WASHINGTON – Latin America’s current growth levels are not sufficient to reduce socio-economic disparities, even as the region faces new challenges such as climate change and migrant flows from crisis-hit Venezuela and Nicaragua, the president of the Inter-American Development Bank, Luis Alberto Moreno, said on Friday.
“When the bank began, Latin America was a region with enormous poverty. It was essentially a rural region with very low life expectancy, with very low penetration of public services, education and healthcare,” Moreno said in an interview with EFE coinciding with the celebration of the IDB’s 60th anniversary.
“Now it’s for all intents and purposes a middle-income region, but many of the problems that gave rise to the bank still persist: we have a third of the population living in poverty (and) a big deficit in public services like water and electricity,” he added.
Moreno also pointed out that one of the region’s biggest problems is the mediocre quality of its educational system.
Colombia’s former economic development minister said Latin America’s low growth rate, which is projected to come in at below 1 percent this year, is insufficient for ending persistent socio-economic gaps.
Referring to the region’s six biggest economies, he noted that Argentina is contracting while Brazil and Mexico will grow at a clip of less than 1 percent and the gross domestic product (GDP) of the other three – Colombia, Chile and Peru – will increase by more than 3 percent.
With respect to Argentina, where uncertainty surrounding next month’s first round of presidential elections has darkened the country’s economic outlook, Moreno said the IDB will continue to provide the country with support.
“We have $10 billion in loans approved for Argentina, of which nearly $6 billion have not yet been disbursed, and those (funds) will continue to be disbursed, whether with (the current administration of market-friendly President Mauricio Macri) or the next one coming in,” he said, referring to a possible future administration headed by the center-left Alberto Fernandez.
A separate issue is the severe economic crisis in Venezuela, which he termed the region’s biggest challenge.
Moreno said there is a risk that the massive exodus of 5 million Venezuelans by the end of this year could trigger instability in South America.