Latin America is experiencing an extraordinary transformation. As a consequence of the strengthening of democracy, the establishment of a free-market friendly culture, sound macroeconomic principles, institutional reform and commercial integration, many countries have leapt forward in terms of progress these past two decades.
This – in coordination with the expansion of the middle class, sustainable social policies and noteworthy amounts of investment – is reshaping the region’s prospects, generating a realistic optimism about the future.
There is no doubt that emerging economies have become engines of growth. During the past three decades developing countries have had to face a fast demographic and economic transition. Since 1980 more than 90% of world population growth has taken place in the developing world. Today this group of countries represents 46% of the world GDP.
Commentators and analysts may talk about Asia’s outstanding performance, praising China’s efforts to lift 400 million people out of the poverty trap and India’s migration to a knowledge-based society, but little has been said about our region’s development.
Since 1980 the population in Latin America and the Caribbean has increased rapidly and today is close to 600 million inhabitants. Our average age is close to 27 years, and more importantly, 62% of our population is part of an expanding middle class with a per capita GDP in terms of purchasing power that is close to $10,000.
During the last decade a radical social change has also taken place. Forty million people have risen above the poverty line, life expectancy has increased to 75 years, child mortality has been reduced by half, literacy rates are above 94%, healthcare coverage more than 50%, and water and sanitation coverage has reached on average 80%, putting most of our countries on the right track to surpass the Millennium Development Goals by 2015.
Latin America is a region with vast opportunities, based on the abundance of natural resources that will be needed by growing international demand patterns. We possess 10% of the world’s oil reserves, 6% of its gas reserves, 26% of its fertile land and 57% of the planet’s primary forests. Approximately 20% of the world’s biodiversity is concentrated in the Amazon.
Despite Latin America’s successful development, the change process needs to become homogeneous.
Brazil, Mexico, Colombia, Chile, Peru and Uruguay, 70% of the region’s population and 75% of its GDP, have been the key drivers of regional developmental accomplishments. They have been attached to the construction of a sustainable social safety net, the expansion of export markets, a results-driven public administration, fiscal and monetary prudence and the consolidation of an innovation agenda pulled by education.
Countries such as Argentina, Panama, the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, Belize, Paraguay, as well as most of the Caribbean, are trying to follow that same approach, with sustainable long-term policy goals. Other countries still face the darkness of extreme poverty or are immersed in the wrongful road of state capitalism or extreme public interventionism, which endangers individual liberties and private-sector initiatives.
Most of Latin America has demonstrated its capacity to survive in the midst of the worst economic crisis since the Great Depression and have implemented the necessary reforms for sustainable development.
Nevertheless there are challenges to be faced in the years to come if we really want the bold endeavour of permanent social advancement to materialize.
There are four issues to be primarily addressed.
In terms of security all countries must fight narco-trafficking, terrorism and organized crime with determination, while building an efficient, independent and effective judicial system.
For long-term economic planning, it is urgent to maintain fiscal and monetary responsibility, reconstructing counter-cyclical capacity, facilitating an integration of a commodity- and knowledge-based economy and to build modern infrastructure in accordance with goals of competitiveness.
Closing the social divide must also be a priority. Improving education systems in terms of quality and coverage, ensuring universal healthcare, reducing informality in the labour market and guaranteeing democratic access to finance are all pillars of a society grounded on the ideals of equality and opportunity.
A sustainable energy and climate change agenda means we need to expand our renewable energy sources, promote an awareness of the need for energy efficiency, improve waste management, protect the Amazon and other biodiversity hot spots, expand biofuels production without harming food supply and reduce CO2 emissions according to international goals.
Latin America and the Caribbean have proved their capability to build a new destiny based on the development of sound policies and a long-term vision. Pablo Neruda, the great Chilean poet and politician, used to say that we live in a region of hope.
Today that hope is a reality and has become the road to progress.
Alvaro Uribe Vélez was president of Colombia from 2002 to 2010