Transcript Slide 1

THE WORLD BANK
Regional Challenges
Latin America and
the Caribbean
2007
Latin America and the Caribbean’s Twin
Development Challenges
Income per capita
With respect to OECD
1950-2005
Low and volatile growth
and persistently high inequality
Gini Coefficient, 2000-5
(average)
60.0
50.0
40.0
contribute to high levels of poverty
in an essentially a middle income
country (MIC) region.
30.0
20.0
10.0
0.0
ECA
SA
EAP
MENA
LAC
Source: WDI, simple average of country figures 2000-5
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Latin America and the Caribbean is one of the
most unequal regions of the world
Gini Coefficients by country, and Regional averages
Source: WDR 2006
LAC
Latin America & Caribbean
EAP
East Asia & Pacific
SSA
Sub-Saharan Africa
MENA Middle East & N. Africa
HIC
High Income Countries
ECA
Europe & Central Asia
0.00
0.04
0.08
0.12
0.16
0.20
0.24
0.28
0.32
0.36
0.40
0.44
0.48
0.52
0.56
0.60
0.64
Brazil
Bolivia
Guatemala
Paraguay
Panama
Colombia
Ecuador
Honduras
Chile
Argentina
El Salvador
Mexico
Peru
Dominican Republic
Costa Rica
Guyana
St. Lucia
Uruguay
Venezuela
Jamaica
Nicaragua
Trinidad and Tobago
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Recent Progress in Growth Recovery and
Job Creation
Unemployment Rate
Growth per capita in LAC
11.0
4.0
10.5
3.0
10.0
Percent
5.0
Percent
2.0
1.0
0.0
-2.0
9.0
8.5
2001
-1.0
9.5
2002
2003
2004
2005
2006
8.0
2003
2006
-3.0
 Due to favorable external conditions and good
macroeconomic policies.
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Taking advantage of good times to reduce
vulnerabilities
Reducing Fiscal Vulnerabilities
External Vulnerabilities
3.5
60
2
50
2.0
1.8
1
2.0
0
1.5
-1
1.0
-2
0.5
1.6
1.4
40
1.2
30
1.0
0.8
20
Percent of GDP
2.5
Percent of GDP
Current Account (rs)
Current Account (% of GDP)
Reserves / ST Debt
3.0
Reserves / Short Term Debt
3
0.6
0.4
10
0.2
0.0
-3
2000
2001
2002
2003
2004
2005
2006e
0
0.0
2000
2001
2002
Public Debt
2003
2004
2005
2006
Primary Surplus (rs)
 Accumulated international reserves and primary surpluses
 Reductions in public debt/GDP ratio
 Reduced vulnerability and increased capacity to cope with
future exogenous shocks.
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But, modest progress in Investment Climate
and Infrastructure
Average Time to Start a Business
2.5
Public Investment in Infrastructure in LAC
70
60
50
2.0
2005
2006
Days
1.5
40
30
1.0
20
0.5
10
0
OECD
SA
ECA
MENA
EAP
LAC
SSA
0.0
1996
1997
1998
1999
2000
2001
2002
2003
 Total infrastructure investment in LAC remains very low
around 3% of GDP compared to 7% of GDP in EAP (East
Asia and the Pacific region).
 Private investment has not compensated for the fall in
public investment.
2004
2005
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And in Poverty Reduction and Equity
Inequality Trend: Gini Coefficient
55
25
54
20
53
15
52
10
51
5
50
0
Early 2000s
2004
Share of People in LAC with less than
$1 and $2 a day (%)
Early 2000s
2004
$ 1 a day (PPP)
$ 2 a day (PPP)
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With challenges in some MDG targets
MDGs: Proportion of LAC countries with a specific track towards
MDGs
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Reduce extreme Reduce under 5 Achieve near
poverty
malnutrition rate
100% net
headcount rate
by 1/2
primary
by 1/2
enrolment rate
On track: MDG target is likely to be achieved
Diverging: MDG target is unlikely to be achieved
Reduce under 5 Reduce infant Reduce maternal Reduce share of
mortality rate by mortality rate by mortality by 3/4* population w/o
2/3
2/3
access to
improved water
source by 1/2**
Off track: Progress falls short of thegoal
No data available
Based on data from ECLAC (2005). Maternal mortality rates were obtained from United Nations (2005), Statistical
databases: http://millenniumindicators.un.org0
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To address these challenges, the WB strategy in LAC is
centered around the four themes – “4Gs”
GROWTH &
JOBS
 Improving
investment climate
 Increasing
investment in
infrastructure
 Deepening
financial systems
 Increasing
innovation
GINI & Poverty
GOVERNANCE
GLOBAL
(Social Inequality)
 Reduce poverty
and inequality
 Improving equality
of opportunities
 Improve quality
and delivery in
education and
health
 Provide
comprehensive
and affordable
social protection
 Support direct antipoverty programs
(CCT’s)
 Building inclusive
and effective
institutions
 Improving
efficiency and
targeting of public
spending
 Increasing
accountability for
service delivery
 Climate change
 Migration and
remittances
 Trade negotiations
 Crime and
violence
 Energy
 HIV/AIDs
 Reducing
corruption
 Avian Flu
 Monitoring and
evaluating results
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Looking to the future
 Continued need to achieve sustainable
growth with greater equity
 Large unmet demand for infrastructure.
LAC is still lagging behind other MIC
countries
 Global issues remain relevant and have
a growing importance and impact on the
region (e.g. climate change, trade,
remittances, energy)
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Conclusion
 The LAC challenge is to
overcome the twin
disappointments of low
growth and persistently high
inequality
 The WB response is to
energize our partnership
through knowledge
leadership, innovative lending
and customized
implementation support
 Our goal is to meet the hopes
and dreams of Latin American
and Caribbean peoples for a
more equitable, inclusive and
secure society
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