Latin America and the Caribbean

Colombia © Dominic Chavez/World Bank
After a decade of strong, inclusive economic growth, Latin America and the Caribbean finds itself in the fifth year of an economic slowdown and the second consecutive year of GDP contraction. Worsening external conditions coupled with domestic challenges have reduced expectations for regional growth to –0.7 percent in 2015, with economic activity projected to drop to –1.3 percent in 2016.

These projections mask important intraregional differences. South American economies, which have been hit hardest by lower commodity prices and the slowdown in China, are expected to contract by 2.6 percent in 2016. In Mexico, Central America, and the Caribbean, lower commodity dependence and closer links to the U.S. economy are expected to fuel a modest expansion of 2.7 percent in 2016.

Sluggish growth, potentially for an extended period, is threatening the region’s hard-won social gains. The share of the population living on $2.50 a day or less, the threshold for extreme poverty in the region, fell from 24.5 percent in 2003 to 11.0 percent in 2013. In total, 76 million people were lifted out of poverty. These gains notwithstanding, in 2014, 39 percent of the population remained vulnerable to falling into poverty, and the increase in the size of the middle class has slowed.

World Bank assistance

The Bank approved $8.2 billion and 31 operations for the region this fiscal year, including $8.0 billion in IBRD loans and $183 million in IDA commitments.

Illustrating how the Bank’s role in Latin America and the Caribbean has evolved in recent decades, countries in the region now turn increasingly to the institution for more than direct lending, including such services as risk insurance, commodity swaps, and climate adaptation finance. An example is the Caribbean Catastrophe Risk Insurance Facility, which the Bank helped to establish in 2007, that now allows more than 20 Caribbean and Central American countries to pool risk, access disaster insurance at low cost, and better manage catastrophic risk.

The Bank also remains a vital source of ideas, best practices, and convening power. Two studies, Out of School and Out of Work: Risk and Opportunities for Latin America’s Ninis and Indigenous Latin America in the Twenty-First Century: The First Decade, offer insight and guidance on key development issues, while conferences such as Governance for Growth with Equity, held in Uruguay in April, demonstrate the Bank’s capacity to convene leaders around rising regional challenges.

Spurring economic recovery

To set the stage for economic recovery, the region needs to increase productivity, strengthen the business environment, and expose companies to greater domestic and external competition. To those ends, the Bank is supporting Colombia’s efforts to raise the level and allocation of productive skills among professionals and to streamline regulations to catalyze innovation. In Peru, it is helping to promote productivity by raising the quality of public education, and helping to improve the business environment by reducing entrance, operation, and market exit costs for companies.

Building sustainable infrastructure

Building better and more sustainable infrastructure to support higher growth in the region will require mobilizing investment from both the public and the private sectors. The Bank has played a catalytic role in this effort, providing lending and technical assistance to develop high-quality infrastructure with a lower carbon footprint. In Lima, Peru, and Quito, Ecuador, the Bank is working to develop metro systems that will reduce carbon emissions and unlock congestion. In the Caribbean, it is modernizing grid systems and helping businesses to retrofit their buildings so they can save energy and draw on renewable sources of power.

Investing in the poor and vulnerable

Protecting the poor and vulnerable from the economic slowdown, and building their human capital so they can share in the benefits of growth are top priorities in the region. In Costa Rica, the Bank is supporting efforts to improve the quality and availability of health care for the poor. In Haiti, it is working with its partners in the Education for All program to increase access to schools and quality education for 73,000 disadvantaged children, and to provide daily meals for 132,000 in this school year. In Mexico, it is helping to expand access to a broader range of social services for beneficiaries of the Prospera conditional cash transfer program.

Building resilience and responding to shocks

Helping countries to build resilience against unexpected shocks—such as natural disasters and public health emergencies—represents a cross-cutting theme that spans the Bank’s operational work. In Bolivia, the Bank is assisting in the development of a comprehensive system to better manage disaster-related risks. In February 2016, it offered $150 million to support the region’s response to the Zika virus. Following a major earthquake that struck Ecuador in April, killing hundreds of people and wounding thousands more, the Bank immediately made funds available from a recently approved $150 million Risk Mitigation and Emergency Recovery Project to pay for medicine, mobile hospitals, and other basic services.

