The covid pandemic and the war in Ukraine, which has triggered inflation and food insecurity, open up multiple opportunities in Latin America, such as clean energy and new technologies, according to a group of experts gathered Monday by the Atlantic Council think tank in New York.
In the debate entitled “From Ukraine to the Americas: Fortifying Recovery in the Face of Global Shocks” and organized on the eve of the start of the UN General Assembly, the annual diplomatic ball in New York, several experts gave clues for the future development of the region.
The range of opportunities is wide: manufacturing lithium batteries for electric cars – Argentina, Bolivia and Chile, the three main producers, are in the region-, manufacturing semiconductors, creating chains of health products, developing technologies to prevent food waste, or promoting technologies to boost agricultural production.
The United States is working with Brazil, Argentina and Mexico to build pharmaceutical supply chains, and the production of medical supplies opens up opportunities to also work with Costa Rica, Panama and Canada, said the U.S. State Department’s Assistant Secretary for Economic Growth, Energy and the Environment, José W. Fernández.
Mexico is a candidate for manufacturing lithium batteries and Costa Rica for semiconductors, while Colombia offers significant manufacturing potential, he recalled.
For Martin Spicer of the International Finance Corporation, it is also essential to put the focus on the digital economy, a sector in which the region lags behind other parts of the world, and is needed to bring down the price of services.
“It is up to us to try to make the most of the opportunities,” said Fernandez after recalling that the region has other challenges to overcome inequalities and economic backwardness: improving the education system and eradicating corruption that takes a toll in the region of “3% to 4%” of the Gross Domestic Product (GDP).
Access to Food
But the most pressing problem at the moment is access to food, which, according to Fernandez, affects “270 million people” in the region.
This, as a consequence of the terrible blow of, firstly, the covid pandemic and then the high food prices unleashed by the Russian invasion of Ukraine seven months ago.
In western Guatemala, the price of corn – a staple of the population’s diet – has risen by 50% and that of fertilizers by 200%, recalled Marcela Escobari, assistant administrator of the U.S. Agency for International Development’s Latin America and Caribbean office.
And in countries such as Haiti, the withdrawal of fuel subsidies has unleashed the fury of the population. Inflation is “a real challenge that complicates the situation left by the pandemic,” said Lisa Schineller of A&P Global Ratings.
The three major economies, Brazil, Mexico and Argentina, have “structurally grown less than they should,” and in the case of Mexico it is still below pre-pandemic levels, Schineller said.
And given the situation in the United States, the “very complex” global environment and the dynamics of inflation, the region will enter “into recession next year”, with probably exceptions, such as Guatemala or Costa Rica, which grew in the last year “more than expected”.
The situation in the region will also be affected by financial problems, high interest rates and capital outflows, said the head of European diplomacy, Josep Borrell.
Both Borrell and Ukrainian Foreign Minister Dmytro Kuleba wanted to make it clear that the situation is not due to the sanctions imposed on Russia by the international community, despite the fact that the “Russian narrative wants to convince the world that the war and the blockade are Ukraine’s fault”.