC also states that UNASUR has a primary energy supply structure that is cleaner than the world average (31% compared with 12%), as it combines energy sources such as hydroelectricity, biomass and other renewables. In 2011, for instance, hydroelectricity represented 11% of these countries’ total primary energy supply (which is much higher than the world figure of 2%).
The Commission describes the region as facing the challenge of achieving homogenization and integration in energy consumption, with a view to narrowing the subregional divides that still persist, namely: the heterogeneity of natural resources, supply structures and energy consumption, and the need to achieve institutional consolidation and establish the basic conditions for renewable energy promotion and penetration policies.
According to ECLAC, the subregion’s public policies should take a long-term view on the need to ensure efficient investment of the windfall earnings from natural resources now that prices are buoyant, as well as on the need to improve public management of socioenvironmental conflicts that arise in the development of natural resource sectors.