Further Information: World Bank's Latin America and the Caribbean Region homepage »

Leveraging the Bank’s convening power to increase transparency and accountability

Transparency, accountability, and zero tolerance for corruption are front and center in the minds of citizens throughout Latin American and the Caribbean. As the region’s middle class grew over the past decade, its population began to expect and demand higher-quality public services and more-accountable governments. At a time of slower economic growth and fewer resources, public expenditure needs to become more efficient, while transparency and trust will be key to assure taxpayers their money is being well spent.

These issues were the focus of a high-level regional conference that the Bank hosted in Montevideo, Uruguay, in April. Cuentas Claras: Governance for Growth with Equity in Latin America and the Caribbean attracted some 300 participants, who exchanged ideas on the need for transparency in public spending, the rule of law, justice as a public good, the role of procurement in improving public service delivery, and other issues. Underscoring the rising importance of governance on the regional agenda, the event included more than a dozen cabinet-level officials, such as the finance ministers of Argentina, Paraguay, and Uruguay. The conference also drew academics and journalists from the region, as well as nearly 12,000 additional people who participated in the conference live online.

The Cuentas Claras event demonstrates the critical role that the Bank can play in convening top policy makers to help facilitate solutions to the most pressing challenges to the region’s shared development goals.

Regional Commitments and Disbursements for Fiscal 2014-16

  Commitments (millions) Disbursements (millions)
  Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2014 Fiscal 2015 Fiscal 2016
IBRD $ 4,609 $ 5,709 $ 8,035 $ 5,662
$ 5,726 $ 5,236
IDA $ 460 $ 315 $ 183 $ 306 $ 383 $ 303
Note: Portfolio of projects under implementation as of June 30, 2016: $28.8 billion.

 


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Indicator 2011 2012 2013 2014 2015
Total population (millions) 537 543 550 556 562
Population growth (annual %) 1.2 1.2 1.2 1.1 1.1
GNI per capita (Atlas method, current US$) 8,385 9,150 9,342 9,286 8,331
GDP per capita growth (annual %) 3.1 2.0 1.7 -0.2 -2.2
Population living below $1.90 a day (millions) 35 34 - - -
Life expectancy at birth, females (years) 77 77 78 78 -
Life expectancy at birth, males (years) 71 71 71 71 -
Youth literacy rate, females (% ages 15-24) 98 98 98 98 -
Youth literacy rate, males (% ages 15-24) 97 97 97 97 -
Carbon dioxide emissions (megatons) 1,399 - - - -
Monitoring the Sustainable Development Goals (SDGs)
SDG 1.1 Extreme poverty (% population below $1.90 a day, 2011 PPP) 5.9 5.6 - - -
SDG 2.2 Prevalence of stunting, height for age (% children under 5) - - - 11 -
SDG 3.1 Maternal mortality ratio (modeled estimate, per 100,000 live births) 81 79 75 72 70
SDG 3.2 Under-5 mortality rate (per 1,000 live births) 21 20 20 19 19
SDG 4.1 Primary completion rate (% relevant age group) 99 100 101 - -
SDG 5 Ratio of female to male labor force participation rate (modeled ILO estimates, %) 68 68 68 68 -
SDG 5.5 Proportion of seats held by women in national parliaments (% total) 23 25 26 28 29
SDG 6.1 Access to safe drinking water (% population with access) 93 93 94 94 94
SDG 6.2 Access to basic sanitation facilities (% population with access) 80 80 81 81 81
SDG 7.1 Access to electricity (% population) - 96 - - -
SDG 7.2 Renewable energy consumption (% total final energy consumption) 31 30 - - -
SDG 17.8 Individuals using the Internet (% population) 38 42 45 47 53

Note:
 ILO = International Labour Organization; PPP = purchasing power parity; - = not available. Visit data.worldbank.org for data updates.