ASUNCION – Latin America’s economies need to adjust to the drop in demand for raw materials in foreign markets, World Bank vice president for Latin America and the Caribbean Jorge Familiar said on Tuesday.
“This new situation of demand and prices for raw materials is not a short-term thing, it’s something that is going to be with us for a long while. The first thing that has to be done is to adjust the (Latin American) economies to this new reality,” Familiar said.
The World Bank official spoke with reporters after meeting with Paraguayan President Horacio Cartes at the Mburuvicha Roga presidential residence in Asuncion, one of the stops on a regional tour that will also take him to Argentina and Ecuador.
The recession affecting Latin America is due to a large extent to changes in foreign markets, which provided favorable destinations for the region’s raw materials exports in the past decade, Familiar said.
“This helped the region grow at very high rates for a long period of time, and the good news is that the growth during this golden decade led to improvements from the social point of view,” the World Bank official said.
Millions of Latin Americans were pulled out of poverty, got jobs, improved their health and obtained better educations during this period, Familiar said.
The economic landscape, however, has changed because emerging economies outside Latin America are growing at lower rates than before and need fewer raw materials, forcing the region’s countries to adapt to the new situation, the World Bank official said.
“(We have to) invest in infrastructure, invest in education and (invest) human capital more broadly via health-care, create the conditions so the private sector can invest and create employment opportunities, and we also have to provide more adequate social protection for the most vulnerable” in society, Familiar said.