SANTIAGO, Chile, Jul. 3, CMC – The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, says middle-income countries in the region should continue receiving official development assistance (ODA) to be able to make progress on closing the gaps that persist in diverse areas.
In addressing the Latin America and Caribbean Dialogue on Development Cooperation here, Bárcena said development levels should be evaluated using a comprehensive approach and not solely on the basis of per capita income.
In a presentation on the role of cooperation in the implementation of the 2030 Agenda for Sustainable Development in Latin America and the Caribbean, Bárcena said that 28 of the region’s 33 countries are considered to be middle income according to their per capita income levels.
She, however, said “notable disparities remain with regard to other development variables, both among nations and within each of them.”
“It is not possible to equate a country’s income level with its development level, which implies evaluating other gaps,” said Bárcena, alluding to differences in terms of poverty and inequality, investment and savings, infrastructure, productivity and innovation, education, health and social security, financing and taxation, gender equality and environmental sustainability, among others.
She said there’s the possibility that the Paris-based Organization for Economic Cooperation and Development’s (OECD) Development Assistance Committee will graduate some regional countries in 2017—meaning that it will remove several them the list of ODA recipients.Among them will be Antigua and Barbuda, Chile and Uruguay.
But Bárcena lamented that “there is not a single classification or uniform criteria for evaluating development needs,” adding that the per capita income level of a country does not reflect its capacity to save, to mobilize domestic resources, or to access external capital markets and other sources of financing to promote development.
She said the size of the economies, their structural characteristics and the external scenario that they face are some of the factors that have an impact on all of those elements.
Bárcena said that is the case with the Small Island Developing States (SIDS) of the Caribbean, stating that they need additional support to confront the damage caused by extreme natural phenomena, “one of the causes of their high indebtedness.”
In this regard, ECLAC has proposed that part of the Caribbean’s debt be relieved “to create a resilience fund that enables them to finance actions for mitigating and adapting to climate change.”
Bárcena said that, as ODA flows have decreased, the region has begun depending on private flows to a greater extent.
In fact, she said foreign direct investment (FDI) and remittances constitute the bulk of external financing (52 percent and 26 percent of the total, respectively).
At the same time, Bárcena said the illicit financial flows estimated to have left the region between 2003 and 2012 grew to US$320 billion dollars a year, which was double the level of remittances and 16 times bigger than ODA.
In this case, Bárcena said it is vital that the public sector intervene to attract private investment towards the development needs laid out in the 2030 Agenda, while also tapping into innovative sources of financing and new modalities for collaboration, such as South-South Cooperation, “to protect the interests of middle-income countries and address the harmful fiscal competition between States, among other goals.”
These and other proposals are set forth in “Horizons 2030: Equality at the Centre of Sustainable Development,” presented by ECLAC last May, in which the organization offers a road map for the region’s implementation of the 2030 Agenda, adopted in 2015 by the United Nations’ 193 member-states.