SANTIAGO, Chile, CMC – The Economic Commission for Latin America and the Caribbean (ECLAC) calls on countries in the region to scale up and improve productive development policies (PDPs) that would foster the productive transformation and growth in productivity of their economies.
The United Nations regional organization has released the first edition of its new flagship publication, “Panorama of Productive Development Policies in Latin America and the Caribbean, 2024,” noting that the countries need to adopt new initiatives to overcome the region’s low capacity for growth and avert a third lost decade.
The publication was unveiled by ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs, and Marco Llinás, the Director of its Production, Productivity and Management Division.
It presents ECLAC’s renewed vision regarding productive development policies, analyzes the region’s countries’ efforts on these policies, and makes concrete proposals for scaling up and improving them in Latin America and the Caribbean.
The publication offers more than 80 practical recommendations, encapsulated in seven pillars of action, that seek to orient the region’s countries and territories on the” whats” and “hows” of advancing their productive transformation.
Among its main findings, the document indicates that the region’s efforts in productive development policies are marginal in light of its productivity challenge and what other countries are doing in this area.
The countries analyzed allocate public resources equivalent to between 0.2 and 1.2 percent of gross domestic product (GDP) in PDPs.
ECLAC said these figures are shallow compared with the 3.5 percent that some countries in the Organisation for Economic Co-operation and Development (OECD) are estimated to invest in.
Furthermore, tax instruments tend to predominate, accounting for as much as 61.5 percent of the total. In addition, resources are dispersed among multiple instruments of limited scope, which atomizes the efforts made and thereby reduces their capacity for impact.
The modern vision of PDPs that ECLAC is promoting emphasizes governance mechanisms and collaboration between key institutions and stakeholders.
In this regard, researchers found significant fragmentation among the institutions dedicated to PDPs: most of the 33 countries in Latin America and the Caribbean have between five and six entities dedicated to these policies.
However, coordination needs to be improved among these institutions. In addition, the data shows that subnational governments contribute with their resources to financing PDPs in their territories. However, there is significant heterogeneity in the efforts made by distinct territories within countries.
According to ECLAC’s assessment, there are significant opportunities for improving PDP efforts in the region. Thus, to provide guidance to national and subnational governments on scaling up and improving their PDPs, the publication presents a broad set of proposals grouped into seven pillars of action.
These are increasing efforts in line with the new vision for more significant impact, strengthening multi-stakeholder and multilevel governance, strengthening institutions’ technical, operational, political, and perspective (TOPP) capabilities, and creating and strengthening cluster initiatives in line with production priorities.
It also advocates boosting the commitment of all stakeholders, particularly from the private sector, bolstering territorialization, and adopting a strategic line of internationalization.
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