Global disruptions stemming from the COVID-19 pandemic and the Ukraine/Russia crisis devastated economies in the Latin America and the Caribbean (LAC) region, but the opportunity now exists for countries in the region to earn up to US$80 billion annually by expanding trade.
This is the view of President of the Inter-American Development Bank (IDB) Mauricio Claver-Carone, who spoke at a Trade and Investment forum at the sidelines of the ongoing Summit of the Americas in Los Angeles, California.
Claver-Carone, in his 15-minute opening address, implored regional leaders and private sector players to increase collaboration on identifying opportunities for trade growth and “reconfiguring” value chains.
His underpinning message was that if countries of the region can increase production and then find ready international markets for those products, the region stands to benefit significantly.
“We estimate that the region would experience an annual increase of nearly $80 billion in exports by seizing short-term nearshoring opportunities,” the IDB President highlighted.
Nearshoring happens when an organisation decides to transfer work to companies that are less expensive and geographically closer. The IDB President hopes that larger international companies can find new business opportunities in the region.
“And indeed, progress in this area has numerous benefits,” Claver- Carone continued.
Those benefits include the creation of more jobs for people in the LAC region; the requirement of more specialised skills which should, in turn, generate higher salaries, and ultimately, increased economic growth.
What has informed Claver-Carone’s conviction?
The IDB President explained that the shutdown of manufacturing and supply chain disruptions from China, exacerbated by the disruption caused by Russia’s ongoing war in China, has created an opportunity for the LAC region to supply much-demanded goods and services across the world.
“… today, Latin America and the Caribbean is lagging (behind) other parts of the world in its global value chain participation.
“We have before us a once in a generation opening for global trade insertion…and the moment to seize it is now,” he emphasised.
Estimates from the Bank indicate that exports from the LAC region increased by 22.6 per cent in the first quarter of 2022.
Guyana and Paraguay were the only countries which did not see an increase in trade exports.
Claver-Carone, however, believes that a new, regional cooperation agenda, that encompasses increased public and private sector collaboration, will solve many woes.
And he hopes that as leaders of the Americas congregate in Los Angeles for the highly-anticipated summit, they can all agree on an agenda for increasing trade.
Already, economic cooperation is on the agenda for Guyana’s President Irfaan Ali.
The Head of State is expected to join other hemispheric leaders in Los Angeles from Tuesday; engagements among leaders commence on Wednesday.
