The economic forecast for Latin America and the Caribbean in 2022 is not good. Although the World Bank (WB) revised its growth projection for the region upwards by 0.2 points on Tuesday 7 June – to 2.5%, against 6.7% in 2021 –, it remains lower than that estimated for emerging markets (+3.7%).
The Covid-19 pandemic has particularly affected the subcontinent, which records 25% of deaths (1.69 million) worldwide, while it represents only 8% of the population of the planet. And the war in Ukraine will have long-term negative impacts, predicts the WB, because the rise in the prices of raw materials, of which the region is an exporter, will be curbed by the increase in production costs, in particular energy and fertilizers.
Passing through Paris, Mauricio Claver-Carone, President of the Inter-American Development Bank (IDB), the main source of financing for the sub-continent, said ” not to beleive ” to screenings “defeatists”. “Yes, there is an additional crisis because of the war, but also of the opportunities”, he says, calling on French companies to invest more in the region.
“Strangulation of supply chains”
The election as head of the IDB in September 2020 of Mr. Claver-Carone, proposed by former United States President Donald Trump, with the avowed objective of countering the influence of China, had been tainted with controversy, while tradition wanted the leader of the institution, founded in 1959, to be a Latin American. Since then, his promise to obtain an 80 billion dollar (75.7 billion euro) recapitalization from the United States, the IDB’s main backer, has still not been voted on in Congress, with some analysts attributing blocking opposition from Democrats to a Trump-appointed official.
For two years, Mr. Claver-Carone, who provides “leave politics at the door of the IDB”, opted for the intensification of the collaboration of the banking institution with the private sector through BID Invest, the private arm of the institution. Proud to have succeeded “break all records in private financing for the bank in 2021, with 23.4 billion dollars delivered”, ie twice the usual average for the entity, the official highlights “nearshoring”, ie the relocation or repatriation of an economic activity to a country close to its markets.
“Because of the Covid-19 crisis, we are seeing a throttling of supply chains, due to the dependence on factories in Asia, and this has been exacerbated by the war in Ukraineassures Mr. Claver-Carone. In this sense, nearshoring is essential and we can help French companies established in China or other Asian countries to relocate their production to Latin America and the Caribbean. »
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