Given the risks on the horizon as a result of the new geopolitical context, Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean, Cepal, suggests applying fiscal measures aimed at curbing tax evasion and diversifying investments to sectors other than extractive industries.
Fiscal measures should also be put in place to boost industrialization, promote inter-regional production, implement a regional infrastructure program and move towards a single digital market.
Because of the current environment of uncertainty, regional integration in Latin America is now more necessary than ever before, Bárcena says.
The region’s economy likely dropped 1.1 percent in 2016, and will grow 1.3 percent this year, according to Cepal estimates.
This year, Latin America faces a slowdown in trade, scarce investment in human resources, research and development, and a limited diversification of production.
Other challenges include an increased concentration of companies in the U.S. and Asia, pushed mainly by the digital revolution.
Among the recommendations given by Bárcena to help spark growth were the use of technology as a way to diversify production, and promote incentives to fight against climate change.
Contrasting fiscal deficits
Latin America’s average fiscal deficit remained relatively stable in 2016 compared with the year before, according to Cepal’s Social and Economic Panorama of Latin American and Caribbean States 2016 …